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USUFRUCTORY Explained
USUFRUCTORY Explained
The parents as usufructuaries have the right to occupy and use the property until their
respective deaths. On the death of the last-dying the usufruct would lapse and the full
property rights would automatically vest in their son. The parents as holders of the usufruct
are responsible/obliged to maintain the property in its current state, fair wear and tear
excepted. Their obligations also extend to the payment of rates levied against the property,
payment of all services (water, electricity and other municipal levies) rendered to the
property during the currency of the usufruct.
While the usufructuary can rent the property out, they are not allowed to sell it or bequeath
it to another party.
The usufructuary also has obligations and responsibilities in regard to the property. He/she
should ensure that the property is not damaged or altered in any way and at the end of the
stipulated period, the usufructuary must hand the property back over to the rightful owner
or heirs.
The usufruct must be used for its intended purposes, and the usufructuary is legally bound
to act as a diligent owner that may not misuse the property. The usufructuary is also
responsible for paying the property rates and general day-to-day costs of maintaining it. He
or she is not obliged to do any extensive repairs that result from normal wear and tear or
daily use. While there is no obligation for the usufructuary to insure the home against
storm, fire or other such damage, it is advisable and in his/her own interest to do so.
A usufruct is a way to ensure a surviving spouse has a roof over his/her head and is looked
after for the remainder of his/her life. However, property owners who want to include a
usufruct in their wills should consult with an attorney and a professional tax consultant or
financial adviser before they do so. It is necessary to fully understand its implications and
how it can impact those involved.
A usufruct can be created in a notarial deed of cession or retained by the seller when selling
a property to reduce the amount of estate duty or transfer duty payable. When this is
considered, it is important to be aware of the possible tax implications for the parties
involved, both in the short and long-term.