- •Time-Limited Interests in Land
- •The Common Core of European Private Law
- •Contents
- •General editors’ preface
- •Preface
- •Contributors
- •Abbreviations
- •1 Setting the scene
- •1. The scene
- •2. Balancing the interests: a handful of common problems
- •3. Time-limited interests arising by operation of law
- •2 General introduction
- •1. Overview
- •2. The hybrid character of time-limited interests in land
- •3. The approach and purpose of this study
- •3.1. Background
- •3.2. Drawing a geographical map of the law of Europe
- •4. The genesis of the book
- •4.1. Narrowing down the topic
- •4.2. Terminology
- •5. Structure of the book
- •3 Historical evolution of the maxim ‘sale breaks hire’
- •1. Introduction
- •2. The Roman-law approach
- •3. The ius commune position
- •3.1. Medieval learned law
- •3.2. From medieval learned law to the Prussian Civil Code
- •3.3. From the Prussian Civil Code to the German Civil Code
- •4. Conclusions
- •4 The many faces of usufruct
- •1. Usufruct in tax and estate planning
- •1.1. Transferring assets yet retaining control and income
- •1.2. Overview
- •2. The concept of usufruct
- •3. The traditional face
- •3.1. Control
- •3.2. Income
- •4. The modern face of usufruct
- •4.1. Control
- •4.2. Income
- •5. The Janus face
- •6. The twisted face
- •6.1. Default rules
- •6.2. Contractual expansion
- •6.3. Limits
- •7. Conclusion
- •Comparative observations
- •Austria
- •Belgium
- •Denmark
- •England
- •France
- •Germany
- •Greece
- •Hungary
- •Italy
- •The Netherlands
- •Poland
- •Portugal
- •Scotland
- •South Africa
- •Spain
- •Comparative observations
- •Austria
- •Belgium
- •Denmark
- •England
- •France
- •Germany
- •Greece
- •Hungary
- •Italy
- •The Netherlands
- •Poland
- •Portugal
- •Scotland
- •South Africa
- •Spain
- •Comparative observations
- •Austria
- •Belgium
- •Denmark
- •England
- •France
- •Germany
- •Greece
- •Hungary
- •Italy
- •The Netherlands
- •Poland
- •Portugal
- •Scotland
- •South Africa
- •Spain
- •Comparative observations
- •Austria
- •Belgium
- •Denmark
- •England
- •France
- •Germany
- •Greece
- •Hungary
- •Italy
- •The Netherlands
- •Poland
- •Portugal
- •Scotland
- •South Africa
- •Spain
- •Comparative observations
- •Austria
- •Belgium
- •Denmark
- •England
- •France
- •Germany
- •Greece
- •Hungary
- •Italy
- •The Netherlands
- •Poland
- •Portugal
- •Scotland
- •South Africa
- •Spain
- •Comparative observations
- •Austria
- •Belgium
- •Denmark
- •England
- •France
- •Germany
- •Greece
- •Hungary
- •Italy
- •The Netherlands
- •Poland
- •Portugal
- •Scotland
- •South Africa
- •Spain
- •Comparative observations
- •Austria
- •Belgium
- •Denmark
- •England
- •France
- •Germany
- •Greece
- •Hungary
- •Italy
- •The Netherlands
- •Poland
- •Portugal
- •Scotland
- •South Africa
- •Spain
- •Comparative observations
- •Austria
- •Belgium
- •Denmark
- •England
- •France
- •Germany
- •Greece
- •Hungary
- •Italy
- •The Netherlands
- •Poland
- •Portugal
- •Scotland
- •South Africa
- •Spain
- •Comparative observations
- •Austria
- •Belgium
- •Denmark
- •England
- •France
- •Germany
- •Greece
- •Hungary
- •Italy
- •The Netherlands
- •Poland
- •Portugal
- •Scotland
- •South Africa
- •Spain
- •Comparative observations
- •Austria
- •Belgium
- •Denmark
- •England
- •France
- •Germany
- •Greece
- •Hungary
- •Italy
- •The Netherlands
- •Poland
- •Portugal
- •Scotland
- •South Africa
- •Spain
- •Comparative observations
- •Austria
- •Belgium
- •Denmark
- •England
- •France
- •Germany
- •Greece
- •Hungary
- •Italy
- •The Netherlands
- •Poland
- •Portugal
- •Scotland
- •South Africa
- •Spain
- •Comparative observations
- •Austria
- •Belgium
- •Denmark
- •England
- •France
- •Germany
- •Greece
- •Hungary
- •Italy
- •The Netherlands
- •Poland
- •Portugal
- •Scotland
- •South Africa
- •Spain
- •Case 1
- •Case 2
- •Case 3
- •Case 4
- •Case 5
- •Case 6
- •Case 7
- •Case 8
- •Case 9
- •Case 10
- •Case 11
- •Case 12
- •Belgium
- •Denmark
- •England
- •Germany
- •Greece
- •Hungary
- •Italy
- •Poland
- •Portugal
- •Scotland
- •South Africa
- •Spain
- •Bibliography
- •GENERAL BIBLIOGRAPHY
- •AUSTRIA
- •BELGIUM
- •DENMARK
- •ENGLAND
- •GERMANY
- •GREECE
- •HUNGARY
- •ITALY
- •THE NETHERLANDS
- •POLAND
- •PORTUGAL
- •SCOTLAND
- •SOUTH AFRICA
- •SPAIN
- •General index
- •Country index
- •Books in the series
352 c a s e s t u d i e s
