Bare ownership: what it is and how it works

When you decide to buy a house, it may happen that in searching for the perfect advert you come across the wording “bare ownership“, associated with a property for sale, often characterized by a market price lower than the average selling price of other properties of the same kind.

In this period, characterized by a major economic crisis, buying a house is certainly not easy. However, the real estate market offers valid alternatives even for buyers who find themselves in a complicated economic phase. In fact, bare ownership represents one of these alternatives, and is an advantageous type of sale for both those who sell and those who buy.

In this article we see what bare ownership is, how it works and what the main advantages are.

Bare ownership: what is it and how does it work?

The term “bare ownership” refers to the value of a property reduced by usufruct. This means that when the owner of the property sells the bare ownership, he puts the property on the market but retains the right to live in the house or to “enjoy the fruits” (even to rent it) and continue to use the property for the entire life or until a certain deadline, indicated in the sales contract.

There are two subjects involved in this type of property:

• Usufructuary: former owner of the property, who has sold the ownership right but retains the right of usufruct.
• Bare owner: new owner of the property who acquires ownership of the property but no right to physically use it. He will obtain full enjoyment of the asset upon termination of the right of usufruct, i.e. upon the death of the usufructuary or upon the term established in the purchase and sale contract.

The usufructuary can decide either to rent the house or to sell the usufruct to third parties, always respecting the conditions and terms set out in the contract. Thus, even the bare owner can decide to transfer bare ownership of the purchased house to a third party.

Generally the role of usufructuary is held by elderly people without heirs who wish to receive liquidity from the sale of the apartment, without giving up living in their own home. While, usually, those who choose to purchase a property with bare ownership intend to offer a future housing solution to their child.