WHAT IS BARE PROPERTY AND THE REVERSE MORTGAGE?
Purchase of Bare property in Valencia
The purchase of bare property in Valencia has increased the interest of both, buyers and sellers, as it is a very interesting alternative that can bring great advantages. We are going to explain what bare ownership is all about, we will analyze the reverse mortgage and we will also study the different possibilities and benefits that this system will offer us.
What is bare property and reverse mortgage
The first and most important thing is to start by defining the concept of bare property and reverse mortgage, from which we can better understand how this system works.
Ownership and usufruct of a home
We begin by differentiating between home ownership and usufruct, since they are concepts that it is important to be clear about in order to understand what is the purchase of bare property in Valencia and what is a reverse mortgage.
- Ownership: Indicates who is the person who owns a certain asset. This is defined as owner.
- Usufruct: usufruct is the right to use and enjoy a person over a good that does not belong to him. This is defined as usufructuary.
Breaking down the word “usufruct” we can divide it into two parts that are:
- Usus: refers to the right to use a property.
- Fructus: refers to the benefits that can be obtained from the property.
What is the naked property in an inheritance
Bare ownership is a right that exists over a certain thing, but with the particularity that you are only the owner of it, but you cannot use it.
In this way, one person will be the owner of the property, while a third person will be the one who will maintain the usufruct, that is, the use and enjoyment of it.
An example of this would be the rental of housing, so that the owner is a different person from the one who is using the property.
When talking about bare ownership in an inheritance, it means that the house becomes the property of a third party (for example a son), while the former owner (for example the father) will continue to use it until his death, that is, even if the property has changed ownership, the former owner will continue to be the usufructuary.
The reverse mortgage or how to purchase bare property with life usufruct
On the other hand we have the concept of reverse mortgage, which is also known as reverse mortgage or reverse mortgage.
The reverse mortgage consists of the sale of a home to a third party, but without the former owner losing the ownership rights, that is, he will continue to retain the usufruct, which means that the bare owner will not be able to do anything with the home until the usufructuary loses his rights.
In the case of life usufruct, it means that the usufruct will be maintained until the date of death of this person.
Once he has died, the owner will be the exclusive owner of the property and the one who will have the usufruct.
It is important to bear in mind that in Spain, the reverse mortgage is regulated by Law 41/2007, of December 7, on the Regulation of the Mortgage Market.
In this way, those interested will be able to access all the information and advice they need to have the total guarantee of knowing what their rights are in terms of a reverse mortgage.
For this, it is very important not to carry out these deals between individuals, but it is necessary to obtain complete advice through a specialized company that works directly for private clients.
It is important to bear in mind that this type of agreement must be managed with the maximum guarantees for both the buyer and the usufructuary, with which it is not advisable to launch without knowledge about the subject, since this may mean that, when the time comes, There are some obstacles when it comes to obtaining the usufruct of the home, such as the fact that the children may have the right to recover the home if they return all the money contributed at the time the parents die.
Summary of concepts
To facilitate the understanding of the terms related to the sale of bare property in Valencia, we proceed to summarize the three main entities that must be distinguished:
- Owner: is the person who owns a certain asset, in this case, a home. You have full ownership of said property.
- Owner node: is the person who has acquired ownership of a home, but does not enjoy its usufruct, that is, does not have the right to use and enjoy it. This means that you do not have full ownership of the home despite being your property.
- Usufructuary: person who, without being the owner of the home, has the use and enjoyment of it.
- Bare ownership: is how the property whose owner and usufructuary are different people is known.
Bare ownership and usufruct
In bare ownership, there may be one or more usufructuaries.
An example of this is when a married couple agrees that, in the event of the death of one of them, the house becomes the property of the children, but with the particularity that the usufruct will continue to be maintained by the member who is still alive, who will hold until his death.
Similarly, another example would be a couple that decides to resort to a reverse mortgage, so that they proceed to sell their home but with the particularity of maintaining lifelong usufruct, that is, they will be able to continue using the home until their death.
In this case, at the time of signing the reverse mortgage in Valencia, as both owners are alive, a lifetime usufruct will be established for the marriage, that is, in such a way that both must have died so that the bare owner can make use of it. of the house.
Reasons for termination of usufruct
However, in addition to the lifetime usufruct, different options for termination of the usufruct can also be agreed upon, such as the following:
- Death of the usufructuary: the first and most common of the terminations of the usufruct is when the usufructuary dies, as long as it is a lifetime usufruct agreement. It is important to bear in mind that in these cases, as we mentioned before, the bare owner will not have the usufruct of the home until all the usufructuaries have died, be it, for example, a married couple, or even several members who have been appointed at the time of the agreement.
