Does usufruct exist in common law sytem?

Factual Questions
1

Reading an article on “usufruit” on the French version of wikipedia, out of curiosity, I clicked on the link to the English article : “usufruct”. This article refers to Roman law, Indian tribes, the Bible and even socialism, but doesn’t mention anywhere that it could be a currently existing legal concept. I couldn’t even find a translation for the French word referring to its counterpart, ownership without usufruct.

I’m quite baffled because it’s quite a common situation over here. For instance, upon the death of my father, my brothers and I became owners of my parents’ property while my mother kept the usufruct of said property, according to an very common agreement passed between my parents. Similarly, a number of elderly people sell their house in exchange of a yearly payment while keeping the usufruct(*).

So, is this concept utterly unknown under common law? Very rarely used? Or is simply Wikipedia’s article lacking?

(*)Famously, a man made on of the worst possible deals by signing such a contract with Jeanne Calment, the longest lived person as of yet. It became so widely know that there were reports on this (once young) man’s aging and health, and eventual death, several years before her.

2

yes, there is a way to do it, but it’s not called a usufruct. there are at least two different types of property rights which are similar to the usufruct in civil law.

First, there’s the Profit à prendre:

The other similar right is the life estate. A person who owns a parcel of land can split the ownership, by giving one person a life interest in the land, and the remainder to someone else. Typically, that can be used the way your example works: the husband leaves a life estate in the land to his wife, remainder to their children.

3

This article provides some illumination. It seems to be an issue when someone dies intestate. In the US, I think in general (though every state has its own set of rules) the surviving spouse gets half the estate and the descendants split up the other half among themselves. So if you die and you leave a widow and 3 kids, your widow gets half and the kids each get 1/3 of the remaining half (this is grossly simplified). From reading that article, it seems in France if you’re survived by a spouse and kids, the spouse can either get 25% of the estate or a life interest in all of the estate. I imagine most states in the US will have provisions in their probate codes that seek to ensure that a surviving widow is taken care of, which may include a life estate in the family home, but I don’t have any examples for you.

4

Thanks for the answers (I think there’s a mistake in the article quoted about the 25% or the life interest in 100% of the estate, and maybe some others, because I think it’s what happens when spouses have made the peculiar agreement I mentioned in order to avoid the default situation : that the children would inherit the 50% share of the first deceased and want or need the money and as a result have the property sold. But it doesn’t really matter in the context of this thread).

I assume that “remainder” would be the correct word I couldn’t find for ownership without the right of use (the counterpart of “life interest”)?
Finally, what about the other common use I mentioned in my OP : buying the house/property of an elderly person in exchange for a yearly payment (or more rarely lump sum) while s/he keeps a life interest in the house? Is it a known practice in common law countries, or mostly unheard of?

5

It’s definitely not common. I have seen ads on TV for ‘reverse mortgages’ whereby you get to keep living in your home and you get paid money by some party. I never really looked into it any deeper, but it sounds like it might be similar to what you are talking about.

…

Hmm… Wikipedia has a page, of course: Reverse Mortgage - looks like it’s not exactly the same thing, but similar.

6

I think the posts so far are confusing two separate things: the concept of usufruct, and succession rights. The usufruct is a type of property right in the civil law system, which anyone can use. It may have a particularly common application in estate planning, because it fits nicely into the common desire to let the surviving spouse continue in the house/farm until death, when it then passes to the children, but it doesn’t have to be used solely for family matters and succession planning.

Suppose Farmer A has two plots of land and needs money for new machinery and improvements. He could sell the usufruct in one plot of land to Farmer B for a set period of time, and use the money to buy his machinery and improvements. Farmer B is on the second plot and can farm it, until the term of the usufruct is up, and then Farmer A regains control over it.

The idea of a usufruct comes from the Roman civil law conception of property. In civil law theory, there are three aspects of the right of property: the usus, the fructus, and the abusus. Usus is the right to use the property; frucutus is the right to take the fruits of the property; abusus is the right to alienate or alter the property. Usufruct combines the rights of usus and fructus in one person, while another person keeps the abusus.

English common law never adopted this conception of property. Common law property law has its roots in the feudal law of tenure of estates. You can achieve similar results to the civil law types of property, but the theoretical basis is different.

The difference between these property rights and the succession principles mentioned upthread is that when these property rights are used in estate planning, the surviving spouse (or whoever the testator wants to have the immediate possession, like a brother or sister) gains the right of staying on the land, whether by a usufruct in civil law, or by a life interest in common law. The other heirs have no right to the land until the death of that person.

