Buying French Property with Split Ownership: What Bare Owners and Life Interest Holders Each Get

First: Split Ownership Is Not Co-Ownership

The most persistent misunderstanding about French split ownership is that it resembles joint ownership (indivision). It does not. In indivision, multiple owners hold concurrent rights of the same nature on the same asset — each is a co-owner with a proportionate share. The rights of the usufruitier and the nu-propriétaire are fundamentally different in nature. There is no undivided share between them. Neither can demand that the property be divided or sold to break the arrangement — a court cannot order a sale of the full property against the usufruitier's wishes (C. civ. Art. 815-5 al. 2), nor can the nu-propriétaire sell the full property without the usufruitier's agreement.

Each party can only deal with their own right. The usufruitier can sell or give their usufruit (though it remains limited to their own lifetime). The nu-propriétaire can sell or mortgage the nue-propriété. Neither can deal with the full property alone. This independence shapes everything — leases, votes, repairs, and sales — that follows.

Signing Leases: Who Has the Power?

The usufruitier is the party with the right to use the property and collect its revenues. They are therefore the natural party to conclude a lease — but their authority varies significantly depending on the type of lease.

Residential and Professional Use Leases (Up to Nine Years)

The usufruitier can sign residential or professional leases alone, without the nu-propriétaire's agreement (C. civ. Art. 595). This covers the standard French residential tenancy (bail d'habitation) and office leases. The usufruitier acts as landlord, serves notice, renews, and takes legal action against the tenant — all without involving the nu-propriétaire. They have sole standing to serve the congé and to have it validated in court; when a congé pour reprise is served, it is the usufruitier's family connections that determine whether the reprise conditions are met (Cass. 3ème civ. 26-1-2022 n° 20-20.223 FS-B).

The nine-year limit matters for the tenant's protection. If the usufruitier signs a lease for longer than nine years without the nu-propriétaire's agreement, the excess duration is not binding on the future full owner when the usufruit ends. The new owner is only bound for the completion of the current nine-year period in which the end of the usufruit falls. Any tenant taking a long lease should ensure the nu-propriétaire joins the deed, or face this risk.

Commercial, Rural, Industrial, and Artisanal Leases

These are more consequential leases — they confer on tenants statutory renewal rights and, in commercial leases, the right to claim an eviction indemnity. The usufruitier must obtain the nu-propriétaire's agreement to conclude or renew them (C. civ. Art. 595 al. 4). If the usufruitier acts alone, the lease is null — but this is a relative nullity that only the nu-propriétaire can invoke, within five years of learning of the lease's existence (Cass. 3ème civ. 14-11-2007 n° 06-17.412). This right to challenge the lease survives the reconstitution of full ownership (Cass. 3ème civ. 9-12-2009 n° 08-20.133).

The renewal asymmetry is important: the usufruitier cannot accept renewal of a commercial lease without the nu-propriétaire's agreement, but can refuse renewal alone — serving notice with an eviction indemnity at their own cost. If the nu-propriétaire joins in a refusal of renewal, this does not make them jointly liable for the eviction indemnity — the indemnity remains the usufruitier's obligation alone as the sole bailleur (Cass. 3ème civ. 19-12-2019 n° 18-26.162 FS-PBI). Where the nu-propriétaire refuses to give agreement without justified reason, the usufruitier can apply to court to be authorised to conclude the lease despite the refusal (C. civ. Art. 595 al. 4).

Conventional Adjustments

The default legal rules can be modified by agreement — either in the constitutive deed of the démembrement or subsequently by mandate. The deed may require the usufruitier to obtain the nu-propriétaire's consent even for residential leases. Conversely, the parties may agree to give the usufruitier sole authority to conclude commercial leases, removing the consent requirement entirely (C. civ. Art. 595 as modified by convention).

Co-ownership Assemblies: Who Votes?

