Usufruit and rental

[nectarine]

A friend is in a difficult situation. Not married, partner died, his kids came on the scene and demanded their share. They owned half the house each. Their wills allowed the survivor to live in the house and enjoy it until their death, after which the first-deceased's share passed through to his family.

The notaire says "oh yes, usufruit, you can live in the property until you die but you have to pay his family some rental for their portion of the house that you are occupying".

This is only a summary, and I only have some sketchy facts, although I have given her the details of an English speaking notaire that we have used who seems to be on the ball.

But my main question is: does the right to continue to live in a house carry, with it, an obligation to pay rent ? Surely usufruit means you have an absolute enjoyment of the house and the eventual inheritors just have to sit it out and wait until you pop your clogs?

Sorry can't give more details as it is all sketchy, but all advice and thoughts welcome, particularly if anybody has been through this already.

Many thanks.

[NormanH]

I have the usufruit on the house I live in, and my son owns the murs.

I certainly don't have to pay him rent (in fact I can let out part of it) but I do have to pay the local taxes.

http://vosdroits.service-public.fr/F934.xhtml

Quels sont les droits de l'usufruitier ?

Droit d'utiliser le bien

Exemples : utiliser soi-même le bien, le louer

(l'accord  du nu-propriétaire est nécessaire pour les baux ruraux,

commerciaux, artisanaux, etc.).

Droit de percevoir les fruits du bien

Exemples : récoltes, intérêts d'une somme d'argent, loyers.

Les fruits sont perçus tant que dure l'usufruit.

À la fin de l'usufruit, l'usufruitier ne peut réclamer aucune  indemnité pour avoir amélioré le bien.

Haut

Quelles sont les principales obligations de l'usufruitier ?

• Faire procéder à un inventaire.

• Fournir des garanties au nu propriétaire, sauf si ce dernier l'en dispense.

• Faire toutes les réparations d'entretien. Les

  grosses réparations sont à la charge du nu-propriétaire sauf si elles
  résultent du défaut d'entretien de la part de l'usufruitier (pour un
  bien immobilier, les grosses réparations concernent le gros-œuvre).

• Payer la taxe foncière et la taxe d'habitation s'il s'agit d'un bien immobilier.

[woolybanana]

Norman, it sounds as if one of the children is his and the other hers, which might change the situation

[suein56]

[quote user="nectarine"]Not married, partner died, his kids came on the scene and demanded their share. They owned half the house each. [/quote]

Them not being married complicates the matter. Were they PACS'd ? If they weren't then there is a chance that she might have to pay rent to use her partner's share of the house.

Edit: I don't know this for sure re rental but, amongst the many papers I have read concerning succession, I vaguely remember reading something along those lines.

[quote user="woolybanana"]Norman, it sounds as if one of the children is

his and the other hers, which might change the situation[/quote]

Even more complicated.

Sue

[nectarine]

sorry, I should clarify. They both have children from previous relationships but none together. Not married. Each of them owned half of the house and made wills giving the survivor the right to enjoy/live in the house for the rest of their lifetime. After the second death, then the house would be split into two, and the children from the relationships would get their respective portions from their parent's half.

It's the rental aspect that worries her. I thought that usufruit gave you the right to remain in the half, being your half of it and the deceased's half. Apparently the notaire says that her partner's half is split into four, i.e. his 3 kids get 1/4 share of his half as does she, therefore she would own her own half and a 1/4 of his, i.e. 5/8 of the house, and she would have to pay rent on the remaining 3/8 to them.

I don't know if they were PACS'd but I know they took advice to protect each other.

Any more ideas, please, or advice?

[parsnips]

[quote user="nectarine"]A friend is in a difficult situation. Not married, partner died, his kids came on the scene and demanded their share. They owned half the house each. Their wills allowed the survivor to live in the house and enjoy it until their death, after which the first-deceased's share passed through to his family.

The notaire says "oh yes, usufruit, you can live in the property until you die but you have to pay his family some rental for their portion of the house that you are occupying".

This is only a summary, and I only have some sketchy facts, although I have given her the details of an English speaking notaire that we have used who seems to be on the ball.

But my main question is: does the right to continue to live in a house carry, with it, an obligation to pay rent ? Surely usufruit means you have an absolute enjoyment of the house and the eventual inheritors just have to sit it out and wait until you pop your clogs?

Sorry can't give more details as it is all sketchy, but all advice and thoughts welcome, particularly if anybody has been through this already.

Many thanks.[/quote]

Hi,

   Without more detail it's not possible to give a definite answer.   If she has inherited the usufruit of the deceased unmarried partner's half , she would have had succession tax to pay on it at 60% -she would have noticed that , I'm sure, and there would not have been any justification for demanding rent.

  The situation the notaire has described is that which exists when two parties share a house in "indivision" , each owning half , in which case the children are entitled to rent on half the house. 

 Was the will a french one or english?  It doesn't seem to me that she has a "usufruit" in the full legal sense. 

     But as I say , more info is needed.   Hopefully your" on the ball" notaire will sort it out.

     I would be interested to hear the final outcome.