By contrast, under the succession / intestacy laws, all of the heirs, both the surviving spouse and the children, usually have an immediate percentage interest in the assets of the estate. If they can’t reach an agreement on how the estate will be treated, any one of the heirs normally has the right to require that the estate be wound up and the proceeds divided immediately according to the percentages set out in the succession or intestacy laws.

The profit à prendre in English law is not quite as strong as a usufruct, although it is similar. It normally gives the person the right to enter on the land and take a particular fruit from the land, so under the civil law conception it would have a sliver of usus (the right to enter) and a sliver of fructus ( the right to take whatever fruit is granted - apples, or coneys, or whatever).

The life estate is perhaps closest to the usufruct. And yes, the “remainder” would be the equivalent of the person holding the abusus right to the land covered by the usufruct, although there are technical differences between the two. The person holding the right of remainder is called the remainderman.

None of the above is intended as legal advice, of course. I’m running on empty from long-ago common law and civil law classes.

7

I thought the situation as presented by the OP sounded like a life estate–sounds like I was close, anyway. This observer thanks you for the explanation.

Sounds like you should be teaching current-day common law and civil law classes!

8

A usufruct is, speaking in the most general terms, the right to the income and/or use of property, considered as a separate entity from the title to the property. As clairobscur and Northern Piper have noted, it’s a creature of the civil-law system, not a part of the common law. However, it does show up in the common-law system on rare occasions, and I have a hunch this is from the old widespread application of canon law to apply to almost anything the church might have an interest in.

Notably, the idea of a “living”. This is not, in this technical use, synonymous with profession or occupation (though I have a hunch that’s where the quasi-modern use originated). But a “living” is that which supports a Church of England clergyman appointed to serve a given parish church, and it is defined as the usufruct of the lands and endowments of that parish, as distinct from the lands and endowments themselves. That is, if the Rev. Mr. Smith is named to St. Margaret’s in Nether Bogworth, the rents on the land owned by St. Margaret’s and the income from the investments of St. Margaret’s Clergy Endowment are his – not held by the church and paid him as salary (where the church’s lay leaders might use it to exert undue control on his ministry), but paid directly to him in his capacity as minister of the church. He cannot by himself sell the lands or draw down the principal of the endowment, but the usufruct belongs to him so loing as he continues to be the minister of that church. And the definition, AFAICT, calls the living the usufruct of parish holdings.

9

I looked at it. Well…though it serves basically the same purpose (allowing elderly people to live in the house while getting money when they’re still alive) it’s still quite different. For instance :

-It’s a loan against the equity, while in the French use, the property is bought, even though the right to use it is deferred until an undetermined future date. I assume also that as a result, the resident still has all the obligations of an owner (paying taxes or for major repairs, for instance).

-It ends when the person stops living there, at which point the house is sold to reimburse the loan, while here, the owner of the “usufruct” retains it until his death, regardless of how he uses it (for instance he can go to a nursing home and rent the house)

-The proceeds of the sale are only used to reimburse the loan, whatever is left goes to the heirs, while in the system used here, the property fully belongs to the remainderman, even if he barely paid anything because the person died three months later.

-Also, it’s apparently a contract between a bank and an individual, while in the French case, it’s typically a contract between two individuals, one wanting money now, and another a house later.

IOW, the reverse mortgage seems to be much more similar to a peculiar kind of loan with a lien than to what I’m accustomed to. Still seems to serve the same purpose to an extent, tough.

10

I don’t think a reverse mortgage is the same thing. As I understand, the lender gets a security interest in the house and land, and when the borrower dies, the lender has the right to be paid out of the estate. If the house is the only major asset of the estate, it may have to be sold to pay the debt.

However, in a usufruct, the person who holds the right of abusus has a true property right in the house and land, and gains the full property rights when the usufruct ends.

clairobscur, is the type of arrangement you mentioned in your OP called a rente viagère? (not sure about the spelling.) I remember reading about that case. I don’t think it was a usufruct, but another type of arrangement. The owner of the property agrees to leave it to the lender on the death of the owner. In exchange, the lender makes annual or monthly payments to the owner of the property, until the death of the owner.

In that particular case, the owner long outlived her normal life expectancy, but the lender was bound to keep paying the agreed amounts. It turned out to be a very poor investment for him, since ultimately he paid her much more than the property was worth. (And I think he died before she did, so his estate had to honour the agreement and keep making the payments.) I’m not sure if that’s a case of usufruct, since in a usufruct, the holder of the abusus right doesn’t have to make any payments to the holder of the usufruct. However, I suppose it could be that the holder of the property sold the abusus to the lender in exchange for regular monthly or yearly payments rather than a lump sum, so it might be a usufruct/abusus arrangement, rather than a purely contractual one.

