Right of Use and Habitation: When Co-ownership Comes into Play

Imagine the scene: in Decazeville, in the Aveyron, a building has housed a family for decades. The father gave his son a right of use and habitation (the right to occupy the home for life), but retained the bare ownership. Upon his death, his other children inherit the full ownership. Problem: the occupying son and the new owners cannot agree on the use of the property. Who decides on the works? Can partition be forced? This question, faced daily by owners and holders of real rights, found a clear answer in a judgment of the French Supreme Court of 7 July 2016.

The high court ruled that when the owner of a property and the holder of a right of use and habitation (a real right allowing occupation of the home without being the owner) exercise competing rights over that property, they find themselves in a situation of co-ownership (common possession) as regards that right of use and habitation. Consequence: they can demand its partition, i.e., the liquidation of that right, for example by converting it into a sum of money or by selling the property.

This judgment, delivered in a case from Villefranche-de-Rouergue, disrupts notarial practice and offers a solution to deadlocked situations. Full analysis, with concrete advice to avoid or resolve this type of dispute.

The Facts: A Story as Common as Can Be

In 1992, a couple acquired a building located in Decazeville, rue des Fleurs. The husband, Mr. L., died in 2010, leaving his wife and their three children. By will, he had bequeathed to his eldest son, Jean, a right of use and habitation (right to occupy the home for life, without being able to let it) over the building. The other two children, Pierre and Marie, inherited the bare ownership (ownership without the right of occupation) in equal shares.

Tensions quickly arose. Jean occupies the home alone but refuses to allow his brother and sister access. Pierre and Marie wish to sell the property, but Jean opposes this, arguing his right of use. The owners then sue Jean in court to demand the partition of the right of use and habitation, arguing that this right is co-owned (common) between them and their brother.

The Tribunal de Grande Instance of Rodez, seised at first instance, dismissed Pierre and Marie's claim in 2013. It considered that the right of use and habitation is a personal and non-assignable right (which cannot be transferred or partitioned), and therefore there is no co-ownership. The owners appealed. The Montpellier Court of Appeal, in a judgment of 2 December 2014, upheld the decision: in its view, the right of use and habitation is a life right (for life) which expires upon the death of its holder, and cannot be partitioned while it exists. Pierre and Marie then appealed to the Supreme Court.

The Reasoning of the Court — Analysed

The French Supreme Court quashed the appeal judgment and remitted the case to the Toulouse Court of Appeal. It based its decision on Article 815 of the Civil Code, which governs co-ownership (a situation where several persons have rights of the same nature over the same property). The supreme judges considered that the right of use and habitation, although personal and for life, is a real right (which directly relates to the property) and not a mere personal right (like a lease). Consequently, the owner (who has the bare ownership) and the holder of the right of use (who has the occupation) both exercise real rights over the same property: one holds the (dismembered) ownership, the other the use. These rights are of the same nature (they are real rights) and are exercised concurrently. Therefore, there is co-ownership between them, and partition can be demanded.

The Court specified that the partition does not relate to the right of use itself (which is for life), but to the value of that right, for example by converting it into an annuity or by proceeding with the sale of the property with distribution of the price. In other words, the judge may, at the request of a co-owner, order the termination of the co-ownership by liquidating the right of use and habitation.

This decision marks a notable evolution: previously, case law often considered that the right of use and habitation, being for life and personal, could not be partitioned. Now, the French Supreme Court opens a breach by recognising co-ownership and thus the possibility of escaping this deadlocked situation. The arguments of the owners (need for liquidity, disagreement) prevailed over those of the occupant (who invoked his right to occupy for life).

What This Changes for You — Concretely

For landlord owners: if you have granted a right of use and habitation to a relative (by gift or will), you are no longer condemned to endure this situation indefinitely. In the event of a conflict, you can ask the judge for partition of this right. For example, if the home is worth €200,000 and the right of use is valued at €80,000, the judge may order the sale and allocate you your share. But beware: partition is not automatic; the judge exercises sovereign discretion as to whether to order it.

For holders of a right of use and habitation: be aware that your right is not absolute. You may be forced to share it, which could lead to a loss of occupation. On the other hand, you can also demand partition if you consider that the situation is unfavourable to you (for example, if the owners prevent you from peacefully enjoying the property).

Let us take a concrete example from Villefranche-de-Rouergue: an elderly lady lives in a house thanks to a right of use granted by her son, the owner. The son wants to sell, but his mother refuses. Now, the son can apply to the judge for partition. If the court orders it, the mother will receive compensation equivalent to the value of her right (calculated on her life expectancy), and the property will be free of any occupation.

If you are a buyer of a property burdened with a right of use and habitation, this decision offers you a way out: you can demand partition to free the property, even if the holder of the right opposes it.

Four Tips to Avoid This Type of Dispute

• Draft a precise notarial deed: when you grant a right of use and habitation, detail the terms (duration, conditions of revocation, charges). Expressly mention whether the right is assignable or partitionable. This avoids divergent interpretations.
• Provide for an exit clause: in the gift or will, include a clause allowing the owner to buy out the right of use, at a determined price or according to a calculation method. For example: “The right of use may be bought out at any time by the bare owner, for an amount equal to the capitalised rental value over the life expectancy of the holder.”
• Regularly assess the situation: if you are an owner and the holder of the right of use is elderly, anticipate: request an estimate of the value of his right. This will allow you to negotiate an amicable buyout before the conflict escalates.
• Consult a specialised lawyer before any dispute: a partition action is complex and requires a strategy. A lawyer will help you gather evidence (deeds, correspondence) and assess your chances. Mediation can also be attempted before trial.

Further Details: Related Case Law and Developments

Before this judgment, the French Supreme Court had already initiated a shift in a judgment of 4 November 2015 (No. 14-21.323), where it held that the right of use and habitation could be valued in money and be the subject of a balancing payment (compensatory payment) in the event of a succession partition. The 2016 decision confirms and extends this principle to co-ownerships between owner and holder of the right.

Another decision, of 13 January 2010 (No. 08-21.099), had refused to recognise co-ownership between the bare owner and the usufructuary (right to enjoy the property). The 2016 judgment therefore makes a distinction: the right of use and habitation, more limited than usufruct, is treated differently. The current trend of the courts is to favour the circulation of property and to avoid situations of prolonged deadlock.

In the future, it is expected that judges will use this solution to resolve family conflicts, particularly in succession matters. However, partition is not systematic: the judge must verify that co-ownership is indeed constituted and that the partition is equitable.

What You Must Absolutely Remember

• A right of use and habitation can be partitioned: yes, since this judgment, the owner and the holder of this right are considered co-owners and can demand partition in court.
• Partition does not mean automatic eviction: the judge may order the sale of the property with distribution of the price, or award financial compensation to the holder of the right.
• Anticipate through contractual clauses: to avoid a trial, provide from the outset the exit arrangements (buyout, limited duration, etc.).
• Consult a lawyer before acting: a partition action requires legal expertise and a financial assessment. Do not go it alone.
• Time and cost: a partition procedure can take 1 to 3 years, with lawyer and expert fees of €3,000 to €10,000, but it can unlock a situation that has lasted for years.

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