usufructuary does not act as a sensible person in attending to his/her own affairs (by not repainting the building), his/her estate will eventually be liable to the owner for all the loss suffered through his/her neglect.

These are the default rules. They are mandatory in all cases where the usufruct is not established by an inter vivos agreement. If established by agreement, the default rules may be changed by the parties.

Spain

The landlord is under an obligation to maintain the property in a state of good repair during the currency of the lease (Civil Code, art. 1554–2, Law on Urban Leases, art. 21.1 and Law on Rural Leases, art. 18). The only exception is found in the Law on Urban Leases (art. 21.4), which holds the tenant responsible for certain specified minor items of repair. The landlord will be responsible for repairs affecting the habitability of the house or apartment such as a leaking pipe or defective electricity, whereas the tenant will, for example, be responsible for cleaning the house and for repairing holes made in walls for hanging pictures.

This principle can, by analogy, be extended to apply to rural leases. The tenant is obliged to notify the landlord when repairs are needed (Civil Code, art. 1559, para. 2 and Law on Urban Leases, art. 21.3). If urgent repairs are needed, the tenant (in case of an urban lease) can execute them and claim reimbursement from the landlord (art. 21.3). The Law on Rural Leases (art. 18.2) contains a special provision that grants the tenant four options where the landlord has been notified that certain repairs are urgent or necessary but the landlord delays in carrying them out. The tenant can:

(a)approach the court for a judicial order that imposes a duty on the landlord to carry out the repairs;

(b)sue the landlord for breach of contract;

(c)obtain a reduction of the rent; or

(d)execute the repairs, with a right of reimbursement through set off (compensatio) against outstanding rent (Law on Rural Leases, art. 18.2).

The tenant now has a fifth option, namely to resile from the contract (resuelto) (Law on Urban Leases, art. 27.3(a)). The amended Law on Rural Leases of 2005 added that the tenant is entitled to claim damages in any of the above cases if economic loss can be proved.

Necessary repairs are described as ‘those required for maintaining the premises in a habitable condition and capable of being exploited for the

owner is entitled to do so at the usufructuary’s expense (Civil Code, art. 500, para. 2 in Þne).

The nude owner is responsible for all extraordinary repairs (Civil Code, art. 501).201 If they are urgent, the usufructuary must notify the owner of the need to carry them out. If the usufructuary has notified the owner to carry out repairs which are necessary for the continued existence of the property and the owner fails to do so, the usufructuary may carry out the repairs and demand from the owner on termination of the usufruct an amount representing the increase in value of the property attributable to such extraordinary repairs (Civil Code, art. 502).

It is possible to regard the repair of the heating system, repainting the walls and repairing the fences as ordinary repairs for which the usufructuary is responsible. Where the roof has been damaged by a storm (and not by normal use), the repair will exceed the concept of ordinary repairs and will thus be the responsibility of the nude owner. The replacement of the obsolescent heating system can be considered as an improvement, which neither party is obliged to carry out. If the usufructuary decides to install it, it is regarded as an improvement, which he/she is entitled to remove if such removal is possible without damaging the property (Civil Code, art. 487).

Since usufruct is governed by the agreement which establishes the usufruct (Civil Code, art. 470), the above rules are not mandatory and can be deviated from if the usufruct is established by agreement.

The above principles will also apply if B holds a right of use or a right of habitation, also with regard to mandatory rules (Civil Code, art. 523).

The holder of a hereditary building right (superÞcies) becomes ‘temporary owner’ of the building or the plantation for the duration of the right. Accordingly, he/she will be responsible for all kinds of repairs, irrespective of their kind, unless otherwise agreed in the contract creating the building lease.

201Ibid. 33 specifies that the owner is not obliged to carry out the repairs since he/she is not in possession of the property. His/her duty is to pay for the repairs.

The default rule in several countries3 is that the tenant is allowed to cut plantations destined to be cut (silva caedua) at regular intervals in accordance with contractual arrangements and the accepted standards of exploitation in that particular locality.4 In Greece, the crop-sharing tenant is given more control over the general management and exploitation of plantations, while English law vests the property in trees (and the eventual timber) in the landlord.