When a démembrement affects an apartment or a lot in a French copropriété (condominium), the law of 10 July 1965 creates a specific rule: the usufruitier and nu-propriétaire must be represented at general assemblies by a single mandataire commun — one representative for both of them (Loi 65-557 Art. 23; Décret 67-223 Art. 61).

If they agree on a mandataire commun, that person attends and votes for both. If they do not agree, the default rule applies: the nu-propriétaire represents the usufruitier at assemblies — not the other way around. In practice this means that when a co-ownership assembly votes on matters that directly affect the usufruitier's use and enjoyment, the nu-propriétaire still holds the vote. Where there are multiple nus-propriétaires who cannot agree on who should represent them, a court can designate the mandataire commun.

Charges in the copropriété are allocated internally between usufruitier and nu-propriétaire in accordance with the Civil Code rules — but the copropriété itself can insert a solidarity clause in its règlement de copropriété making both jointly and severally liable to the syndicat des copropriétaires, regardless of the internal allocation (Cass. 3ème civ. 14-4-2016 n° 15-12.545).

Charges and Repairs: The Most Litigated Boundary

The Civil Code's allocation of costs between the two rights holders has not changed since 1804. Article 605 makes the usufruitier responsible for maintenance and upkeep. Article 606 reserves major structural works (grosses réparations) for the nu-propriétaire. The 2005 Cour de cassation decision modernised this definition: grosses réparations are those "affecting the building in its structure and general solidity"; maintenance and upkeep works are those "useful for permanently maintaining the building in good condition" (Cass. 3ème civ. 13-7-2005 n° 04-13.764).

What the Usufruitier Pays

The usufruitier pays: all routine maintenance and upkeep — decoration, plumbing repairs, heating system servicing, cleaning, minor repairs; the taxe foncière and other property taxes treated as charges on the revenues (C. civ. Art. 608); co-ownership charges for running costs; insurance premiums; and — critically — if the property is let, all repairs that the law requires a landlord to make toward their tenant, including repairs that would otherwise be classified as grosses réparations. The landlord's obligation to tenants is not modulated by the internal division between usufruitier and nu-propriétaire.

What the Nu-Propriétaire Pays (in Principle)

The nu-propriétaire bears major structural works. But the legal rule has a critical limitation: the nu-propriétaire is not obliged to carry out grosses réparations, and the usufruitier has no mechanism to compel them (Cass. 3ème civ. 28-11-2006 n° 05-15.750; Cass. 1ère civ. 28-10-2009 n° 07-12.488; Cass. 1ère civ. 18-12-2013 n° 12-18.537). The usufruit imposes no positive obligation on the nu-propriétaire. The nu-propriétaire cannot be forced to fund a new roof.

If the nu-propriétaire fails to act and the usufruitier pays for major works themselves, the usufruitier can seek reimbursement from the nu-propriétaire on the basis of unjust enrichment. But this reimbursement is only payable at the end of the usufruit, and is calculated not on the cost of the works but on the increase in the property's value that still exists at that point.

Conventional Adjustments to the Default Allocation

The statutory division is not mandatory. The parties can agree, in the deed, to allocate all repairs to the usufruitier, or to require the nu-propriétaire to fund specified categories of work. A clause requiring the nu-propriétaire to carry out necessary major works has been upheld by the courts — provided it clearly imposes an obligation to fund the works and specifies the consequences of non-compliance (Cass. 1ère civ. 23-1-2007 n° 06-16.062).

Selling the Property During the Usufruit

Neither Party Can Sell the Whole Property Alone

As neither the usufruitier nor the nu-propriétaire can force a sale of the full property, any sale requires both parties' agreement. This is one of the most practical constraints of démembrement: a family where the surviving parent holds the usufruit and the children hold the nue-propriété cannot sell the family home without everyone agreeing — and agreeing on the price allocation as well.

