Many often refer to the concept of usufruct as a simple phenomenon that frequently occurs in everyday life. But is it really so? Usufruct as a right presents several differences compared to other rights that the legislator dedicated a separate chapter to regulate. Below we will see how you can validly establish usufruct and understand the legal status in your relationships with the usufructuary/owner, in case you are the usufructuary.

1.What is usufruct?

The term refers to the limited real right that allows someone to use and benefit from something = to collect the civil/natural fruits of the thing. It is important to note that usufruct essentially occupies the entire thing (unless it is usufruct over a right, as we will see below), while it can be agreed that the usufructuary will be deprived of certain powers in relation to the thing, e.g., they will not be able to transfer it without the consent of the owner. Thus, if usufruct of a thing is granted to a third party, ownership is now legally divided between 2 parties:

• The owner, who is entitled to act regarding the thing without preventing the usufructuary from exercising their own powers.
• The usufructuary, who, as mentioned, can exploit the thing, but to transfer it, they need the consent of the owner.

2.What are the legal requirements?

To validly establish usufruct over something, the law requires certain conditions such as:

• If usufruct is established through lifetime disposition = contract, then, if it concerns real estate, the transfer must be done by notarial deed and registered, while if it is movable, it must be delivered to the usufructuary.
• If usufruct is established through a will, then again, if it concerns real estate, the heir must transfer the acceptance of the inheritance to the Land Registry to acquire usufruct of the property.
• If usufruct is acquired through regular use, the conditions of this must be met, with an emphasis on the legal title.
• If usufruct is similarly acquired through the terms of extraordinary use, the corresponding conditions must also be met (since usufruct has been mentioned in a previous analysis, I refer you there to understand the issue in depth).

3.How does it differ from other rights?

Usufruct as a limited real right has some peculiarities that are useful to know in order to avoid disputes. More specifically, usufruct:

• Can be established over any thing (real or movable, as well as a group of things, except for common property and things outside of commerce).
• Can be acquired even over a movable property that does not belong to the grantor of usufruct = transfer from a non-owner, however, the usufructuary must not know/ignore with gross negligence that the property does not belong to the grantor of usufruct.
• Can belong to multiple individuals, so their relations are regulated based on the provisions for co-ownership (= in doubt, the shares of usufructuaries in the thing are initially equal, and based on these, they are responsible for their mutual obligations).
• Is generally inalienable, so it cannot be transferred or inherited unless the opposite has been agreed upon between the owner and the usufructuary.
• Can be held by a legal entity = a company/association can acquire usufruct over a thing.
• The usufructuary cannot encumber the property with any additional real right = they cannot grant ‘sub-usufruct’ to someone else.

4.What if usufruct is combined with ownership?

The combination of usufruct with ownership over the same thing constitutes a classic way through which usufruct is ‘lost’ for the future. Essentially, the same person is both the owner and the usufructuary of the same thing = thus acquiring full ownership of it. Consequently, they are entitled to freely transfer the thing to someone else without being bound by restrictions, while simultaneously being entitled to exploit it and derive benefits from it freely.

Based on the above, the following scheme becomes clear: usufruct + ownership = full ownership, which is nothing other than ownership exercised freely over the thing without restrictions and without the necessary consent of the owner/usufructuary. The same does not happen when someone has only acquired usufruct of a thing, where they are only entitled to act within the limits of the consent of the owner and without, in any case, affecting the interests of the latter.

It is also important to note that in cases where the usufructuary had claims against the owner arising from their relationship, and subsequently ownership is united in the person of the usufructuary, then these claims are extinguished due to confusion = essentially, the usufructuary would owe money to themselves, legally unthinkable, therefore the claim is considered to no longer exist.

5.Does the usufructuary have rights?

Based on the relationship between the usufructuary and the owner, certain rights arise in favor of the former, which are exercised over the thing. These rights are as follows:

• To use the thing (in a customary manner, not excessively compared to its nature) and to enjoy its benefits (e.g., especially if it is real estate, to collect rent if it is leased).
• To request the owner to provide assurance regarding the condition of the thing. For this purpose, a surveyor appointed by the court may be used. This right is exercised by the usufructuary at their own expense, and the owner also has the same right.
• To possess the thing and to lease it to a sub-usufructuary = protected by the corresponding actions of possession.
• To request the drafting of an inventory, if usufruct has been established over a group of things (e.g., if usufruct has been established over the machinery of an auto repair shop). Again, the relevant right will be exercised at the expense of the usufructuary.
• If the usufructuary has incurred expenses on the thing (for which the usufructuary was not obliged), they may request reimbursement from the owner (or from whoever was the owner at the time the expenses were incurred). However, the expenses must have been necessary and not excessive/beneficial since the latter are sought only if the owner indeed became wealthier as a result.

If the usufructuary has added any construction to the thing, they have the right to remove it when the usufruct ends, and if its removal is not possible, they may request its value in money. However, if the construction has become an integral part of another, then the usufructuary cannot request its removal, as they are now considered as a unit (economic and legal).

