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Thread: Usufruct

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    Usufruct

    I inherited a house a long time ago with a usufruct registered against it in favour of a family member. The usufructary is infirm and cannot live in the house herself so she has rented it out and stays in a frail care centre. My question is can I sell the property and if so what would the conditions be, ie does she have to give her authority?

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    Platinum Member sterne.law@gmail.com's Avatar
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    In terms of a usufruct a property ownership is left to a person(yourself) subject to the use of another.
    You may find the wording of the will will allow you to assuem ownership on the basis that occupation is no longer possible by the original beneficiary.
    If she gives permission then you may proceed with the sale. On her own she can not sell it because she does not have a real right to the property - or in simpler terms she does not really own it.

    The one issue may be that she insists that you pay her a monthly stipend (equal to the rental)compensation. I would presume that the intention of the deceased was to leave you the property BUt to provide for the lady. This would probably support the obligation to provide alternative accomodation.
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    BusFact (31-Jul-11), Dave A (30-Jul-11), Mark Atkinson (30-Jul-11)

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    Thank you. The thing that puzzles me is she is unable to live in the house as she is pretty frail and has been moved into a frailcare centre permanently. I still don't have any legal right to either move move into the house or to sell it. Its frustrating as money needs to be spent on the upkeep. So if I offer to pay her an amount equal to the rent the property could earn, we could do a deal?

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    Hi Savana. This isn't going to help your particular case, but please contact a tax consultant about this ... I studied this as part of my honours last year, and usufructs were definitely the most confusing section in tax for me ... there are all sorts of weird and wonderful ways that you can be taxed, and I'm pretty sure it would be unpleasant if down the line SARS performs an audit and discovers that you had to pay this and that tax which you didn't even know about. I know tax isn't something you want to hear about now, but I definitely suggest you take it into cosideration and I would highly recommend you contact a tax consultant in your area.

    I'm afraid I won't give you any advice on this taxwise because I just do not understand the tax implications well enough to give sound advice.

    Edit: And something else you should consider is the Capital Gain you will have to pay on the sale of the property if you go through with it.

    Regards

    Itai
    If you need any Accounting, Tax or even Financial Management advice, PM me and I'll try help and keep your information confidential.

    Visit my Android ZA website - a website dedicated to Google Android in South Africa - www.androidza.co.za

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    Platinum Member sterne.law@gmail.com's Avatar
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    Yes, you sit in the situation where neither party has an outright right to sell.
    I come back to the testators intention - usufruct normally used to leave property to someone, but looking after another, such as a wife, by allowing them to stay there until death.
    Courts can overule a testementary clause in particualr regard to property, due to unforseen circumstances.
    I would think, based on current info at hand, that if you can provide the equivalent rental or cost of the frail care(rent portion), that you should be able to sell the house. you may need to lodge security, becuase shoudl you make the sale and then lose the money in some manner, the lady would be up the creek without a paddle. So it may need to be placed into a trust account or vehicle that is almost similiar to a usufruct in that n amount of money is placed in trust paying a monthly stipend to the lady, and on her demsie the balance would transfer to you.

    In terms of tax, in essence the transaction needs to occur at some stage, it may merely determine the timing of the transaction.
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    Hi All

    My name is Althea and found the link to the Forum by possing a question on google. So far so good enjoying reading the responses.

    My question around useufruct has been answered in the main thus far from previous post. If a spouse owns 50% of property by vertue of her marrage in community of poperty and the 50% was bequested to the husbands children. If she wants to rent the property must she obtain permission from the children to do so. Her need is to provide for frail care for herself.

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