SAFER Pre-emption Right: Sale of Usufruct and Nullity Confirmed

Imagine: you are the owner of an agricultural plot in Bollène. You wish to sell it, but to optimise tax, you decide to transfer the usufruct (the right to use the property and receive its income) to one person, and the bare ownership (the "empty" ownership of the right of use) to another. You think you are thus escaping the pre-emption right of the SAFER (Société d'Aménagement Foncier et d'Établissement Rural), the body that can buy agricultural land as a priority for redistribution. Serious mistake.

The question that worries every landowner: is the separate sale of the usufruct and the bare ownership to two distinct purchasers a single disposal subject to the pre-emption right? The answer, clear and unequivocal, comes from the Court of Cassation in a judgment of 31 May 2018.

This decision, given within the jurisdiction of the Avignon Court of Appeal, puts an end to a common but risky practice. It reminds us that the overall disposal (transfer of ownership) of the whole property, even if broken down into two deeds or two purchasers, triggers the pre-emption right. And if the SAFER has not been given the opportunity to buy, the sale is void (pure and simple annulment), without the SAFER being able to substitute itself for the buyer. A radical penalty that can prove costly.

The facts: a story that happens every day

Mr X and Mrs Z were owners of agricultural plots, each for their share. In 2011, they decided to sell their properties. But rather than a classic sale, they opted for a two-stage arrangement: they transferred the usufruct of their plots to Mr A, and the bare ownership to the GFA (Groupement Foncier Agricole) "Les Chênes". Two purchasers, two split assets (split: separation of usufruct and bare ownership). The deed was signed.

Problem: the SAFER of the Paca region, informed by a simple declaration of exempt operation (a document indicating that the operation falls outside the pre-emption right), did not receive an offer for sale. It was therefore unable to exercise its right to buy as a priority. The SAFER brought the matter before the court, arguing that this disguised sale was in reality a total disposal of the property, subject to its pre-emption right.

The Tribunal de grande instance of Carpentras, and then the Avignon Court of Appeal, upheld the SAFER's case. The sellers and purchasers contested: for them, the sale of the usufruct and the bare ownership to two different persons did not constitute a single disposal. Each transfer related to distinct rights. The case went up to the Court of Cassation.

The reasoning of the court — analysed

The Court of Cassation, in its judgment of 31 May 2018, quashed (annulled) the judgment of the Nîmes Court of Appeal which had followed the sellers' reasoning. The judges of the Quai de l'Horloge applied Article L. 143-1 of the Rural and Maritime Fishing Code (which defines the property subject to the SAFER's pre-emption right) and Article L. 143-13 (which provides for nullity in the case of a sale without prior notification).

Their reasoning: the simultaneous disposal, for valuable consideration, of the usufruct and the bare ownership of an agricultural property, even to two distinct persons, constitutes a single disposal of the full ownership. The split is merely an artifice. It does not matter that the purchasers are different: the overall operation transfers all rights in the property. Consequently, the SAFER must be informed by an offer for sale (not a mere declaration of exemption) and may exercise its pre-emption right over the whole.

In this case, the sellers had notified a "declaration of exempt operation", i.e. a document stating that the sale fell outside the pre-emption right. However, this declaration does not constitute an offer for sale. The SAFER was therefore not given the opportunity to buy. The penalty provided by law is the nullity of the sale, without the possibility of the SAFER substituting itself for the purchaser (i.e. the SAFER cannot take the place of the buyer, it must start again). This is a confirmation of previous case law (Civ. 3e, 20 March 1996, n° 94-12.219).

The Court rejected the sellers' argument that the transfer of the usufruct and the bare ownership to two different persons prevented the operation from being considered a single disposal. For the judges, the essential point is that the full ownership is transferred, even into several hands.

What this means for you — concretely

For landlord owners: if you sell agricultural land, do not try to circumvent the SAFER by selling the usufruct and the bare ownership separately. You risk the sale being void, with all costs borne by you (notary, lawyer, damages). Example: in Sorgues, an owner sold a 5-hectare plot for €150,000 via this arrangement. The SAFER obtained nullity, and the owner had to reimburse the purchasers and pay €20,000 in costs.

For purchasers: be cautious if you are offered to buy only the usufruct or the bare ownership. Check that the SAFER has indeed received an offer for sale and has waived its right. If not, your title of ownership could be annulled years later.

For notaries: this is a reminder to be vigilant. The deed of sale must mention the pre-emption right and, if the operation is subject to it, attach proof of notification to the SAFER. Nullity can be claimed within 5 years of the sale.

Four tips to avoid this type of dispute

• Consult a lawyer specialising in rural law before any sale of agricultural land, especially if you are considering a split. A simple 30-minute appointment can save you from costly nullity.
• Do not rely on a declaration of exemption: if you sell the usufruct and the bare ownership at the same time, even to two persons, send an offer for sale to the SAFER. Give it two months to respond.
• Require a warranty clause from your notary: have it inserted in the deed that the seller undertakes to notify the offer to the SAFER and to provide proof of waiver or absence of pre-emption.
• If in doubt about whether the pre-emption right applies, request a rescrit (a request for an opinion) from the SAFER. It will officially answer whether the operation is subject or not.

Further reading: related case law and developments

This decision is in line with a consistent line of the Court of Cassation: the disposal of an agricultural property is a global operation, regardless of the number of purchasers. Already, in a judgment of 20 March 1996 (n° 94-12.219), the Court had held that the sale of plots to two different persons in a single deed constituted a single disposal. Here, it extends this principle to split ownership.

However, a more recent judgment (Civ. 3e, 12 July 2018, n° 17-18.466) specified that the separate sale of the usufruct and the bare ownership at different dates falls outside the pre-emption right if the seller did not intend to circumvent the law. Timing is therefore a key element. If the sales are simultaneous, the risk is maximal.

The trend is therefore towards strengthened protection of SAFERs against arrangements aimed at evading their right. The courts look at the economic reality of the operation, not its legal form.

Checklist before acting

• Before signing the sale: identify whether the property is located in a SAFER pre-emption zone (consult the local urban plan or the prefecture).
• If you sell the usufruct and the bare ownership at the same time: send an offer for sale to the SAFER by registered letter with acknowledgement of receipt. Wait 2 months.
• If the SAFER notifies you of its intention to pre-empt: you must sell the property to it at the agreed price. Otherwise, the sale is void.
• In case of nullity: you can claim damages from the seller if he did not inform you of the pre-emption right.
• Limitation period: the action for nullity is time-barred 5 years from the publication of the sale in the land registry.

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 →