By Dr Carlos Bugeja - Partner
As with many terms at law, the average non-legal person will probably have a vague understanding of what usufruct is; after all the word is sufficiently descriptive of the principle itself. Legally speaking, usufruct is defined in the law (a. 328, Civil Code, Cap 16 of the Laws of Malta) as '... the real right to enjoy things of which another has the ownership, subject to the obligation of preserving their substance with regard both to matter and to form.'
And, as well as with many principles at law, the consequences of a legal term can be identified by breaking down the law into parts. First, usufruct is a right enjoyed by someone on something which belongs to another. It unites two rights into one: the right of usus and that of fructus. It is different from the institute of 'use' and very different from the right of habitation. Usufruct (użufrutt), the right to use (dritt ta' użu) and the right to habitation (dritt t'abitazzjoni) are three different, progressively more restrictive legal forms or rights on a property (moveable of immovable).
The obvious example of a field is the easiest model: A owns a field which is subject to a right of usufruct belonging to B. B does not only have the right to enjoy the field, but also has the right to take all kinds of fruits the field subject to his usufruct is capable of producing. This brings us to the second part of the right involved - that to gather fruits, which can be 'literal' fruits, or even other fruits (or profits), such as rent. So, going by the above example, if B has the right of usufruct on a field which has a tree that produces lemons, B can gather and take the lemons, notwithstanding the fact that neither the field nor the lemons belong to him.
The usufructuary may even assignment the enjoyment of his right to others, even for a fee. It must be said that this institute is an exception to the full right to property found in article 320 of the Civil Code, which grants the owner the right '...of enjoying and disposing of things in the most absolute manner, provided no use thereof is made which is prohibited by law'.
Under Roman Law, usufruct was a sort of personal servitude (servitutes personarum) a form of right or interest in someone else's property. The usufructuary never had possession of the property (as possession was tantamount to ownership) but held a right either for a number of years, or for one's lifetime.
Under Maltese law, unless a usufruct is created by law, when it refers to an immovable property, it has to be created by means of a public deed registered in the Public Registry, or through a last will and testament.
Usufruct is a very popular estate planning instrument in Malta. We see it creatively used in different forms, such as when a donor would gift a property to a family member, but retain the right to use it through his lifetime. We also see it used in wills, with the testator bequeathing a property he owns to his children, but grants his wife a lifetime right of usufruct, thus guaranteeing that the wife would have a place to live without any interference from the new owners. The possibilities are many.
The usufructuary's position is very strong at law - in many instance, he may institute the same actions in court as the owner can, and his rights are not easily terminated. The law states that usufruct terminates: (a) by the death of the usufructuary; (b) by the expiration of the time for which it was constituted; (c) by the merger or reunion in one and the same person of the two capacities of usufructuary and owner; (d) by non-user of the right during thirty years; (e) by the total loss of the subject of the usufruct (f) or by reason of the wrongful use which the usufructuary makes of his right, either by causing injury to the tenements, or by suffering them to run in to ruin for want of ordinary repairs.
The long thirty-years period in subsection (d) is very telling of the strength of the rights of the usufruct, a period which can be compared to that which may bring about the losing of one's right of ownership through someone's else acquisition through acquisitive prescription.
But the institute of usufruct is not void of rights and obligations; this will be the discussion in the article to follow.
Dr Carlos Bugeja is a Partner at PROLEGAL Advocates.
Disclaimer: This article is not to be construed as being legal advice, and is not to be acted on as such. Should you require further information or legal assistance, please do not hesitate to contact Dr Carlos Bugeja at firstname.lastname@example.org.