6.What about his’ obligations;

The usufructuary, in addition to rights, also has certain obligations towards the owner, which they must fulfill in order to not lose their right of usufruct or have it prohibited. Specifically, the obligations of the usufructuary are as follows:

• To handle the thing with care according to its economic purpose = they cannot make substantial changes unrelated to the nature of the thing.
• To maintain and preserve the thing suitable for use, while being obligated to pay for repair expenses only if they are due to the usual use of the thing and not in extraordinary circumstances.
• To notify the owner of the thing if it suffers sudden damage/emerges a sudden danger/some third party claims the thing. If the owner does not take appropriate measures, the usufructuary may take them at the owner’s expense.
• If required by the nature of the thing, the usufructuary is obliged to insure the thing for the duration of the usufruct, and if it was already insured, they must pay the premiums.
• To pay the (regular) public burdens of the thing = municipal fees, taxes, except if they are extraordinary. In the case that the usufruct is established over mortgaged property, the usufructuary is obligated to pay a portion of the interest on the debt, which the mortgage secures on the property.

Naturally, when the usufruct ends, the usufructuary is obliged to return the thing to the owner. In the event that the usufructuary refuses to deliver it, the owner may use an action for recovery (pertaining to ownership) and an action for eviction (even though the usufructuary has the right to sublease the thing, if they refuse to return it to the owner, it is considered that they have abandoned the usufruct, and therefore, their possession is precarious/illegal thereafter).

7.How is usufruct extinguished?

In order for the legal relationship between the usufructuary and the owner to end = for the usufruct to be extinguished, at least one of the cases enumerated restrictively by the law is required to occur. This means that only the specified reasons are sufficient to terminate the usufruct, and no other conditions set by the parties are allowed. These cases are:

• If the usufructuary dies or if the legal entity for which the usufruct was established is dissolved. However, this applies only if not otherwise stipulated, meaning that it may have been agreed that the usufruct be inherited/transferred to another after the death of the usufructuary.
• If the usufructuary resigns from it, which resignation must be made by a notarial document submitted for registration if it concerns real estate usufruct. Conversely, if it concerns movable property usufruct (e.g., a car), the resignation may be made orally.
• If the usufructuary acquires the ownership of the thing, in which case they will then have full ownership of the thing, and therefore, the usufruct will be extinguished due to confusion (as analyzed in a previous question).
• If the usufructuary is unable to exercise the usufruct for reasons concerning themselves, which are real/legal (e.g., the property was seized by a third party or transferred to another).
• If the thing on which the usufruct was established is destroyed, as the exercise of the usufruct on it is no longer conceivable.
• If the usufructuary neglects to exercise the usufruct and the rights deriving from it on the thing for 20 years. It is crucial to know that to calculate the 20-year period regarding the disuse of the usufruct, we must know when it was last exercised by the usufructuary, as the ‘prescription’ of the 20 years begins from then.

8.Can ownership be established only in property;Can it be established elsewhere;

For transactional needs, the law did not only provide for the possibility of establishing ownership in property, but also foresaw other forms of establishing ownership.Thus, ownership can be established on anonymous titles (promissory notes, bills of lading, foreign exchange, etc.). However, if someone wants to acquire such ownership, they must first provide some security to the real owner = to provide collateral/mortgage/find a guarantor. However, in the case of dividends/bonds, the owner is not obliged to provide security. Finally, crucially, especially for companies, the holder of ownership in company shares has the right to participate in the general meetings of the company = to vote and make decisions unless otherwise specified in the articles of association.

Additionally, ownership can be established on a foreign right, but it must provide some benefit = it must have property character and be transferable. From the above, it follows that ownership cannot be established on rights that are purely personal, such as the right of a club member, or on a right that is exempt from seizure, such as an employee’s salary up to about 1,250 euros, or when it comes to real services (such as the service of a property owner allowing others to pass through it).

Finally, ownership can also be established on a claim (e.g., the seller’s claim against the buyer for the latter to pay the price from the sales contract). Significant here is the distinction between monetary and non-monetary claims, as in the former case, the owner must cooperate with the lender to collect it together from the debtor, whereas in the latter case, the owner can collect it alone. Furthermore, if the lender transfers his claim against the debtor to another person, then the claim will be burdened with the ownership, and thus the owner does not lose his rights.

9.Can the usufruct be seized;

Ownership, as a limited real right, can be seized in the hands of its holder by someone who is a creditor. However, as a special property element, ownership will be seized through a separate process = it is not auctioned like movable and immovable property through the usual methods.

Furthermore, ownership, unless otherwise specified, is inalienable. Many confuse this point of the law with whether ownership can be seized or not. However, nowhere does it follow that if ownership is inalienable, it cannot be seized. On the contrary, ownership can always be seized regardless of whether its transfer is possible or not.

10.Can I inherit my property ownership to my child?

It is a very common phenomenon in Greece for parents to make their children heirs to a property. However, for reasons of economic unity of the inheritance property, they often inherit the bare ownership of the property to one child and make the other the owner of the ownership in the property. The same scenario exists with the parent retaining the ownership in the property and granting the bare ownership to their child. But is such an action legal?

Greek courts in most cases accept as valid a testament containing a provision to this effect (Only through a will can someone transfer the ownership of a property to their child through inheritance!) An exception is made in cases where by transferring the ownership of the property to one child, the parent simultaneously infringes the legitimate share of the other child/another relative, and in this case, the ownership will be reduced to the corresponding extent so as not to violate the legitimate share. For ownership to be an object of inheritance, it must first be designated as transferable during its establishment (a relevant provision can simply be included in the initial contract). Another thing is the possibility of transferring the right of ownership as a whole and entirely, and another is the transfer of the exercise of ownership (it is always freely transferable but only for up to 10 years maximum).

The (legal and economic) disadvantage of this situation is that in no case can the property be transferred unless the owner and the bare owner agree, something not uncommon in relations between heirs, which is why such a move must be the result of mature consideration.

 

The above do not constitute legal advice, and no responsibility is assumed for them. For more information, please contact us.