Bare ownership is a legal concept in which a property owner transfers the right to use and enjoy the property to another person while retaining only the ownership title. This transfer can be for life or for a specified period.
The sale of bare ownership
Full ownership of a property can be divided into bare ownership and usufruct rights:
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Bare ownership refers to owning the property but without the right to use or benefit from it. The bare owner does not receive any income or profits generated by the property.
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Usufruct grants the right to possess, use, and enjoy the property, as well as to receive any income or benefits it generates.
There are several cases where an individual may purchase the bare ownership of a property but not the usufruct rights. In recent years, selling the bare ownership of a home has become an increasingly popular option for elderly property owners who wish to obtain liquidity by selling their property while retaining the right to live in it until their death.
In such cases, the buyer benefits from a lower purchase price since they will not be able to take possession of the property for a certain number of years. For the seller, the key advantage is that they can continue living in the property, receive the sale proceeds immediately, and ensure that everything is legally recorded before a notary.
When does the bare owner gain full use and enjoyment of the property?
Full ownership of a property is consolidated when both ownership and usufruct rights are held by the same person. This occurs in the following situations:
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Sale of the usufruct rights: If the usufructuary (the person holding the right to use and enjoy the property) decides to sell their usufruct rights to the bare owner.
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Extinction of usufruct, which may occur due to:
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Death of the usufructuary: If the usufruct was granted for life, the right to use and enjoy the property passes to the bare owner upon the usufructuary’s death. If multiple individuals share the usufruct, the bare owner does not gain full ownership until all usufructuaries have passed away.
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Expiration of the agreed term: If the usufruct was established for a fixed period, the right to use and enjoy the property transfers to the bare owner once the period ends. If the usufructuary passes away before this term expires, the right still transfers to the bare owner unless otherwise agreed.
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Fulfilment of a resolutory condition: In some cases, the usufruct is granted for an indefinite period but ends when a specific condition is met. For example, the agreement may state that the usufruct ends when the bare owner gets married, at which point they gain full ownership of the property
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