WHEN USUFRUCT TURNS INTO CONFLICT: WHO MAY USE, LEASE, MANAGE, OR SELL THE PROPERTY?

The separation between ownership and use requires clear rules

Usufruct is frequently used in gifts, succession planning, and asset structuring.

Through this arrangement, a person transfers ownership of a property while retaining the right to use it, manage it, and receive the income or other benefits generated by it.

It is common, for example, for parents to transfer a property to their children while retaining a lifetime usufruct.

In this situation, the children become the so-called bare owners, while the parents remain the usufructuaries.

This structure may provide asset protection and facilitate succession planning. However, when the rights of each person are not properly understood, an instrument intended to prevent problems may become a source of family conflict.

Questions commonly arise when the property needs to be leased, sold, renovated, or used by one of the parties involved.

After all, who actually has the authority to make decisions concerning the property?

The usufructuary and the bare owner have different rights

Usufruct temporarily divides certain powers associated with ownership.

The bare owner remains the legal owner of the property but cannot fully exercise the rights of use and enjoyment while the usufruct remains in effect.

The usufructuary, in turn, may use the property and receive the income or benefits it generates, while being required to preserve its substance and respect its intended purpose.

This means that neither party, acting alone, holds all the rights and powers over the property.

The bare owner cannot disregard the usufructuary’s right of use.

Likewise, the usufructuary cannot act as though they were the absolute owner of the property.

The coexistence of these rights requires balance.

Who may live in the property?

As a general rule, the usufructuary has the right to use the property.

If the usufruct was established over a residential property, the usufructuary may occupy it directly, subject to the conditions set out in the instrument that created the usufruct.

The bare owner cannot simply demand that the usufructuary vacate the property while the right remains validly established.

Nor may the bare owner enter the property, change its use, or transfer possession to third parties in a manner incompatible with the usufruct.

However, the usufructuary’s rights do not authorize abandonment, deterioration, or any use capable of compromising the integrity of the property.

Usufruct protects the right to use the property, but it also imposes duties of preservation.

May the usufructuary lease the property?

Because the usufructuary holds the right to use and manage the property and receive the income it generates, they may, in principle, lease it and receive the corresponding rental payments.

Rent constitutes civil income generated by the property and, while the usufruct remains in effect, normally belongs to the usufructuary.

This situation may come as a surprise to the bare owner.

Although the bare owner is formally registered as the owner of the property, they will not necessarily be entitled to the rental income while the usufruct remains in effect.

However, any lease agreement must respect the limits of the established right.

The usufructuary may not create obligations that improperly exceed the duration or scope of their authority, nor may they encumber or compromise the property beyond what is permitted.

Any restrictions contained in the deed, agreement, or instrument establishing the usufruct must also be examined.

Who receives the rental income?

While the usufruct remains in effect, the income generated by the property generally belongs to the usufructuary.

This is the case even when the bare owner is identified as the legal owner in the property registry.

This distinction is important because ownership and entitlement to income do not necessarily remain in the hands of the same person.

If there is more than one usufructuary, it will be necessary to determine how the right was established and the respective share held by each person.

If the property is leased when the usufruct comes to an end, the continuation of the lease and the allocation of subsequent rental payments will depend on the structure of the agreement and the specific circumstances.

Conflicts may also arise when a family member informally collects the rent, manages the property without providing an accounting, or makes deductions and payments without clear authorization.

In such situations, proper documentation of the property’s administration becomes essential.

Who must pay property taxes, condominium fees, and maintenance expenses?

The existence of a usufruct also divides responsibilities.

As a general rule, ordinary preservation expenses and charges related to the possession, use, and income of the property are borne by the usufructuary.

This may include routine maintenance expenses, taxes associated with possession or enjoyment, and certain condominium charges.

The bare owner, on the other hand, may be responsible for extraordinary repairs or structural work that does not result from ordinary use.

This division, however, is not always straightforward.