In principle, the tenant is entitled to enjoy the fruits, but not the substance, of fruit trees, decorative trees and shrubs.5 In Poland, renewable trees such as bamboo are considered fruits and thus subject to appropriation by the tenant. England vests the property in trees and shrubs in the landlord and tenant respectively. In most jurisdictions,6 the cutting down of trees and shrubs is allowed only in the interest of proper maintenance and management of the land concerned. The tenant may therefore cut down and replace old trees and shrubs, remove and replace dead trees and cut down dead branches and brushwood in the interest of proper husbandry. If a tenant is allowed a choice of crops, Spanish law allows him/her to cut down fruit trees and plant another crop as long as the land is returned in the same condition in which he/she received it.

The tenant is entitled to continue existing mining operations if this accords with the function of the property7 and to collect the minerals mined on the land.8 In principle, the opening of new mines and quarries will go beyond the agricultural purpose of the land and will be allowed only with the consent of the landlord9 and the grant of a mining licence10 or public concession11 under applicable mining legislation.

In general, the tenant is not entitled to harvest standing crops after the termination of the lease, but some jurisdictions oblige the landlord (A) to compensate the tenant (B) for the value of the standing crops harvested according to accepted standards, with subtraction of harvest expenses.12 Other jurisdictions allow the tenant to claim the production

3E.g. Germany, Austria, Greece, Belgium, Spain, Italy, Denmark and South Africa. But cf. England and Scotland.

4E.g. every seven years in Germany.

5In Portugal, for example, the tenant will be entitled to the cork from cork trees.

6E.g. Germany, Greece, Spain, Portugal, England, Belgium, South Africa and Hungary.

7A mining concession is usually required. See the Spanish and Portuguese reports.

8See e.g. the German, Greek, Belgian, Italian and Polish reports. In some of these jurisdictions, minerals are considered fruits of the land.

9See the English and Danish reports.

10 See e.g. the German, Austrian and Greek reports. 11 See the Spanish report.

12 See the German, Austrian, Greek, Belgian, Portuguese, Spanish and Danish reports.

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cost of crops left standing on the land,13 while some jurisdictions oblige the tenant to leave a certain quantity of seeds, hay and fertiliser as required for the orderly cultivation of the land during the next season.14 If the tenant unreasonably expected that the crops would be ready for harvesting on termination of the lease, the tenant, under South African law, is entitled to the cost of the seeds, ploughing, tilling and sowing the crops. If the expectation was reasonable, South African jurisprudence allows the tenant to re-enter and reap the crops on its maturity. Belgian law allows the tenant to harvest standing crops if force majeure prevented timely harvesting and English law restricts the time-limit for entering the land to reap matured crops.

In certain jurisdictions, the tenant is only allowed to assign his/her right in the property or to sub-let the land or part of it (for example, a house on the farm) with the landlord’s consent. This rule applies to all leases in some jurisdictions15 and to agricultural leases only in others.16 The rationale for the Greek prohibition on assignment or sub-letting of agricultural leases without consent, is that an agricultural landlord entrusts the land to a particular tenant on account of that tenant’s known expertise in cultivating the land. On assignment or sub-lease of the land without the landlord’s consent, the latter may terminate the contract and sue the tenant for damages for breach of contract.

The Austrian law and the Spanish Civil Code dealing with ordinary leases entitle the tenant to sub-let the property or part thereof if it does not disadvantage the landlord and is not expressly forbidden in the contract. In contrast, the Spanish Law on Agricultural Leases allows assignment or sub-lease of the entire property only for a period not exceeding the term of the lease and in return for rent not exceeding the rent charged in the principal contract. The Spanish Law on Urban Lease allows the tenant to sub-let part of the premises with the written consent of the landlord and for a rent not exceeding the rent under the principal contract. If assignment or sub-lease is allowed, the tenant will be entitled to the proceeds or rent but will also be held liable for any damages attributable to the fault of the assignee or sub-tenant.17

13See the Greek, Polish and Hungarian reports. But cf. the English and Scottish reports.

14See the Greek report. 15 E.g. in Germany, Portugal, Denmark and Poland.

16E.g. in Greece, Belgium and Italy. Standard form contracts in Greece contain a prohibition on the assignment or sub-letting of residential property, while Belgian law allows assignment or sub-letting without the landlord’s consent to relatives.

17See e.g. the Greek report.

