Usufruct

Usufruct is a real right that grants a person (the usufructuary) the temporary use and enjoyment of someone else’s property without transferring ownership. The owner retains bare ownership, sometimes called the naked owner. The usufructuary may use the property and derive its fruits or revenues—such as rents, crops, or other product—while preserving the property’s substance and not committing waste.

The usufructuary’s rights include using the property and collecting its fruits, but these rights are limited by the need to maintain value for the owner. The usufructuary typically bears ordinary maintenance and protection costs, and must pay taxes and insurance. Major alterations or improvements usually require the owner’s consent, and the usufructuary cannot permanently alter the nature of the asset. Upon termination, the property and any accumulated fruits or revenues revert to the bare owner, subject to any claims for compensation related to improvements or repairs as provided by applicable law.

Creation and termination: Usufruct can be established by contract, by will, or by law, and may be for a fixed term, a specified period, or for the life of a person. It ends at the expiration of the term or the death of the usufructuary (for a life usufruct), and can also end if the property is destroyed or permanently damaged. Upon ending, the usufructuary must return possession and restore the property as required by law.

Variations include universal usufruct (over all a person’s property) and particular usufruct (over a specific asset). The concept is a hallmark of civil-law systems and has parallels in common law as a life estate or similar contingent rights.