How the Sale Price Is Divided

When the property is sold jointly, the price is allocated between the usufruit and the nue-propriété in proportion to the value of each right, calculated using the mandatory barème of Article 669 CGI based on the usufruitier's age at the date of sale (C. civ. Art. 621 al. 1). This is the default rule — it applies if the parties have not agreed otherwise.

Alternatives to Price Splitting: Report of the Démembrement

Instead of splitting the sale price, the parties can agree to carry the démembrement forward onto new assets purchased with the proceeds. This is particularly useful where the sale is motivated by a desire to change property rather than to cash out. Alternatively, the parties can agree to give the usufruitier a quasi-usufruit over the proceeds — the full amount is paid to the usufruitier, who holds it subject to a debt of restitution to the nus-propriétaires, deductible from their estate.

Income Tax When the Property Is Let

When a démembered property is rented to a third party, the income tax treatment follows the ownership of the fruits — all rental income belongs to the usufruitier, and the tax liability falls entirely on them.

The Usufruitier's Position

The usufruitier declares all rental income received as revenus fonciers under the general rules applicable to property owners (CGI Art. 28). They can deduct against those revenues all charges actually incurred — including maintenance, repairs, and even costs that would normally fall to the nu-propriétaire under the civil law division. Foncier deficits are imputable against the usufruitier's global income up to €10,700 per year, with the excess carried forward ten years against future foncier income. Note that if the property is let furnished rather than bare, the revenues are classified as bénéfices industriels et commerciaux, not revenus fonciers.

The Nu-Propriétaire's Position

The nu-propriétaire receives no rental income and has nothing to declare from the property. However, where the property is generating revenus fonciers taxable in the usufruitier's hands, the nu-propriétaire can deduct against their other foncier income the costs they have actually paid on the démembered property — including maintenance costs that legally fall to the usufruitier but were paid by the nu-propriétaire, and interest on loans contracted to acquire the nue-propriété or to fund works (CGI; CE 21-2-1979 n° 4896). This creates a useful planning opportunity for a nu-propriétaire who has other rental income against which to offset these deductions.

Social Housing Investment Structures

The acquisition of nue-propriété on new social housing where the usufruit is held by a social landlord (bailleur social) for 15–20 years is a recognised investment structure in France. The private investor pays a discounted price for the nue-propriété — typically 35–40% below full market value — and bears none of the management risk, maintenance cost, or letting risk. Tax advantages include: no taxe foncière or IFI during the usufruit; the ability to deduct loan interest against foncier income; and the capital gains treatment on a later sale runs from the original acquisition date of the nue-propriété.

When the Usufruitier Occupies the Property for Free

The most common situation in family démembrements — a parent who has given the nue-propriété to their children while retaining the usufruit, and who continues to live in the property — raises specific tax questions for both parties.

The Usufruitier

The usufruitier who occupies their own property as a primary or secondary residence is treated exactly like any full owner occupying their own home. The free use of a dwelling is exempt from income tax under Article 15 II of the General Tax Code. No deemed rental income is attributed. The consequence, however, is that the usufruitier cannot deduct any foncier charges against the property — no repairs, no interest on loans, no property taxes — as there is no rental income to offset them against (CGI Art. 15 II).

The Nu-Propriétaire

Where the usufruitier occupies the property for free, the nu-propriétaire cannot deduct any foncier charges either. The property is not let; it generates no foncier income; there is nothing to offset costs against. This applies even if the nu-propriétaire has incurred real costs — loan interest, major repairs they funded voluntarily. No deduction is permitted as long as the property is occupied free of charge by the usufruitier and is not generating taxable foncier income (CE 19-2-1986 n° 42027).

This article is provided for general information and educational purposes only. It does not constitute legal or tax advice. The allocation of powers, costs, and tax consequences between an usufruitier and nu-propriétaire depends heavily on the specific terms of the constitutive deed, the type of property, and the applicable contractual arrangements. Always seek advice from a qualified French notary or lawyer before entering into or modifying a démembrement arrangement.