Everything you need to know about usufructuary rights

2022.07.02

We often hear that the right of usufruct is stronger than the right of ownership. Is this statement true? What are the rights of the beneficiary against the owner? How long does widowhood last and what exactly does it cover? Is the usufruct right inheritable? Answers to the most important questions regarding usufructuary rights.

Usufructuary: the establishment of usufructuary rights

The easiest way to establish the right of usufruct is in the case of real estate, when the parties include the registration of the usufruct in the contract of sale to be concluded, since in this case the right of usufruct can be established at the same time as the acquisition of ownership of the real estate without additional costs. What does the right of usufruct mean? The usufruct right is a property right granted to a natural or legal person, which temporarily grants the right to use and benefit from someone else's property. While the beneficiary has the right to use the property or chattel, he cannot damage or destroy it or dispose of it, i.e. the beneficiary cannot sell the property. The usufructuary right is established by law or by contract, and is provided for in the Civil Code. Right of usufruct until death We are talking about usufructuary rights created by legislation, for example in connection with the widow's right, when one spouse dies and the other has the right of usufruct until death on the jointly inhabited real estate, as well as on the furnishings and fittings belonging to it. The usufruct until death is canceled by a unilateral declaration, which requires a document countersigned by a lawyer. What does it cost and how much does it cost to register the right of usufruct? The usufructuary right can be established free of charge or in return for consideration by means of a contract, and in the case of real estate, it must be registered in the real estate register, even if it was created through the right of inheritance.

• It may apply to the entire property, or even to a certain portion of it.
• The contract must be included in a public document or a private document countersigned by a lawyer, the fee of which depends on the lawyer's or notary's pricing.
• You still have to pay the land office procedure fee, which is HUF 6,600, as well as the title deed fee, which is HUF 1,000.
• In the event of the establishment and termination of a usufruct right, usufruct duty must be paid, unless the legal transaction was established between close relatives (lineal relatives or spouses). In the case of free legal transactions, the fee is 18% of the value of the right of usufruct, and in the case of residential real estate it is 9%, while in the case of legal transactions with an encumbrance it is 4% of the value of the right of usufruct. Obligations and rights of the beneficiary Rights of the owner in the case of real estate:
  

• you can encumber it, give it as security, for example by registering a mortgage, or
• you can also transfer ownership by sale or gift.

The relevant legislation clearly ties the hands of the owner in the matter of possession, who can only exercise the right to use and reap the benefits if the beneficiary does not wish to use these rights.

Rights of the beneficiary

• for possession
• for use,
• for utilization and
• they cover taking benefits.

The beneficiary is charged - with the exception of extraordinary repairs and restorations - for the costs related to the maintenance of the property, as well as the obligations related to its use. The beneficiary's payment obligations also cover public charges. Termination, transfer and cancellation of the usufruct right The usufruct is terminated in the following cases:

• at the end of the fixed period,
• if the holder waives his right,
• upon the death or termination of the rights holder without legal successor,
• if the beneficiary acquires the ownership of the thing, or
• if the thing is destroyed.

When the usufruct ceases, the usufructuary returns the thing to the owner, but he is not obliged to reimburse the depreciation resulting from the intended use. The beneficiary cannot therefore transfer the right to usufruct to another, but he can transfer the right to possession, use and reap benefits, unless he would do so in exchange for consideration. This is only possible if the owner does not claim to use it under the same conditions Selling the right of usufruct Since the usufruct is a personal right, it cannot be transferred or sold, only the exercise of the right can be transferred. If the owner agrees, the usufructuary can waive his right to usufruct in favor of another person, so a new usufruct must be registered, which is considered a taxable transaction. Cancellation of the right of usufruct The right of usufruct can also be canceled by cancellation, if the beneficiary waives the right of use, which can be done in return for consideration or free of charge, but the legal transaction must be included in a public document or a private document countersigned by a lawyer. A document is not required if the cancellation takes place due to the expiration of the period specified in the registration. Redemption of the right of usufruct It may happen that, when retrieving the title deed of the apartment to be purchased, the buyer is confronted with the fact that usufruct has been registered on the property. Although it is still possible to buy the apartment in this way, taking possession can be difficult, since the owner can use the property during the period of the usufruct. On the other hand, the right holder can waive the benefit in return for consideration or free of charge. If the beneficiary waives his usufructuary right in exchange for consideration, we are talking about redeeming the usufructuary right. The value of the usufructuary right. The usufructuary right is calculated in accordance with Act XCIII of 1990 on taxes. is based on § 72 of the Act, the starting point of which is the one-year value of the property right, which is 1/20 of the transaction value of the thing. In the case of a right of indefinite duration (for example, until death), the value of the right can be determined by taking into account the age of the entitled person.

If the beneficiary:

• younger than 25 years, ten times the one-year value,
• 25-50years old, eight times the one-year value,
• 51-65 years old, six times the one-year value,
• If you are older than 65, the value of the right will be four times the one-year value.

Example: The one-year value of a property worth HUF 50 million is HUF 2,500,000. In the case of a 75-year-old beneficiary, the consideration is four times the one-year value, i.e. HUF 10 million. Sale of real estate encumbered with a usufruct If a prohibition against alienation has been registered on the real estate, the real estate encumbered with an usufruct can only be sold if the usufructuary consents to this in a contract. In other cases, the real estate can be sold without the consent of the beneficiary, but the usufruct will remain in force on the purchased property for the period established in the law or in accordance with what was previously included in the contract. This is also why you have to be very careful if you want to buy such an apartment, because possession can only take place after the usufruct expires, unless, of course, we pay the value of the usufruct to the owner of the right at the time of sale.

Do you have any questions about the benefits? Contact your home expert!