PS.  Just read OP's last post.   Even more confused now.  What is described looks like a PACS where the house was held in "indivision" and each partner had made a will giving the "occupation gratuite et attribution préférentielle " to the survivor  .  See here;

www.infopacs.fr/pacs-succession-logement.html

If this is the case then no rent would be due to the step-children.  The notaire would then seem  to be mistaken.

[woolybanana]

Take a fotocopy of the will to a different notaire for a second opinion.

[suein56]

[quote user="woolybanana"]Take a fotocopy of the will to a different notaire for a second opinion.[/quote]

Good idea and potentially a shrewd move as such an opinion should be free of charge as the notaire will just be commenting on an existing legal situation. As he will not be opening a dossier, which is where the costs come in, with a view to taking action.

Sue

[nectarine]

Thank you for all advice and I shall be seeing her and taking a look at the documents, and perhaps come back with more information (apologies it was a bit sketchy). Yes, she's been hit with inheritance tax.

We're going to see the other notaire and I will report back when this is done, but - meantime - thank you for all your extremely helpful advice and comments.

[idun]

As I used to go on about, and will do again. Live in France with someone.... get married!

 Don't be a concubine in France, in fact don't be pacs'd, there are big  big disadvantages with that...... and that good law was brought in  for homosexual couples as the government wasn't brave enough to allow marriage. And my has it been abused, the pacs'd system, but as far as I have seen, by hetrosexual couples.....who aren't couples.

This isn't for the OP's friend, it is for others. What with inheritence tax, getting paperwork water tight to protect one's rights, marriage is the only way as far as I am concerned. Not about big white dresses or big do's, or religion, just legal contract that as far as I am concerned all loving hetrosexual couples need to, if they live together. And I'd let homosexual couples marry to, and hopefully, the politicans'll get around to doing something about it eventually.

 

And yes, we did live together for a few years, isn't as if I haven't done both.

 

 

 

[Debra]

Even so, married or not, I didn't think it was possible to take the

usufruit option when there are reserved inheritor children from a prior

marriage.  So it seems to me that the notaire is taking that view and

saying that as she owns more than half of the property then they can't force her

to sell it (you need to own more than two thirds to do that) but that she will

have to pay them rent for their 3/4 of their father's half.

[Debra]

[quote user="nectarine"]A friend is in a difficult situation. Not married, partner died, his kids came on the scene and demanded their share. They owned half the house each. Their wills allowed the survivor to live in the house and enjoy it until their death, after which the first-deceased's share passed through to his family. [/quote]Was this will written in France and checked by a notaire?  How did it allow this as it's not as straightforward as just writing that into your will, in France and as I said, I'm not sure it's possible in this scenario.

[Russethouse]

[quote user="Debra"]Even so, married or not, I didn't think it was possible to take the

usufruit option when there are reserved inheritor children from a prior

marriage.  So it seems to me that the notaire is taking that view and

saying that as she owns more than half of the property then they can't force her

to sell it (you need to own more than two thirds to do that) but that she will

have to pay them rent for their 3/4 of their father's half.[/quote]

Isn't that three eighths ?

Rather than three quarters...

[Russethouse]

[quote user="Debra"]Even so, married or not, I didn't think it was possible to take the

usufruit option when there are reserved inheritor children from a prior

marriage.  So it seems to me that the notaire is taking that view and

saying that as she owns more than half of the property then they can't force her

to sell it (you need to own more than two thirds to do that) but that she will

have to pay them rent for their 3/4 of their father's half.[/quote]

Isn't that three eighths ?

Rather than three quarters...

[andyh4]

(Correct it is 3/8ths of the whole or as written 3/4 of the half owned by the father) x 2

[parsnips]

[quote user="Debra"]Even so, married or not, I didn't think it was possible to take the

usufruit option when there are reserved inheritor children from a prior

marriage.  So it seems to me that the notaire is taking that view and

saying that as she owns more than half of the property then they can't force her

to sell it (you need to own more than two thirds to do that) but that she will

have to pay them rent for their 3/4 of their father's half.[/quote]

Hi,

     Married , the survivor can take the usufruit option,  PACSed the survivor can be left the usufruit in a will, unmarried the survivor cannot take the usufruit , or , in the presence of step-children , be left more than the "quotité disponible", in this case 1/4 of the deceased's half of the property.

[Debra]

[quote user="parsnips"]Married , the survivor can take the usufruit option,  PACSed the survivor can be left the usufruit in a will, unmarried the survivor cannot take the usufruit , or , in the presence of step-children , be left more than the "quotité disponible", in this case 1/4 of the deceased's half of the property.[/quote]To be clear though, isn't this done via that donation to your spouse thing where you each give the other usufruit on your own half of the property, rather than by willing the usufruit or the spouse choosing to take it rather than 10%, which isn't actually possible when there are children from a prior marriage?  (I got the impression that the usufruit had been willed directly, which I though wouldn't be possible whether married or not.)

[Debra]

It really depends on exactly how the 'will' was written and as somebody already advised, the best thing is probably to see another notaire.

