Written by Franka Schulz | by Poll Immobilien GmbH am . Published in Economics
Frankfurt am Main — Sell or give away your own property and still live in it? This is possible – both in the form of a lifelong right of residence and in the form of a usufruct. However, there are differences between the two rights of use, especially with regard to the beneficiary’s legal room for manoeuvre. Which alternative is more suitable generally depends on the individual circumstances and needs of the property owner. The VON POLL REAL ESTATE experts (www.von-poll.com) provide an overview of the terms right of residence and usufruct and explain how the two differ.
What is the right of residence?
Lifelong tenure is the right to occupy all or part of a property without owning that property. The authorized person may also use the facilities and facilities intended for joint use. In order to maintain a permanent and reliable existence, the right of residence can be anchored in the land register. It is thus tied to the property and remains in place even in the event of a change of ownership.
“With the lifelong right of residence, the beneficiary can remain resident in the property until the end of his life. The right of residence is tied to one person and cannot be transferred to a third party. It is a so-called personal easement,” says Tim Wistokat, LL.M., Attorney and Head of Legal Department at VON POLL IMMOBILIEN.
In practice, housing law is often applied when parents want to transfer their property to their children while they are still alive and still want to live in the house. The same applies to the transfer of a right of residence to a spouse or life partner. With this, the owner protects the partner, so that in the event of his own death he can continue to live in the property, even if the heirs want to sell the property.
What is the usufruct?
In the case of usufruct, the entitled person may not only live in the property, but also derive additional benefits from it (paragraph 1030 paragraph 1 BGB). This means that the beneficiary may, for example, rent out the property and then keep the income himself. As with the right of residence, the usufruct is entered in the land register and is retained when the property is sold. “From an economic point of view, the usufructuary remains just as entitled to use as the owner. He is also obliged to manage, maintain and insure the property in the interest of the owner,” explains lawyer Wistokat. The usufruct ends upon expiry of the agreed period or upon the death of the usufructuary.
Similar to the right of residence, the usufruct is used, among other things, in the case of anticipated succession. The advantage of usufruct is that the beneficiary can also rent the property if he is no longer able to live in it – for example due to old age. The rental income can in turn be used to finance the new dwelling of the usufructuary.
What is the difference between right of residence and right of usufruct?
In short, both the right of residence and the right of usufruct are rights of use to a property, both of which can be entered in the land register. “While the right of residence only allows the beneficiary to live in the agreed part of the property, the usufructuary can also benefit from the property,” says Tim Wistokat from VON POLL REAL ESTATE.
The role of usage rights in the sale of real estate
A right of residence entered in the land register or a registered usufruct can affect the value of a property. If the property is transferred to the heirs at an early stage, the rights of use usually do not play a major role. However, if the house is to be sold, such an encumbrance in the land register can become problematic. For outside buyers, an encumbered property is usually not very practical – owners should keep this in mind when planning to sell the property.
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About von Poll Immobilien GmbH
the by Poll Immobilien GmbH has its headquarters in Frankfurt am Main. The main focus of her work is the brokerage of real estate of stable value in preferred residential and business locations. The management of the company consists of Beata von Poll, Daniel Ritter, Sassan Hilgendorf and Dr. George Hahn. With more than 350 shops and over 1,500 colleagues, VON POLL IMMOBILIEN, which also includes the divisions VON POLL COMMERCIAL, VON POLL REAL ESTATE and VON POLL FINANCE, is in Germany, Austria, Switzerland, Spain, Greece, Portugal, Hungary, Italy, represented in the Netherlands, France and Luxembourg, making it one of the largest brokerage companies in Europe. The Capital Makler-Kompass once again awarded VON POLL IMMOBILIEN top marks in its October 2021 issue.
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