Many South Africans who own property want a way to ensure that the rights of their loved ones are protected. Especially when it comes to their property. To ensure that they reap the full benefits of the property without any dispute. One of the ways to ensure this is a usufruct. In this blog we, MFM Attorneys, discuss what usufruct is and its importance.
What is a usufruct?
A usufruct is a legal right given to a person or party that communicates the right to temporary use, derive income, or benefit from someone else’s property. It is a limited right that can be found in many mixed and civil law jurisdictions.
The person who holds the usufruct is known as the usufructuary. They have the right to make use of the property and enjoy its benefits. This is provided the property is not damaged or altered in any way. At the end of the stipulated period, the usufructuary must hand the property back to the rightful owner as per the agreed terms.
How does it work with property use?
A usufruct can be granted to the usufructuary as a way to look after property until the death of the property owner and the estate can be settled if the property owner is in ill health.
There are two types of usufruct: perfect and imperfect. In a perfect usufruct, the usufructuary can use the property, and can profit from it, but cannot change it substantially. For example, if the owner of a business becomes incapacitated and gives usufruct to a relative to run the business for them, the usufructuary can run the business, but can’t sell it or rebuild the structure.
In an imperfect usufruct, the usufructuary does have some power to alter the property. Like when a landowner grants usufruct to a piece of land for agricultural use. The usufructuary may have the right to produce crops from the land and make improvements to it if it helps the endeavour. However, the usufructuary does not own these improvements. When the usufruct ends, they belong to the original owner of the estate.
It’s crucial to know and understand what usufruct entails, the effects thereof, and to make sure that one is not acting in a manner that can be detrimental to themselves or loved ones. For further understanding contact us.