One party may regard certain work as routine maintenance, while the other considers it a structural repair.

A condominium expense may directly benefit the occupant but may also permanently increase the value of the property.

Furthermore, liability toward third parties may not correspond exactly to the internal arrangement established between the usufructuary and the bare owner.

For this reason, allowing property taxes, condominium fees, or essential expenses to remain unpaid may jeopardize the property itself and significantly intensify the conflict.

May the usufructuary renovate the property?

The usufructuary may carry out acts necessary for the use and preservation of the property.

Ordinary repairs, preventive maintenance, and adaptations compatible with the intended purpose of the property generally fall within the scope of normal management.

The situation changes when the proposed work substantially alters the structure, intended use, or characteristics of the property.

Demolition, significant expansion, major changes in use, or work that may reduce the value of the property should not be carried out unilaterally.

Holding the right of use does not authorize the usufructuary to alter the property freely.

Likewise, the bare owner should not undertake work that prevents or unjustifiably restricts the exercise of the usufruct.

The absence of written authorization is one of the most frequent causes of disputes involving renovations, improvements, and possible reimbursement rights.

May the property be sold?

The bare owner may, in principle, sell the bare ownership.

However, the purchaser will acquire the property subject to the duly registered usufruct and will be required to respect the existing right.

The sale of the bare ownership does not automatically terminate the usufruct.

In practice, this may reduce buyer interest and affect the economic value of the transaction.

To sell full ownership of the property free from the usufruct, the participation of the usufructuary will normally be required, together with the formal measures necessary to terminate or cancel the usufruct.

The usufructuary, in turn, cannot independently sell full ownership of the property because they do not hold all ownership rights.

This distinction is essential in family negotiations in which one party advertises, promises to sell, or attempts to transfer the property without the consent of the others.

Can the usufruct come to an end?

Usufruct is not necessarily permanent.

It may be established for the usufructuary’s lifetime, for a specified period, or subject to the conditions contained in the instrument that created it.

Circumstances that may result in its termination include the death of the usufructuary, the expiration of the established period, waiver, the consolidation of the relevant rights in the same person, and other situations provided by law.

However, the termination of the right may require formal action before the property registry.

The mere death of the usufructuary does not mean that the property record will be updated automatically without the submission of the required documents.

Conflicts may also arise when the usufruct remains registered even though the circumstances that justified it have already ceased to exist.

When an instrument of protection becomes a source of conflict

Usufruct is legally secure when its purpose is clear and the parties involved understand its limits.

Problems arise when the structure is used without proper planning or merely as an automatic formula for transferring assets.

Transferring a property while retaining a usufruct does not, by itself, resolve every future issue.

It is necessary to determine:

• who will manage the property;

• who may occupy it;

• who will receive the income;

• how expenses will be allocated;

• which acts will require mutual consent;

• what will happen in the event of incapacity;

• how a potential sale will be conducted;

• what measures will be taken when the usufruct comes to an end.

These matters are especially important when there are several children, subsequent marriages, leased properties, business assets, or financial dependence on the income generated by the property.

Conclusion

Usufruct separates ownership of the property from the right to use it and receive the income or benefits it generates.

This division may protect the donor, organize succession, and preserve a source of income.

However, it may also lead to disputes when the usufructuary and the bare owner do not understand the limits of their respective rights or attempt to exercise powers they do not possess.

The bare owner cannot disregard the usufruct.

The usufructuary cannot treat the property as though they were its absolute owner.

The central issue is not merely determining in whose name the property is registered.

It is understanding:

Who may use and manage the property, receive its income, and decide its future at each stage of the relationship?

A preventive review of the instrument establishing the usufruct and the property’s registration status may identify risks before an asset-protection measure develops into a family or judicial conflict.

article is intended for informational purposes only. The applicable rights and responsibilities will depend on the instrument establishing the usufruct, the property’s registration status, its actual use, and the particular circumstances of each case.