The above do not apply to the right of habitation. The Greek Civil Code (art. 1186) expressly provides that the owner is not entitled to demand security from the holder of a right of habitation. The habitator is further not obliged to insure the building against damage.35
Hungary
Under a lease and an income-producing lease, the landlord may control the use of the property if this does not cause unnecessary inconvenience to the tenant. He/she may demand that the tenant use the property in a proper manner and in the way prescribed by the contract. If the tenant does not comply with the above demand, or if, owing to the extent of the danger, it is pointless to demand that the tenant stop the improper use, the landlord can terminate the contract with immediate effect and claim damages. If the tenant performed an unlawful reconstruction without the permission of the landlord or a competent public administrative authority, he/she can be ordered to restore the property to its original status. The owner can also exercise the above rights against a sub-tenant (Civil Code, § 425(2)–(4)).
The owner is entitled to control the manner in which the usufructuary exercises his/her rights. The owner may claim security if the usufructuary, despite repeated warnings, does not use the property in a proper manner, damages the property or endangers its return on termination of the usufruct. If the usufructuary fails to provide security, the court, at the request of the owner, can suspend the exercise of the usufruct until security is provided. The owner is also entitled to these rights against any person to whom the usufruct was abandoned (Civil Code, § 161).
The loan for use can be terminated with immediate effect if, inter alia, the borrower impairs the property, uses it improperly, abandons its use to a third person without the permission of the lender, or if there is a danger that the borrower will not return the property in a sound condition (Civil Code, § 585(4)(b)). The law does not, however, confer an express right of control on the lender.
Italy
When the tenant fails to perform his/her obligations, the landlord can either demand performance or termination of the lease, reserving in
35 Papadopoulou, in Georgiades and Stathopoulos, GCC, Collective Analysis, art. 1186 (196–7).
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both cases the right to claim compensation for damages caused (Civil Code, art. 1453). Termination may, however, not be claimed where nonperformance by one of the parties only slightly affects the interests of the other (Civil Code, art. 1455). For instance, if the tenant of a residential premises operates a small commercial or industrial concern without any important physical alteration of the property, the landlord is not usually entitled to demand termination of the contract.36 If the landlord claims performance of contractual obligations, he/she may in addition claim for damages even before the end of the lease.
A usufruct can be terminated if the usufructuary abuses his/her right by transferring or damaging the property or by allowing it to deteriorate owing to neglect to undertake ordinary repairs (Civil Code, art. 1015). Instead of terminating the usufruct, the court may order the usufructuary to provide security against future harm, or that the property be leased or placed under administration at the usufructuary’s expense. The court may even order that possession be returned to the nude owner subject to an obligation to pay the usufructuary a specified annual sum of money for the duration of the usufruct (Civil Code, art. 1015). According to prevailing opinion, these remedies should only be exercised in the face of serious or repeated violations by the usufructuary.
As a general principle, the owner can obtain a court injunction to interdict the usufructuary from continuing unlawful activities on the property and claim compensation for any damage caused. However, there is some authority for the view that the owner’s right to immediate action in respect of minor violations is limited by the fact that the usufructuary’s autonomous right of enjoyment affords him a degree of discretion in deciding how and when to comply with his/her obligations. For instance, if a lack of ordinary repairs does not endanger the property, the owner should wait until the expiry of the usufruct before requesting restoration of the property and compensation for damage.37
The literature on hereditary building leases (superÞcies), does not discuss this issue.
