Today a client asked me an interesting question regarding the difference between a usufruct and a habitatio right that can be granted over a property when it is sold.
In this example the seller would like to keep usage of one of the three garages situated on the property for a home fruit bottling and canning business. She would like to register a right of usage over this part of the property.
South African Common Law recognizes three similar but different legal concepts that can be used for this purpose.
This grants the holder the right to use and derive profit from a property belonging to someone else. This may include the right to receive rental income including, for example, income from farming activities. The property may not be sold, altered or destroyed and it must eventually be returned to the owner. In the case of a deceased estate, this will be the person to whom the property was bequeathed.
In the case of a usufruct right, the holder will be liable for the maintenance costs of the property over which the right has been granted including a proportional share of the rates and taxes. Costs relating to the normal deterioration of the property would be excluded.
Usus (right of use):
This right entitles the user to occupy a property with spouse, family and guests, and the holder may let out a part of the property. However, the holder of the right may not alienate the property or cede the right to use it to another person.
There rests a lesser obligation on the holder of usus for the running expenses of the property.
Habitatio (living rights):
This grants the holder the right to live in a property. The holder may cede the right to use the property to another party and may also rent the property out.
As in the case of a usus right, there rests a lesser obligation on the holder of a habitatio right for the running expenses of the property.
These three legal concepts are very similar and easily confused. Choosing the right one for your situation will depend on the specific needs of the grantor and the grantee of the usage right. Therefore it is important to get proper legal advice when drawing up an Offer to Purchase or any other legal document where one of these legal concepts will be used.