Usufruct of a Business: Can the Bare Owner Demand Continued Operation?

You are the bare owner of a business, but the usufructuary – often a relative – operates it. What happens if he decides to close the shop? In Marcq-en-Baroeul, a trader recently told me: “My father, the usufructuary of my business, stopped everything overnight. Can I force him to continue or at least return the usufruct to me?” A legitimate question, but the courts' answer may surprise you.

Many assume that the usufructuary has an absolute duty to operate the business until the end. Yet, the Court of Cassation, in a judgment of 28 January 1980, said exactly the opposite: if the bare owner was informed of the difficulties and did not request the renunciation of the usufruct, the closure of the business is not a fault. A decision that changes things, especially when family relationships are involved.

So, what to do if you are a bare owner or usufructuary? This article analyses the judgment, its practical consequences and gives you the keys to avoid a conflict. Fasten your seatbelt, we dive into the law of usufruct – without jargon.

The Facts: A Story Like Many Others

Mr. Roger E…, usufructuary of a business inherited from his mother, operates the business with his son, the bare owner. The father runs the counter, the son monitors the accounts. But business turns bad: losses, debts, cash flow difficulties. After trying for a long time to salvage the situation, the father throws in the towel: he ceases operations and deregisters the business from the trade and crafts register.

The son, on the other hand, does not see it that way. He sues his father, seeking forfeiture of the usufruct for gross fault. His argument? The usufructuary had an obligation to operate the business, and by closing it, he destroyed the very object of the usufruct, causing damage to the bare owner. He adds that the father should have renounced his usufruct rather than liquidating the business.

The Court of Appeal rules in favour of the father. The son appeals to the Court of Cassation. But the High Court dismisses his appeal: it validates the reasoning of the trial judges. For them, the bare owner, who was in constant contact with his father and informed of the difficulties, could not demand operation at all costs. In short, the usufructuary did not commit a fault by ceasing operations, because this measure was necessary.

The Court's Reasoning — Analysed

To understand this judgment, we must go back to the basics of usufruct. Usufruct (the right to enjoy a property without being its owner) gives the usufructuary the right to operate a business, but also the obligation to ensure its preservation. Article 578 of the Civil Code defines it, and Article 605 imposes the obligation to make maintenance repairs. But what about the obligation to operate? The law is silent.

The Court of Cassation relies on Article 1240 of the Civil Code (liability for fault) to say that the usufructuary can only be held liable if he has committed a fault. However, here, the fault is not established. Why? Because the bare owner was fully informed of the situation: he knew that the business was in difficulty, he knew the accounts. If he believed that the usufructuary could not continue, it was up to him to request the renunciation of the usufruct, not to demand a ruinous operation.

The judges hold that the deregistration of the business was an inevitable consequence of the cessation of activity, not an intentional fault. The usufructuary did not 'cause the disappearance' of the business out of malice; he simply ended a non-viable activity. Moreover, the bare owner had neither the right nor the means to obtain the disclosure of the usufruct encumbrances (the sums invested by the usufructuary) – which shows that it was he who should have acted.

This judgment confirms a trend: the usufructuary is not a forced operator. He may cease operations if the activity is structurally loss-making, provided he does not intentionally harm the bare owner. This is an application of the principle of proportionality.

What This Changes for You — Practically

If you are a bare owner: You cannot require the usufructuary to operate the business at a loss. If the business is in the red, the usufructuary may legitimately close. Your only recourse? Prove that the cessation is abusive (for example, if the usufructuary deliberately emptied the cash registers). But if you were informed and passive, you will be dismissed. Example: in Armentières, a bare owner lost his case because he followed the accounts every month without saying anything.

If you are a usufructuary: You are protected if you can prove that you informed the bare owner of the difficulties and that closure was the only solution. Keep all written exchanges, financial statements, registered letters. In case of dispute, you will be able to demonstrate your good faith.

For both parties: This decision reminds us of the importance of communication. A usufructuary who keeps the bare owner in the dark could be at fault. Conversely, a bare owner who sits idly by may not be able to complain later.

A concrete example: a business in Marcq-en-Baroeul generates €50,000 in annual losses. The usufructuary closes after two years. The bare owner claims €150,000 in damages. The court applies the 1980 judgment and dismisses the claim for lack of fault. Result: zero compensation.

Four Tips to Avoid This Type of Dispute

• Draft a precise usufruct agreement: Before anything else, set out in writing the rights and obligations of each party, particularly the conditions for cessation of activity. Include a clause for early renunciation.
• Inform each other regularly: The usufructuary must provide annual accounts to the bare owner. The bare owner must acknowledge receipt and ask questions if there are signs of difficulty.
• In case of difficulties, propose an alternative solution: Before closing, the usufructuary can propose that the bare owner take over the operation or renounce the usufruct. A negotiated solution avoids litigation.
• Consult a lawyer at the first signs of tension: A 30-minute interview can guide you on the next steps. In Marcq-en-Baroeul as in Armentières, prevention is better than cure.

Further Reading: Related Case Law and Developments

Before 1980, some Courts of Appeal considered that the usufructuary had an obligation of result: to keep the business in operation. The 1980 judgment marked a turning point. Since then, the Court of Cassation has confirmed this solution in several judgments, notably in 1995 (No. 93-15.672) where it held that the usufructuary may cease operations if they are loss-making, unless there is abuse.

The current trend is therefore favourable to the usufructuary, provided he acts in good faith. Conversely, if the usufructuary closes the business to harm the bare owner (for example, to deprive him of the bare ownership), he commits a fault. The line is sometimes thin, hence the importance of proving economic difficulties.

For the future, it can be expected that judges will be even more demanding on the proof of information to the bare owner. A simple 'he knew' will no longer suffice; written documents will be required.

Checklist Before Acting

FAQ: 5 Essential Questions

• Can the usufructuary close the business without my consent? Yes, if the activity is loss-making and you are informed. He must nevertheless notify you.
• Can I demand forfeiture of the usufruct if my father closes the shop? Only if he acted in bad faith or without valid reason. The courts are strict.
• What if the usufructuary does not inform me of the accounts? Send a formal notice by registered letter to provide the documents. If he refuses, apply to the court.
• What is the time limit to act? You have 5 years from the closure to bring a liability action (Article 2224 of the Civil Code).
• How much does a usufruct lawsuit cost? Between €3,000 and €10,000 in legal fees, plus costs. Mediation is often cheaper.

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