Bare Ownership: Can the Sale Escape the SAFER Right of Pre-Emption?

Imagine: you are the owner of agricultural land in Le Cannet, and you wish to sell it. But the SAFER (Société d'Aménagement Foncier et d'Établissement Rural) can, in certain cases, interfere with your sale by exercising a right of pre-emption (priority to buy in your place). Does this worry you? A question nags at you: can I sell only the bare ownership (the right to dispose of the property, without the use) and keep the usufruct (the right to use the property) to escape this right? Or vice versa?

This decision of the Court of Cassation of 6 February 1974 answers this question precisely. It ruled: the right of pre-emption of the SAFER, designed to rebalance agricultural holdings and combat speculation, cannot be exercised on the sale of bare ownership alone. Unless this sale is fraudulent, i.e., intended to circumvent the law. A relief for many, but beware of overly clever schemes.

So, how to distinguish a legitimate sale from a fraud? What are the risks if you separate bare ownership from usufruct? Let us dive into this case which, although fifty years old, remains relevant for any landowner in the jurisdiction of Grasse or elsewhere.

The facts: a story like many happening every day

In 1967, an owner, whom we shall call Mr X, owns an agricultural estate in Grasse. He wishes to sell it, but the local SAFER expresses interest. Rather than selling the full ownership (bare ownership + usufruct) in one block, Mr X decides to proceed in two stages: he first sells the bare ownership to a company, the Société des Gravettes, and undertakes by a separate deed to later transfer the usufruct to the SAFER, if it exercises its right of pre-emption on the bare ownership.

The SAFER, smelling a stratagem, sues Mr X. It considers that this two-stage sale is a fraud to deprive it of its right of pre-emption on the full ownership. The lower courts (Tribunal de grande instance of Grasse, then Cour d'appel of Aix-en-Provence) rule in favour of the SAFER and annul the sale of bare ownership.

Mr X appeals to the Court of Cassation. His argument: the SAFER does not have the right to pre-empt bare ownership alone, because its right only applies to full ownership or to usufruct? The Court of Cassation quashes the appeal judgment and remands the case. For it, the sale of bare ownership does not trigger the SAFER's right of pre-emption, unless it is fraudulent. However, in this case, fraud was not established: Mr X had not sought to conceal the sale of the usufruct to the SAFER, but on the contrary had promised it in advance.

The reasoning of the court — analysed

The Court of Cassation relies on Article 1 of the Ordinance of 5 August 1960 (now Article L. 143-1 of the Rural Code). This text gives the SAFER a right of pre-emption to "achieve a balance of agricultural holdings, contribute to the creation of new balanced holdings and avoid land speculation". But this right, says the Court, cannot be exercised "in connection with the sale of the bare ownership of rural property".

Why? Because bare ownership alone does not confer the use of the property. The purchaser can neither cultivate, nor inhabit, nor receive the fruits (rents, harvests). However, the objectives of the SAFER — rebalancing holdings, fighting speculation — presuppose that the purchaser has effective control of the property. Buying bare ownership without the usufruct does not serve these purposes. Therefore, the SAFER cannot oppose it, unless the separation of the two rights is an artifice to circumvent the law.

The Court specifies: "except in cases of fraud". If the seller and the purchaser of bare ownership agree that the usufruct will later be transferred to the SAFER, or if the scheme aims to conceal a sale of full ownership, then the SAFER can act. But in the absence of fraud, the sale of bare ownership is free. This is a confirmation of contractual freedom: everyone can sell a dismembered right (separated into bare ownership and usufruct) without fearing the SAFER.

The SAFER's arguments — that the two-stage sale was a manoeuvre — were rejected because the seller had promised the usufruct to the SAFER itself, which demonstrated his good faith. The lower courts had seen fraud where the Court of Cassation does not.

What this changes for you — concretely

If you are the owner of agricultural land in Grasse, Le Cannet, or elsewhere, this decision gives you a card: you can sell the bare ownership without the SAFER intervening. Concretely, if you want to retain the use of your land (for example, to live there or cultivate it) while transferring ownership to your children or an investor, you can do so. The SAFER will not be able to pre-empt this sale.

