What are the rights of someone with a life interest on a property?

Inheritance Law

Antonio Flores Vila

9th of January 2001

Q. When our Mother died she left Spanish property to us (4 children) and a life interest in same to a man she married shortly beforehand. We have paid all taxes due and wealth tax but we have recently found out that the property is being let on occasion for holidays. We doubt that this income is being declared and also wonder as the owners if any income is derived from property who does it belong to. Also would this be a sufficient violation to overturn life interest. Obviously as we are not welcome to use property nor have any keys we appear only to be providing cheap accommodation and a income to the gentleman concerned. Any help or advice would be gratefully received and we could arrange a visit to a suitable lawyer if thought appropriate.

Anonymous

A. The Spanish Civil Code establishes that the beneficiary of the life interest has to right to enjoy the property object of the ´usufructo´ as long as he does not alter the configuration of the good. Applied to a property, this would mean that he may rent or use for himself the dwelling, and obtain the owenrship of any proceeds made. What he cannot do is sell it.

The income obtained by renting the property out is therefore the beneficiary´s, without the possibility of the owner to benefit from it. What you can do is sell the property, but obviously at a reduced price given the special circumstances of the case and going to specialised real estate agents who deals with these properties.

Please note that although it may be extremely annoying to have a person alien to your family living in that property, he is protected by the laws by virtue of his marriage to your mother, and the laws contemplate a number of rights. Upon death of the beneficiary, life interest and bare ownership will consolidate into ordinary ownership, recuperating therefore all the possibilities to enjoy that property.

With regards to the monies received by the beneficiary of the life interest, he is certainly obliged to declare them to the tax man. You are able to report the taxman if you deem appropriate, as you are entitled to.

Let us know if you need more help.

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