Very few jurisdictions address the issue where the proceeds under a sublease fall due on an annual basis and the principal right expires six months before the maturity of sub-interest. Most jurisdictions accept that the subtenant cannot acquire greater rights than the tenant and that the sublease will be terminated automatically on termination of the principal lease and the loss suffered by the sub-tenant on account of the early termination of the sub-lease may be claimed from the sub-landlord but not from the principal landlord on the ground that the sublandlord concluded a contract that was impossible to fulfil.18 In England and Scotland, the termination of the principal tenancy also terminates the sub-tenancy, except in the case of merger and surrender where statute preserves the covenants under the lease so that rent becomes payable to the landlord. In France, the landlord can authorise the tenant to sub-let the property and redirect a percentage of the rent to the principal landlord.

Under a usufruct, the usufructuary is in principle entitled to the natural and civil fruits of the property when harvested as long as he/she respects the economic purpose of the property, takes reasonable care of it and exploits it in accordance with accepted standards of cultivation.19 On termination, the usufructuary must return the property without impairment of its substance. In case of default, the nude owner can demand security against future damage and, on refusal, approach the court for suspension of the usufruct.

Most jurisdictions20 consider plantations that are destined to be cut and used for timber as fruits and allow the usufructuary to cut them at regular intervals in accordance with good husbandry, local custom, regional statutes and regulations, on condition that the property is restored to its former condition. In Germany and Greece, the usufructuary must fell the plantation according to a harvest plan as agreed between the parties or according to a detailed harvesting programme, prepared by an expert appointed by the court on request of one of the parties.

18See the Greek, Spanish, Belgian, Danish, Polish and Hungarian reports.

19See e.g. the German, Austrian, Greek, Belgian and Portuguese reports. Under the Dutch Civil Code, the exercise must be in accordance with the nature of the property and local custom pertaining to the use and collection of fruits, and under the South Africa law, according to the judgment of a sensible person. If constituted by agreement, the terms of the agreement must be observed.

20E.g. Germany, Austria, Greece, Belgium, Portugal, Spain, Italy, the Netherlands, South Africa, Hungary and Poland. But cf. Scotland.

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In general, fruit trees, decorative trees and shrubs are not considered fruits21 and may therefore not be cut or removed except in the interests of good husbandry and orderly exploitation. If removed, they must be replaced to comply with the requirement that the property must be returned without impairment of its substance.22 While live fruit trees and decorative trees23 may not be removed, dead shrubs, fruit trees and ornamental trees and undergrowth or trees uprooted or damaged by a storm24 may be cleared subject to the obligation of replacement.

Most of the jurisdictions25 consider stone and minerals as fruits and therefore allow the usufructuary to continue to work existing quarries and mines for stone and minerals. The only exception is South Africa, which allows the usufructuary to mine existing mines but to take only nonrenewable minerals like salt and peat as fruits. Greek law requires an expert appointed by the court to prepare a plan for the exploitation of existing mines. Spanish law requires the consent of the nude owner to work existing mines and quarries and in the case of a legal servitude allows the nude owner (widow or widower) to take half of the proceeds of mining after the deduction of expenses. Under South African law, the usufructuary is not entitled to the minerals as such but to interest on the proceeds of mining, royalties payable on mining leases and moneys paid on options.

In general, the usufructuary will not be allowed to open new mines on the grounds that it would change the economic purpose of the land, amount to disorderly exploitation,26 introduce substantial changes, and therefore substantially impair the property.27 Under special mining laws in Austria,28 Portugal, Spain and Italy, either the nude owner or the usufructuary, with the nude owner’s consent, must obtain a licence to start mining operations.

21Poland makes an exception in the case of renewable trees and shrubs such as bamboo.

22See e.g. the German, Austrian, Greek, Belgian, Portuguese, Italian, Dutch, South African, Danish and Hungarian reports.

23Except according to the Belgian report if they are part of a nursery.

24See the Italian report.

25See e.g. the German, Austrian, Greek, Belgian, Dutch, Portuguese, Spanish, Italian and Scottish reports.

26In Germany and Portugal, the usufructuary is allowed to quarry for stone if this does not conflict with the ordinary exploitation of the land or does not alter its economic destination.

27See the German, Greek, Belgian and Spanish reports.

