Yours & Mine
What is usufruct, and how does it affect you?
As with many other countries, South African property provides for the concept of usufruct: essentially, the right to use a property you don’t own.
Usufruct is often included in a will and allows the beneficiary long-term rights, making it different to a rental agreement. For instance, a man may choose to leave his property to his children in his will, but grant his wife usufruct so she can continue to live there until her death or remarriage. Importantly, the holder of a usufruct has full rights to use the property and to benefit from any profits it generates. He or she could live there or rent it out, but may not sell it, transfer it to someone else or change it.
There is the potential for tension between the usufruct holder and the owners of the property, so anyone considering this route should look at the relationship dynamics first. The holder of the usufruct is responsible for rates and taxes, and ensuring the property remains in good condition. But the owner(s) must cover major maintenance or repairs, as well as insurance.
Given these financial implications and the potential disagreements, it is worthwhile reaching an agreement beforehand regarding how these issues will be managed. The person creating the usufruct should also consider leaving enough money to the heirs and the holder of the usufruct to cover whatever needs may arise.