I don’t think we have the equivalent in the common law world, but I would say it looks like a type of annuity, secured by the property, although it does have some similarity to the reverse mortgage mentioned by ClintPhoenix.

11

** Northern Piper **, thanks for the detailed explanation.

I still have an problem understanding the difference between the concepts of “usus” and “fructutus” that you mention regarding Roman law.

What would it mean in practice if those concepts still existed and I owned the “usus” of a house but not the “fructutus”? Would living in the house without paying rent be “usus” or “fructutus”

What about a field? Could I cultivate wheat because I own the usus but not harvest it because someone else has the “fructutus”?
I understand that your response won’t be a legal advice and I promise not to rely upon it in any Roman court.

12

Well, suppose you want to harvest some apples from the farmer’s orchard, but don’t want to have to do all the upkeep. You might be able to persuade the farmer to sell you the right to take some apples each year, with the right to go onto the field for that purpose. That’s primarily a fructus arrangment, with a small bit of usus (the right to go onto the field).

Alternatively, if you have some money to invest, you might buy the right to a portion of the fruits from the farmer - say, 1/3 of the crop. That’s not any usus right, but simply the right to have the farmer deliver 1/3 of the fructus to you each year. If the farmer needs some money (and what farmer doesn’t?), that might be an attractive option for the farmer to get some immediate cash in return for giving up some of the crop each year, usually for a term of years.

13

Yes, it’s called a “rente viagère”, indeed. I always assumed that the beneficiary kept the “usufruit” and was selling the remainder (“nue-propriété” in French) in exchange for the agreed upon payments. But I might be wrong and there might be differences I’m unaware of.

Yes, that’s what happened. The payments are generally based on the value of the house and on actuary tables, so if the seller turns out to live to 120, you’re out of luck. Especially since the older the seller, the higher the payments. And I think she was already about 80, during the 60s, when she entered the contract. So, she probably was expected to live only a few years and the payments were probably very significant.

By the way, I’m not sure there’s really a concept of “estate”, here, so it would be the heirs who kept paying, since they accepted the inheritance, along with the existing obligations. I remember they interviewed the widow of the buyer after Jeanne Calment death (she stated that her and her family didn’t resent Calment’s long life and were saddened by her passing away)

14

If I believe Wikipedia, it seems that in this situation, the beneficiary of a “rente viagère” is indeed keeping the “usufruct” and selling the “remainder”. However, the “rente viagere” is a broader concept (for instance, monthly payments made to the beneficiary of a life insurance till his death are also a “rente viagere”).

Also, there was a mention of the case of Jeanne Calment. It was mentioned she entered the contract in 1965, at the ripe age of 90. Again I suspect that as a result the “rente viagere” was very high, and the notary public probably paid a total amount completely out of proportion with the actual value of the house.

Finally, there was a brief mention that seemed to imply that there was a difference between the “usus” and the “fructus”. So, those concepts seem to still exist separately under French law, even though I only ever heard of the “usufruit” that combines both.

15

Quite right - I was using the common law term. The whole concept of an estate is an outgrowth from the feudal roots of our property law.

Interesting about the family. It sounds like it was a very personal relationship between them and Mme Calment.

16

Ok. I found a brief note about the “usus” and the “fructus” disjointed in the case of a house (apparently related to some divorce cases). Someone with the “usus” but not the “fructus” can live in the house but can’t rent it.
Just in the odd case somebody would be interested in knowing that.

17

I remember reading about the guy who bought Jeanne Calment’s villa, subject to her life tenancy (or whatever the equivalent actual legal term was) back when she became news as the oldest living human being. As an incidental fact about her, having nothing to do with usufruct or any of its legal nomenclature in-laws, Mme. Calment was in her youth a clerk in a store frequented by Vincent VanGogh, and knew him personally if somewhat casually. When one of the movies about him came out, an enterprising reporter went and interviewed her – her reminiscences of him as a living person she had known were quite interesting.

18

I think usufruct is called liferent in Scots law.

19

I don’t think it’s the same thing either, it was just the closest thing to what the OP was asking that I could think of.

It makes me wonder though, could a person make an intervivos gift of the remainder interest in their property subject to their own life estate? It seems strange, but maybe possible. Anyone have an opinion?

20

I would think so. The different types of property interest aren’t restricted to being used in a will - subject of course to any legislation on the topic, like the abolition of entails. However, you’d want to get an opinion from a solicitor who knows about this area of law before taking such a step.