Usufruct is a real right that gives a person, the usufructuary, the right to enjoy the property of another and take its fruits, with the obligation to preserve its form and substance, while ownership remains with the owner (the naked owner). It may be created by law, by the will of the parties through contract or a will, or by prescription. The usufructuary may use the property and receive its income but must care for it as a good father of a family and return it when the usufruct ends, which commonly happens on the death of the usufructuary or the expiry of the agreed term.
Filipino families often want one person to enjoy and live off a property while ownership stays with someone else — a parent letting a child use land, a spouse enjoying property for life. The legal tool for this is usufruct.
What Usufruct Is
Usufruct is a real right under the Civil Code that gives the usufructuary the right to enjoy the property of another and receive its fruits — the harvest, the rent, the income — while the ownership remains with the naked owner. The usufructuary gets the use and enjoyment; the owner keeps the title. The defining condition is that the usufructuary must preserve the form and substance of the property (with exceptions the law allows for things that are consumed or that naturally deteriorate).
How Usufruct Is Created
Usufruct may arise:
- By law — for example, the usufruct that parents may have over certain property of their unemancipated children;
- By the will of the parties — through a contract during life, or through a will (a testator may leave property to one person in ownership and its usufruct to another); and
- By prescription — acquired through the manner and period the law provides.
Rights of the Usufructuary
- To use and possess the property and receive all its fruits — natural, industrial, and civil (such as rent);
- To lease the property or otherwise transfer the usufruct, generally for the duration of the usufruct; and
- To make useful improvements or additions, subject to the rules on removal and indemnity.
Obligations of the Usufructuary
- Before starting, generally to make an inventory of the property and give security (a bond), unless excused;
- To take care of the property as a good father of a family and make ordinary repairs;
- To pay the annual charges and taxes on the fruits; and
- To return the property to the owner when the usufruct ends, in the condition required.
Extraordinary repairs are generally the owner’s responsibility, though the usufructuary must notify the owner when they are needed.
How Usufruct Ends
Usufruct is extinguished by, among others: the death of the usufructuary (usufruct is often for life); the expiration of the agreed period or fulfillment of a resolutory condition; the merger of the usufruct and ownership in one person; total loss of the property; and renunciation by the usufructuary. On termination, the property returns to the naked owner, now with full ownership restored.
Practical Advice
Usufruct is a flexible way to let someone benefit from property for life or a term while keeping ownership elsewhere — common in estate planning and family arrangements. To avoid disputes, put it in writing, specify the term, address repairs and taxes, and make the inventory. When a usufruct is created by will or contract, careful drafting prevents fights between the usufructuary and the owner later.
Frequently Asked Questions
What is usufruct? A real right to enjoy another's property and take its fruits, while ownership stays with the naked owner. The usufructuary gets use and income but must preserve the property's form and substance and return it when the usufruct ends.
How is usufruct created? By law, by the will of the parties through a contract or a will, or by prescription. A testator can leave ownership to one person and the usufruct to another.
What are the usufructuary's main duties? To make an inventory and give security at the start (unless excused), care for the property as a good father of a family, make ordinary repairs, pay charges and taxes on the fruits, and return the property when the usufruct ends.
How does usufruct end? By the death of the usufructuary, expiry of the term, merger of usufruct and ownership, total loss of the property, or renunciation, among others. The property then returns to the owner with full ownership restored.
This commentary is for general informational purposes only and does not constitute legal advice. For guidance specific to your situation, please consult a licensed attorney.
If you want to set up a usufruct or are in a dispute over one, our firm can draft or advise on the arrangement. You may reach us via Viber or WhatsApp, call us at 0995 433 5550, or send an email to vivasnobles@gmail.com. We look forward to hearing from you.