28Only stones from quarries belong to the landowner.

In Hungary, ownership of the land does not extend to the minerals below the land and minerals are considered the exclusive property of the State. Special Polish legislation permits the usufructuary to build and use mining equipment on the land in strict compliance with the provisions of the legislation. The usufructuary is obliged to inform the owner of his/her intentions and the owner is entitled to require security against future damage if the planned mining activity were to change the use of the land or conflicts with the proper management of the property.

Most jurisdictions29 accept that standing crops belong to the nude owner on expiry of the usufruct as a quid pro quo for the fact that they became the property of the usufructuary when he acquired the usufruct.30 Some jurisdictions achieve an equitable solution, by obliging the nude owner on expiry of the usufruct to reimburse the usufructuary for the cost of production of the crop up to the value of the standing crop.31 Under Greek law, the usufructuary is further obliged to leave behind seeds, hay and fertilisers as required for an orderly cultivation of the next harvest. However, just as in the case of the tenant of agricultural land, the usufructuary’s estate shall have a claim against the nude owner for compensation in respect of the quantity of produce that was left behind to the extent that he/she did not receive such items at the inception of the usufruct.

Italian law provides a more equitable solution. It divides the net proceeds of the crop between the usufructuary and the nude owner in proportion to the duration of their respective rights up to the time of harvesting. Hungarian law entitles the usufructuary to a portion of the standing crops proportionate to the labour and cost invested in their cultivation, which, interestingly, must be handed over to the usufructuary in kind. The Polish and the South African reports suggest that the usufructuary should have a claim on the ground of unjustified enrichment against a nude owner who becomes the owner of the standing crops on expiry of the usufruct.

In principle, the usufructuary is allowed to lease the property without the owner’s consent and collect the rent as civil fruits until the expiry of the usufruct. Where the usufruct expires six months before the next annual

29See the Austrian, Portuguese, Belgian, Spanish, Dutch and South African reports. But see the Scottish report.

30Portuguese law achieves this by allocating fruits to the usufructuary on the date of harvesting (iure corporis) rather than the date of planting or sowing (iure seminis).

31See the Austrian and Portuguese reports.

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rent is due, most jurisdictions32 will entitle the usufructuary to rent until the expiry of the usufruct and the nude owner thereafter until the termination of the lease. In Greece and Spain the nude owner is subrogated in such circumstances to the rights of the landlord (usufructuary) for the remaining period of the lease. If the lease is executed in a public deed or a private deed with a certified date, Italian law stipulates that if such lease comes to an end after the usufruct expired, the lease will continue for the remaining period of the lease up to a maximum period of five years with a division of rent as stated above. Hungarian law achieves the same result by providing that in such a situation the rent must be divided between the usufructuary and the nude owner in the same way as if the property was sold and transferred to the nude owner.

It is generally accepted that the holder of a right of use or of a right of habitation is allowed to use the property and to collect fruits for domestic purposes or to use the house on the property as a residence respectively. The fruits collected must be destined for immediate consumption by the usuary and his/her household and not for commercial exploitation. As evidenced by the Spanish and Italian reports, the right holder will only be allowed to collect wood, dead branches, dead trees and dead undergrowth from plantations and presumably also from fruit trees, decorative trees and shrubs as firewood for himself/herself and for his/ her family. Because of the restricted content of the right, the usuary or the habitator will not be entitled to open new quarries or mines or even work existing ones. Spanish, Italian and Hungarian law does not allow either the usuary or the habitator to rent out the property. Traditionally, however, the usuary was allowed to rent out a room in the house, provided he/she occupied the rest of the house, and the habitator was allowed to rent out the entire house. Under the French Civil Code, a surviving spouse with a right of habitation is allowed to rent out the residential premises for which he/she no longer has any use (for example, because he/she has moved to a retirement home).

In principle, the holder of a hereditary building right (superÞciarius) is entitled to improve the property by constructing buildings on the property, planting plantations and fruit trees, and sowing crops, but he/she is not entitled to open and work new mines and quarries on the land. In some jurisdictions,33 the superÞciarius is treated as the owner of the

32E.g. under German, Austrian, Belgian, Portuguese, Spanish, Italian, Scottish, South African, Hungarian and Polish law.

33See e.g. the Spanish, Belgian and Dutch reports.