[Debra]

[quote user="nectarine"] Their wills allowed the survivor to live in the house and enjoy it until their death, after which the first-deceased's share passed through to his family. [/quote]This is what I'm referring to.  If you wrote that into a UK will pretty much as it is, that is what would happen.  However, in France you have to do a donation between spouses to achieve the same effect.  The person concerned may not have known this?  Here is an explanation of usufruit from the notaires site: http://www.notaires.fr/notaires/en/usufruct [quote]W­hat is usufruct ?

Let us take a house as an example. You need to remember that a right of ownership

gives an owner three types of prerogatives: the right to use the

property (i.e. live in it), the right to receive income from the

property (rent), and the right to dispose of the property (i.e. sell

it). But an owner can divide these prerogatives into two groups: on the

one hand there is the usufruct

which includes the right to use the property and receive income from

it, while on the other there is the bare o­wnership which includes the

right to dispose of it. The right of ownership is therefore a combination of the usufruct and the bare ownership.

Usufruct is most commonly for life, i.e. is extinguished with the death of the person holding it. It may also be constituted for a set term; this is known as temporary usufruct.

The person who holds the right to use the property and receive income

from it is known as the usufructuary while the person who has the right

to dispose of the property is known as the bare owner.

You should not confuse usufruct with the right to use and occupy, which is strictly personal and limited to living in a property without the right to let it. Usufruct is a property right that may apply both to real estate and movables (e.g. portfolio of shares).

Valuing usufruct

If, for example, the usufructuary and

the bare owner agree to sell the property, how should the proceeds of

the sale be divided between them ? If, for example, your parents give

you the bare ownership of an apartment, what value will the authorities tax you on ? If, for example, you inherit the usufruct of a property (this often happens between spouses), on what value is the inheritance tax calculated ? The question of valuing usufruct and bare ownership (the two are linked, of course) is therefore very important. The rules that apply to gifts, inheritance, sales, exchanges, equity investments, etc. are set by law.

Valuing is done by applying a scale that takes the life expectancy of the usufructuary into consideration because usufruct only exists during the lifetime of the person who holds it.

Age of the usufructuary	Value of the usufruct as a percentage of the value of the full ownership
Up to 20 years	90 %
21 to 30 years	80 %
31 to 40 years	70 %
41 to 50 years	60 %
51 to 60 years	50 %
61 to 70 years	40 %
71 to 80 years	30 %
81 to 90 years	20 %
Over 91 years	10 %

­

A special rule exists for set-term usufruct (temporary usufruct) that ignores the age of the usufructuary. In this situation, usufruct is estimated as 23% of the value of the full ownership for each complete ten-year period.

Do not forget that the tax authorities value the right to use and occupy at 60% of the value of the life usufruct.

Social housing usufruct

This is a new measure that came into force on 20 March 2009 which allows private owners to transfer the usufruct of both new and old properties for a limited period of time to a social housing landlord or approved voluntary organisation.

In exchange, owners receive capital that is subject to special tax rates. This type of temporary usufruct agreement must be entered into for a minimum 15 and maximum 30 years.

Do not hesitate to contact your notaire who will be able to give you all the information you need on this subject.[/quote]

[parsnips]

[quote user="Debra"][quote user="parsnips"]Married , the survivor can take the usufruit option,  PACSed the survivor can be left the usufruit in a will, unmarried the survivor cannot take the usufruit , or , in the presence of step-children , be left more than the "quotité disponible", in this case 1/4 of the deceased's half of the property.[/quote]To be clear though, isn't this done via that donation to your spouse thing where you each give the other usufruit on your own half of the property, rather than by willing the usufruit or the spouse choosing to take it rather than 10%, which isn't actually possible when there are children from a prior marriage?  (I got the impression that the usufruit had been willed directly, which I though wouldn't be possible whether married or not.)

[/quote]

Hi,

    Normally following the latest reform, a surviving spouse can opt for the usufruit of all the deceased's assets; however ,in the presence of step children , the couple can arrange for this to be available either by a "donation entre époux" (if there are children on one side only , a single "one-way" donation will suffice), or by testament. Although all the assets can be taken in usufruit , only the deceased's "quotité disponible " can be donated or willed , in the presence of step children.

[parsnips]

[quote user="Debra"][quote user="parsnips"]Married , the survivor can take the usufruit option,  PACSed the survivor can be left the usufruit in a will, unmarried the survivor cannot take the usufruit , or , in the presence of step-children , be left more than the "quotité disponible", in this case 1/4 of the deceased's half of the property.[/quote]To be clear though, isn't this done via that donation to your spouse thing where you each give the other usufruit on your own half of the property, rather than by willing the usufruit or the spouse choosing to take it rather than 10%, which isn't actually possible when there are children from a prior marriage?  (I got the impression that the usufruit had been willed directly, which I though wouldn't be possible whether married or not.)

[/quote]

Hi,

    Normally following the latest reform, a surviving spouse can opt for the usufruit of all the deceased's assets; however ,in the presence of step children , the couple can arrange for this to be available either by a "donation entre époux" (if there are children on one side only , a single "one-way" donation will suffice), or by testament. Although all the assets can be taken in usufruit , only the deceased's "quotité disponible " can be donated or willed , in the presence of step children.