Can You Sell a Property with a Usufruct?

If you’re reading this, it’s probably because you have questions about whether you can sell a property with a usufruct on the Chilean real estate market. At Inversur Propiedades®, we’re experts in the field and are happy to help you. In this article, we’ll explain everything you need to know to understand the answer to this important question. So, let’s get started together.

What is a usufruct?

Before answering the main question, it’s important to understand what a usufruct is. This term is used in real estate to define a person’s right to use and enjoy a property that belongs to someone else, for a set period or until that person passes away. The usufructuary is required to keep the property in good condition and can’t make changes without the owner’s consent. In short, the right of usufruct lets the holder of the right (the usufructuary) use the property and get its benefits, without being its legal owner.

How you can sell a property with a usufruct

At Inversur Propiedades, we’ve received many inquiries about how to sell a property when there’s a current usufruct on it. It’s important to understand that selling a property with a usufruct is possible, but some additional considerations need to be kept in mind.

The first step to selling a property with a usufruct is reaching an agreement with the usufructuary. As owners, we need to be clear that the usufructuary’s right to enjoy the property is protected by law, and we can’t simply evict them without their consent. So, we need to reach a friendly agreement regarding the timeline and terms of the transfer.

After reaching an agreement with the usufructuary, potential buyers need to be informed about the existence of the usufruct right. This can be a drawback for some potential buyers who may be looking to acquire a property free of liens or restrictions. However, there are also buyers who may be interested in acquiring the property as an investment or as a future home once the usufruct period ends.

Another important consideration is that, when closing the sale, both the owner and the usufructuary need to participate. That is, both must sign the public deed and specify the details of the agreement previously reached between both parties.

In short, although selling a property with a usufruct may require a bit more effort and time, it’s a possible transaction as long as an agreement is reached with the usufructuary and interested buyers are properly informed. At Inversur Propiedades we’re ready to accompany and guide you through this entire process so it’s carried out successfully.

Rights and Obligations of the Usufructuary

As we already mentioned in the previous section, a usufruct is a person’s right to use and enjoy someone else’s property, without changing its form or substance. In this section, we’ll explain the rights and obligations that apply to the usufructuary.

First, the usufructuary has the right to use the property covered by the usufruct and receive its yields (rent, interest, or benefits) without being able to change its form or substance. For example, if the property covered by the usufruct is a rented house, the usufructuary will have the right to receive that house’s rent for the duration of the agreed period.

On the other hand, the usufructuary also has the obligation to properly care for the property covered by the usufruct. This means making the necessary repairs to keep it in good condition and paying the expenses needed for its upkeep (electricity, water, gas). They must also respect the property’s form and substance; they can’t demolish it or transform it without the owner’s express authorization.

Another important obligation is preserving the natural and industrial yields the property covered by the usufruct generates throughout the duration of this right. That is, if it’s a field with crops or fruit trees, it will be the usufructuary’s responsibility to harvest those yields and use them properly.

In short, the usufructuary has the right to use and enjoy the property covered by the usufruct and to receive its yields. However, they also have the obligation to properly care for the property, preserve its natural and industrial yields, and not change its form or substance.

Benefits of selling a property with a usufruct

First, it’s worth mentioning that when a property with a usufruct is sold, the owner keeps the right to use and enjoy the property for a set period of time. That is, you can keep using your property as if nothing had happened until the deadline agreed upon in the contract. Most commonly, the buyer takes on the expenses associated with maintaining and repairing the property for the duration of the usufruct.

But the best part comes later: once the usufruct ends, the property passes into the buyer’s hands without any additional payment needed. At the same time, you’ll have received a sale price for your property, which will let you have liquidity for other projects or financial needs.

Another interesting benefit of selling with a usufruct is the possibility of avoiding high taxes owed to the Chilean treasury. While each case needs to be assessed individually together with a tax specialist, this approach lets you defer significant tax amounts into the future.

Generally speaking, this is an alternative designed for owners willing to give up ownership while making money at the same time. Ultimately, it can be an excellent way to profit from a property and secure a more stable financial future.

Conclusions

In short, selling a property with a usufruct can be an excellent option for those who want to earn a profit when selling their property without needing to evict their family members or the holders of the right of use and enjoyment.

However, this type of transaction should be carried out carefully with the guidance of a legal expert on the matter, since there are certain risks and obligations involved. Deep knowledge of civil and real estate law is needed to carry out the transaction correctly.

It’s important to remember that when carrying out a sale with a usufruct, the consent and active participation of both the bare owner and the usufructuary are needed, always looking out for both parties’ interests and complying with all current regulations set by the relevant authorities.

In short, if you decide to sell a property with a usufruct, it’s essential to have an experienced professional team that guarantees legal security for both parties involved throughout the entire process.