Rights of use - when you own something but your power of disposal is limited
What is a right of use? - The definition
that right of use allows a person to use a thing or property without being its owner. In the real estate world, there are both contractual and tangible rights of use. Contractual rights of use usually arise through rental or lease agreements, while rights of use in rem such as Right of residence and Right of use (also usufruct law) must be entered in the land register so that they are legally protected.
Differences: right of residence, right of use and simple right of use
Right of residence
The right of residence allows a person to live in a property without owning it. It is often used in old age when owners sell or give away their house but want to continue living in it. Residents cannot rent out the property and must pay for operating costs such as heating and ancillary costs themselves. This right is entered in the land register as a limited, personal easement and usually ends with the death of the person entitled to it. The right of residence is not inheritable.
Right of use (usufruct right)
The right of use allows more intensive use than simple right of residence. Beneficiaries may rent out the property or earn income from it. Usually, the eligible person pays maintenance costs, ancillary costs and pro rata taxes. This right is also entered in the land register and can exist for up to 100 years. It expires upon the death of the beneficiary and is also not inheritable.
Simple right of use
The simple right of use, often regulated by rental agreements, includes the right to use a property or space. This right expires upon termination of the rental agreement and typically does not include permission to sublet or commercial use without additional agreements. Certain road or driving rights over a neighboring property are also simple rights of use and are often secured in rem.
Influence of usage rights on real estate value
Rights of use, such as residential or beneficiary rights, significantly influence the market value of a property. Since they restrict the usability and alienability of the property, the value of a property can fall, but this can also have advantages. For example, a registered right of use reduces the tax-relevant gift value, which is often desired in the case of transfers within the family.
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