In Spanish real estate law, the concepts of ownership and usufruct are fundamental and often cause confusion. Understanding the differences between these rights is crucial for the proper management of real estate, especially in situations such as inheritances, donations, or sales.
Ownership:
Ownership grants the holder full power over a property, allowing them to use, enjoy, and dispose of it as they see fit. This right includes the ability to sell, lease, mortgage, or even destroy the property, provided that laws and regulations are respected. In Spain, ownership is protected by the Constitution, ensuring its inviolability and protection against third parties. Although registration in the Property Registry is not mandatory, it is highly recommended, as it provides additional legal security to the owner and facilitates proof of ownership.
Usufruct:
Usufruct, on the other hand, is a real right that grants a person (usufructuary) the use and enjoyment of a property that belongs to another person (bare owner). The usufructuary can use the property, receive its fruits and income (it meanns that the usufructuary could rent the property and gets that income), but cannot alter its substance or sell it. This right is temporary and can be either for life or for a specific period. A common situation in Spain is inheritance, where parents grant the bare ownership of a property to their children while retaining a lifetime usufruct. This allows them to continue living in the property or receive rents, while the children become full owners after the parents’ death.
Legal Implications:
The main difference between ownership and usufruct lies in the scope of the rights granted. While ownership provides full dominion, usufruct is limited to use and enjoyment. If the usufructuary makes improvements to the property, these do not entitle them to any compensation, unless otherwise agreed. Additionally, the usufructuary is obliged to maintain the property in good condition and to bear the ordinary maintenance costs.
It is essential that the parties involved clearly understand their rights and obligations when establishing a usufruct or transferring ownership. Having legal counsel is crucial to drafting clear contracts and avoiding future legal disputes.