- End of the term: on the other hand, there is also the possibility of opting for a limited usufruct based on a certain term. In this case, the bare owner will not have the usufruct of the property until the term has ended. However, in the agreement it can be accepted that, in the event that the usufructuary dies before the end of the term, the property will pass to the bare owner.
- Compliance with the subsequent condition: finally, in the event that a condition has been established for the bare owner to acquire full ownership of the property, this will occur when it is fulfilled. In other words, for example, it can be established that the bare owner will acquire full ownership of the home when he marries, in which case, until he does so, he will continue to be a bare owner without full rights over this home.
Rights and obligations of the bare owner
As has been observed, the bare owner has very limited faculties with respect to property, but it is important to fully understand all the rights and obligations that correspond to him.
Rights of the owner node in Valencia
We are going to start by listing the rights of the owner node in Valencia, highlighting the most important ones:
- Ownership right: even if the bare owner does not have the use and enjoyment of the home, he will continue to be the owner of the property.
- Right of sale: based on article 489 of the Civil Code, the bare owner will have the right to sell the property to a third party, as long as the rights of the usufructuary are respected.
- Mortgage right: based on article 107.2 of the Mortgage Law, the bare owner may also mortgage the bare property.
- Right of works: based on article 503 of the Civil Code, the bare owner may carry out the works and improvements that are necessary in the property, as long as it does not cause damage to the usufructuary.
- Right of recovery of use and enjoyment: based on article 522 of the Civil Code, once the usufruct ends for the different reasons indicated above, the bare owner will have the right to receive full ownership of the property, including the usufruct.
Obligations of the owner node in Valencia
However, it is also very important to consider what the obligations of the node owner in Valencia are:
- Obligation of works: based on article 501 of the Civil Code, the bare owner will have the obligation to take charge of the extraordinary repairs that are necessary. In case of refusing to do so, the usufructuary may carry them out, subsequently passing the charge to the bare owner.
- Obligation to respect the rights of the usufructuary: Article 489 of the Civil Code indicates that the bare owner may not alter the usufruct property or perform any act that may harm any of the rights of the usufructuary.
- Obligation to pay taxes and taxes: based on article 505 of the Civil Code, the bare owner will be obliged to pay both special and extraordinary contributions that are related to the usufruct of the home. However, the Real Estate Tax (IBI) will be borne by the usufructuary
- Obligation to pay the mortgage: based on article 509.1 of the Civil Code, if in the event that at the time the usufruct is constituted there is a mortgage on the property, the bare owner will be in charge of paying the installments that correspond
- Obligation to respond to the usufructuary: Article 509.2 of the Civil Code indicates that the bare owner must respond to the usufructuary in the event that there is an embargo or judicial sale in order to satisfy outstanding debts.
- Obligation to meet the expenses of the community: based on article 9.5 of the Horizontal Property Law, the payment of the expenses of the community corresponds to the owner of the property and not to the usufructuaries, which means that it will be the bare owner who will have to be responsible for the payment to the Community of Owners.
Sale of bare property in Valencia
It must be taken into account that the sale of bare property in Valencia is becoming one of the most requested resources by those who want to get a home at a good price, and by those who want to guarantee their last years of life with a good level.
In this way, the owner of a home who uses a reverse mortgage in Valencia, puts his property up for sale with the aim of finding another person or persons who may be interested in it.
The price in these cases will be adjusted because there is a lifetime usufruct, that is, the person who buys will not be able to dispose of the home for the time being.
In essence, both parties are going to benefit when it comes to taking advantage of the home.
Purchase bare property with lifetime usufruct and purchase bare property Valencia
Given the increase in interest in selling bare property with lifetime usufruct in Valencia, it is very important that both the future bare owner and the usufructuary agree and carry out the procedures through a company with experience in bare property and reverse mortgage.
In this way, both will ensure that their rights and obligations are being fulfilled at all times, thus ensuring that there is no pending aspect that could harm either party in the future.
This guarantees maximum peace of mind when carrying out the process, as well as the security of knowing that everything will be carried out in accordance with the law and the rights of each of the parties, in addition to the fact that all doubts will be clarified before proceeding. out the process so that each one can make a determination based on their personal interests.
EXCLUSIVE TO PRIVATE OWNERSNO ESTATE AGENCIES PLEASE