I am going to present in the following lines some ideas about the right of residence, and because their inspiration is the result of real cases that have been happening to us in my Notary's Office, we will also highlight the importance of correct notarial advice, which it can only derive from the use of the right available to citizens to freely choose a notary.
I have to say that the very name of housing right generates a certain hilarity in all those people not accustomed to legal language and its mere pronunciation is the object of derision. In any case, we must say that it is a very interesting legal figure, as long as it is used correctly. I will treat the subject by comparing the common civil law with the Catalan law.
What is the right of habitation?
Article 524 CC points out that it is a right that grants its owner the power to occupy in someone else's house the necessary rooms for himself and his family members.
The article expresses itself in a very similar way. 562-9 of the Civil Code of Catalonia when telling us that the right of habitation entails the right to occupy the dependencies and annexes of a dwelling that are indicated in the title of constitution or, in the absence of this indication, those that are necessary to meet the housing needs of the owners and of the people who live with them, although their number increases after the constitution.
In essence, the right of habitation is the right to live in a house, enjoying it in whole or in part, in what is necessary for the needs of the holder of the right (inhabitant) and his family.
The consequences of the right of habitation can be agreed at the time of its constitution, for example the payment of the expenses of the community of owners, IBI, garbage and municipal taxes. But if nothing is agreed there is a small regulation of it, both in the Common Civil Code and in the Catalan one, declaring, both, supplementary the regulations of usufruct, because ultimately the right of habitation is a reduced usufruct.
The inalienable nature of the right of habitation.
The difference between the usufruct and the room derive from the fact that the usufructuary can use the house, for any purpose, so that he could inhabit it or rent it, while whoever has a right to room can only use it to live.
But perhaps the most fundamental difference stems from the fact that the right of habitation, unlike the right of usufruct, cannot be sold or transferred. It is an inalienable right and for this reason the right of habitation cannot be seized by debts of the habitant. In this sense, articles 525 CC, 562-4 CCCat and article 108 LH are manifested.
With these characteristics we can easily deduce that the scope of the right to housing is inheritance law, being a way of protecting and guaranteeing the housing need of certain people. The most paradigmatic case of the right to housing is the one established by the parents in favor of a child, whom they consider not particularly gifted to function through life without problems. With the right to a home, parents have the peace of mind, when they are gone, that their child will have a home and that no one will take it from them, no matter how many and different problems they get into.
Other purposes of the right of habitation:
Despite the fact that the right of habitation has as its own purpose the one that we have expressed in the previous lines, sometimes it is also used for other purposes.
Help for children to buy a home.
In this entrance In this blog we have referred to some problems that in other times, caused the right of usufruct, when the parents who helped their children to buy a home, wanted to guarantee themselves some type of decision-making power over it, and the advice that What was given to them, from many banking consultancies and even from legal professionals, was that they reserve a usufruct right. The consequence was that since there was a usufruct of the parents, like the children, who were the owners and real users of the house, they lacked a title to inhabit it, they could not deduct any amount for the acquisition of a house in their income statement. These consequences were saved if the right granted to the parents was for housing, since in front of the Treasury, the children already had a title to inhabit it. In other times, the execution of deeds for the conversion of usufruct rights into habitation rights, under the protection of the norm that allowed it, were quite frequent.
Another purpose of the right of habitation has been the protection of the habitual residence of people with business or debt risks. Parents, to avoid having their home repossessed, put it in the name of their children, and they reserved a right of habitation. In this way, the parents had a title to use the home, for life, and were safe from possible seizures of their business activity.
The traps of the right of habitation.
Like everything in life, nothing is perfect and the right to habitation can generate complications, when it has been used for purposes other than its most characteristic object, and that became evident in the era of the real estate bubble.
The tenant, who actually considered himself the owner of the farm, came a time when he wanted to sell or mortgage the farm. But how to sell something that per se is unavailable?.
The General Directorate of Registries and Notaries had to come out of this situation, which, faced with any refusal by a registrar to register a mortgage, when there was a right of habitation over the property, due to the unavailable nature of the right, established the doctrine that regardless of whether the right of habitation can be established as available, even if this had not been done, the unavailability was only due to the existing relationship between the user and the bare owner, but concurring the consent of both there is no problem for the sale or mortgage of the property. Resolutions of July 26, 2001, October 8, 2010 or December 10, 2015.
The right of Catalonia more adapted to reality, in its article 566-4 CCCat expressly provides that “those who have the right of habitation can only encumber or dispose of their right if the owners consent; and the foreclosure of a mortgage on the property (encumbered with habitation) entails the extinction of the right of habitation if its owners consented to its constitution (...) ".
In spite of everything, these ideas seem not to be fully established in all the areas where they should be, and with this I go on to relate the case of my friend Tomás, who was the holder of a right of habitation over his house, and who has sold a few days ago.
The legal advice of the Buyers' Bank, very attached to the unavailable nature of the right of habitation, required him to renounce his right to habitation in order to be able to sell, so that Tomás's children would later be the ones to sell the property. The consequence of this approach was that the waiver of the right to dwell, had a donation tax of 9,000 euros, while the joint disposition of the property by the dwelling owner and the owner, in favor of a third party, did not have any tax repercussion other than an ordinary sale. That is to say, that the payment of the 9000 euros was avoided.
Tomás was correctly advised, and he avoided a useless expense, being convinced that anyone else is forced to spend 9000 euros and without knowing it.