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What is freehold?

Everything you need to know about the sale of bare ownership

Acceptance of the contract with the real estate agency: Key points, requirements, and benefits. Two people are seen shaking hands.

In order to understand the concept of bare ownership we must first understand what it means to have the freehold or full ownership of an asset (in this case, the asset would be a house).

The freehold is made up of two concepts or possibilities:

Table of Content

Freehold
Usufruct
Rights of the bare owner

Freehold

The right of a person (hereinafter bare ownership) to own an asset, but without being able to enjoy or make use of it.

Usufruct

The right of a person to use and enjoy a property that he or she does not own.

Generally, when you buy a home, you usually acquire full ownership of it and do not distinguish between these two concepts. However, it is possible to sell only the freehold of your home and continue to use it. This sale of ownership, but not of the usufruct is called sale of bare ownership.

It is increasingly common for the owners of a property to sell the bare property and reserve the usufruct (use and enjoyment).

This is usually the case for elderly people who have no heirs or who need financial resources. Therefore, the person who has the bare ownership of the house will be able to live in the house as soon as the the usufructuaries contract ends, but never before.

Rights of the bare owner

The rights of the bare owner on the property are as follows:

Sale of the bare ownership to a third party (he/she can never rent the property, this right corresponds to the usufructuary).
To do works and improvements in the property as long as they are not detrimental to the usufructuary.
Other aspects agreed with the former owners of the property.

The sale of bare ownership depending on the area in which the property is located, it implies, a price reduction compared to a property that is sold freehold. It is ideal for people who wish to buy a property and own it, but do not want to move into the property immediately.

From Engel & Völkers La Moraleja - Mirasierra/Puerta de Hierro we also have freehold properties, do not hesitate to contact us for more information!