But beware: if you sell the bare ownership to a third party, and you undertake to transfer the usufruct to them later (or if the purchaser is already the usufructuary), the SAFER might consider this a disguised sale of full ownership. For example, if you sell the bare ownership to a farmer who is already a tenant (and therefore a de facto usufructuary), the SAFER could challenge it. The risk is real: annulment of the sale, damages.

For a purchaser, this is an opportunity: you can buy the bare ownership of agricultural property without the SAFER beating you to it. But check that the seller does not retain the usufruct for an excessive period (more than 20 years, for example): this could be reclassified as a sale of full ownership if the judges consider the usufruct to be illusory. A numerical example: in Grasse, a 5-hectare plot is worth €200,000 in full ownership. Bare ownership alone (with usufruct retained for 15 years) might be valued at €140,000. Without this case law, the SAFER could have pre-empted at €200,000. With it, you can buy at €140,000.

If you are a property professional, you must advise your clients on the risk of fraud. A two-stage scheme must be transparent and justified by a legitimate interest (for example, the seller wants to continue living on the property). Otherwise, the SAFER might attack.

Four tips to avoid this type of dispute

• Do not separate bare ownership and usufruct if you want to sell full ownership. If your real intention is to sell everything, do it in a single deed. The SAFER can then pre-empt, but you will be in compliance. Otherwise, you risk an action for fraud.
• If you sell bare ownership alone, have your intention to retain the usufruct recorded. For example, insert a clause in the deed of sale stating that you retain the use of the property for a fixed period (10 years, for life, etc.). This removes any idea of fraud.
• Avoid promising the sale of the usufruct in advance. In the 1974 case, the seller had promised the usufruct to the SAFER itself, which saved the sale. But if you promise it to the purchaser of bare ownership, the judges might see fraud. It is better to sell the usufruct to an independent third party.
• Consult a lawyer before signing. A dismembered scheme is complex. A specialist property lawyer, like me, can analyse your situation and draft the deeds to withstand any challenge from the SAFER. The cost of a consultation is negligible compared to an annulment of the sale.

Further reading: related case law and developments

This 1974 decision has since been confirmed. The Court of Cassation notably ruled, in a judgment of 13 June 1995 (No. 93-16.123), that the sale of bare ownership of rural property escapes the SAFER right of pre-emption, unless the sale is fraudulent. It specified that fraud requires an intention to circumvent the law, not mere inconvenience to the SAFER.

On the other hand, the sale of usufruct alone (without bare ownership) can be pre-empted by the SAFER, because usufruct confers the use and fruits of the property, which corresponds to the SAFER's objectives. Thus, if you sell only the usufruct to a farmer, the SAFER can oppose it by exercising its right of pre-emption.

The tendency of the courts is to protect contractual freedom but to severely sanction fraudulent schemes. Since 1974, judges have become more demanding on proof of fraud: it must be shown that there was a deliberate intention to harm the SAFER. This means that if you have a legitimate reason to separate the rights (for example, a succession dismemberment), you are safe.

Checklist before acting

• What can the SAFER pre-empt? Full ownership and usufruct alone. Not bare ownership alone (except fraud).
• What if I want to sell my bare ownership? Ensure you retain the usufruct for a significant period (at least 10 years). Avoid any link between the purchaser of bare ownership and the future usufruct.
• Can I sell the usufruct to a third party? Yes, but the SAFER can pre-empt that sale. If you want to avoid this, sell the usufruct to a family member (spouse, child): the right of pre-emption does not apply in the case of a sale to a relative up to the 3rd degree.
• What are the risks in case of fraud? The sale can be annulled, and you may be ordered to pay damages to the SAFER. Additionally, the SAFER may exercise its right of pre-emption on the reconstituted full ownership.

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) may save you months of litigation — and often much more. Book an appointment →