Bare ownership and usufruct: the hidden sale that traps SAFER

Imagine: you own a beautiful villa with vineyards in Villefranche-sur-Mer, and you want to sell. You are the full owner, but your neighbour, on the other hand, has split his property: he gave the bare ownership to his children, while retaining the usufruct. Together, they decide to sell to the same buyer. Can SAFER (Société d'Aménagement Foncier et d'Établissement Rural) pre-empt? The question every owner asks: can the right of pre-emption be circumvented by selling separate split rights? The Court of Cassation answers clearly: no. Analysis.

The facts: a story that happens every day

The G. family are owners of a rural property located in an area where SAFER has a right of pre-emption (priority right to buy agricultural land in order to redistribute it to farmers). Wishing to sell their property, they decide to proceed with a simultaneous sale of the bare ownership (the right to dispose of the property, but without enjoying it) and the usufruct (the right to use the property and receive its fruits). In appearance, these are two separate transfers. But SAFER considers that it is in reality a sale of full ownership, and exercises its right of pre-emption. The G. family contest this pre-emption before the courts, arguing that the sale of split rights does not fall within the scope of pre-emption. The Court of Appeal rules against them, and the case goes up to the Court of Cassation.

The reasoning of the court — dissected

The Court of Cassation, in its judgment of 15 December 2016, dismisses the appeal of the G. family. It relies on Article L. 143-1 of the Rural and Maritime Fishing Code, which defines the scope of SAFER's right of pre-emption. This article provides that SAFER may pre-empt any sale of agricultural land or land with an agricultural vocation. But what happens when the sale relates not to full ownership, but to split rights? The Court considers that when the sale relates simultaneously to the bare ownership and the usufruct of the same property, and the purchaser is the same, it is in reality a sale of full ownership. It does not matter that the sellers are different (the bare owner and the usufructuary). What matters is that the purchaser combines the two rights, thus becoming the full owner. The Court specifies that it is not necessary to establish fraud (deliberate circumvention of the law): the mere fact that the sale is simultaneous is sufficient to subject it to the right of pre-emption. In other words, the judges look at the economic reality of the transaction rather than its legal form.

What this means for you — practically

This decision has important practical implications for owners, purchasers and real estate professionals. If you are the owner of a rural property and you are considering selling it by splitting the ownership, be aware that if you sell the bare ownership and the usufruct to the same person at the same time, SAFER may pre-empt. Concrete example: in Villefranche-sur-Mer, an owner wants to sell his agricultural land to a developer. To avoid pre-emption, he sells the bare ownership to his son and the usufruct to the developer. But if the son immediately resells the bare ownership to the developer, or if the two sales are concurrent, SAFER may pre-empt. undefined, I have come across cases where owners attempted this arrangement, thinking they could escape pre-emption. But the case law is clear: SAFER is watching. For purchasers, be vigilant: if you buy a split property, check that the sale is not subject to pre-emption. The deadlines are short: SAFER has 2 months to exercise its right from the declaration of intention to alienate. In the event of pre-emption, the purchaser is ousted, unless they negotiate with SAFER.

Four tips to avoid this type of dispute

• Check the status of the property: Before any sale, consult the Local Urban Plan to see if the property is located in a SAFER pre-emption zone. If so, plan ahead.
• Do not artificially separate the rights: If you sell the bare ownership and the usufruct to the same person, even at slightly different dates, SAFER may consider it a single sale. It is better to sell in full ownership and negotiate directly with SAFER.
• Always declare the sale to SAFER: The declaration of intention to alienate is mandatory on pain of nullity of the sale. Even if you think the property is not pre-emptable, declare it.
• Consult a specialised lawyer: In case of doubt, a property lawyer can advise you on possible arrangements and risks. This can save you a costly dispute.

Further reading: related case law and developments

The Court of Cassation had already adopted a similar position in a judgment of 11 December 2013 (No. 12-26.970), where it held that the simultaneous sale of bare ownership and usufruct to two different purchasers acting in concert could be recharacterised as a sale of full ownership. The 2016 decision confirms and extends this logic. The courts tend to favour an economic approach: regardless of the legal form, what matters is the result. In the future, we can expect SAFER to be increasingly vigilant about split ownership arrangements, and for judges to continue to recharacterise transactions aimed at circumventing the right of pre-emption.

What you absolutely must remember

FAQ:

• Can I sell the bare ownership to one person and the usufruct to another to avoid pre-emption? Yes, if the two purchasers are different and independent. But if the sale is simultaneous and the purchasers act in concert, SAFER may recharacterise the transaction.
• What should I do if SAFER pre-empts my property? You can challenge the decision before the administrative court, but the chances of success are low if the pre-emption is lawful. You can also negotiate with SAFER for them to waive or buy the property from you at an agreed price.
• What are the deadlines to follow? The seller must declare their intention to sell to SAFER at least 2 months before the sale. SAFER has 2 months to respond. After this period, it is deemed to have waived.
• Does the right of pre-emption apply to building land? Yes, if the land has an agricultural vocation. In Villefranche-sur-Mer, many plots are classified as agricultural zones, even by the sea.

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