The definition of a usufruct is a legal right given by an owner to someone who is not the owner, to use the owner’s property for a certain period, usually for the remainder of that person’s life.
Rights and Obligations of a Usufructuary
While the usufructuary can rent the property out, they are not allowed to sell it or bequeath it to another party.
The usufructuary also has obligations and responsibilities in regard to the property. He/she should ensure that the property is not damaged or altered in any way and at the end of the stipulated period, the usufructuary must hand the property back over to the rightful owner or heirs.
The usufruct must be used for its intended purposes, and the usufructuary is legally bound to act as a diligent owner that may not misuse the property. The usufructuary is also responsible for paying the property rates and general day-to-day costs of maintaining it. He or she is not obliged to do any extensive repairs that result from normal wear and tear or daily use. While there is no obligation for the usufructuary to insure the home against storm, fire or other such damage, it is advisable and in his/her own interest to do so.
- can utilize the property personally;
- can rent out the asset;
- must maintain the asset;
- must pay the rates and taxes, water and electricity and levies on fixed property.
Rights and Obligations of the Bare Dominium holder
Can expect that the Usufructuary maintain the asset.
Is responsible for short term insurance but may arrange with the usufructuary to pay the insurance premiums.
How is the value of the usufruct calculated?
Man died and bequeathed his fixed property to his son (Aged 31 years) subject to a usufruct in favor of his wife (Aged 54 years).
Calculation of value of usufruct at creation of usufruct:
Calculations for the purposes of the valuation of annuities or of fiduciary, usufructuary or other limited interests in property in the estate of any person who died or dies on or after 1 April 1977 shall be made in accordance with the following Table:
THE EXPECTATION OF LIFE AND THE PRESENT VALUE OF R 1 PER ANNUM FOR LIFE CAPITALIZED AT 12 PER SENT OVER THE EXPECTATION OF LIFE OF MALES AND FEMALES OF VARIOUS AGES.
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TONKIN CLACEY PRETORIA
012 346 1278