The Netherlands
Under Civil Code, art. 7: 352 and the Law on Agricultural Leases (Pachtwet), art. 28 the landlord can sue the tenant for any damage
36 See e.g. Cass. civ. 20/06/1957 n. 2339. 37 See Caterina, I diritti, pp. 153–4.
354 c a s e s t u d i e s
which flows from a breach of an agricultural lease and which is imputable to him/her. Any damage to the property other than damage by fire is presumed to be the result of the tenant’s breach of contract. Civil Code, art. 7:218 applies the above rule also to residential leases with the added presumption that damage caused to the outside walls of the residence is not damage for which the tenant can be held liable.
In the case of usufruct, the nude owner is entitled to ask the District Court for either an order to declare him/her the administrator of the usufruct or to place the property subject to the usufruct under administration in the case of serious non-performance of his/her obligations by the usufructuary (Civil Code, art. 3:221).
The owner may terminate a hereditary land lease (emphyteusis) in the case of fundamental breach of contract by the holder or if the holder has defaulted on the payment of ground rent for two consecutive years (Civil Code, art. 5:87 II). Notification of the termination must be given to the person registered as holder in the Land Register by means of a writ served by a bailiff within eight days from the date of nonperformance (Civil Code, arts. 5:87 II and 5:88).
Civil Code, arts. 5:87 II and 5:88 apply by way of analogy to an independent hereditary building lease (superÞcies) (Civil Code, art. 5:104 II). Where the hereditary building lease is linked to another real right, the statutory rule does not apply.
Poland
In general, the landlord is entitled to terminate any kind of lease with immediate effect without observing the notice periods (Civil Code, art. 667, § 2). The Law on Protection of Tenants, art. 11, § 2 relating to residential leases is an exception, requiring a notification of one month for termination on account of non-payment of rent, misconduct resulting in damage and causing a nuisance. The landlord can only request ejection of the tenant for important causes (Law on Protection of Tenants, art. 11, § 10). Obviously, the landlord has contractual claims for damages based on breach of contract where the tenant uses the property contrary to the provisions of the contract or in a way which may lead to damage to the property or its loss. The landlord is not entitled to obtain an injunction to stop acts which may cause damage.
The nude owner (A) has no right to cancel the usufruct and to eject the usufructuary. He/she may claim damages if the land is not in a proper condition upon termination of the usufruct. A request for security to be
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given against possible future loss is only possible if the usufructuary informs the landowner of his/her intention to undertake mining activities. Consequently, the provisions contained in the constitutive agreement by which the usufruct is granted (which is the principal manner in which usufruct is created in Poland) determine the ways in which the usufruct may be terminated and the scope of liability if one party is in breach of the contract. It may also be argued that A may resort to an actio negatoria to interdict a usufructuary from conducting harmful activities on the land. A may claim damages according to general contract law rules.
The owner has a very distinct remedy against the holder of a hereditary land lease (perpetual usufruct, emphyteusis) who uses land contrary to contractual provisions, particularly if he/she has not erected the specified buildings. The owner is entitled to terminate the hereditary land lease immediately (Civil Code, art. 240). Where the holder of the perpetual usufruct has not erected buildings within the agreed time limit, the owner may set a new date and levy an additional fee on the holder instead of terminating the perpetual usufruct (Law on Management of Real Property, art. 63).
Civil Code, art. 913 provides that if for any reason the relation between a lifetime habitant and his/her host is such that the parties cannot be expected to continue direct contact, the court shall, on demand of either party, convert some or all the rights of the lifetime habitant into an annual lifetime pension based on the value of those rights. In extraordinary cases, the court may, on demand of either party, terminate the contract of lifetime habitation.
Portugal
Under a lease, the tenant must take care of the property and use it with due diligence (Civil Code, art. 1038). On termination, the tenant must return the property in the same condition it was received in, with allowance for fair wear and tear.
In the case of an urban lease, the landlord may ask for cancellation of the lease (Civil Code, art. 1083) and institute a claim for delictual damages according to general rules contained in the Civil Code (arts. 798 ff.) if he/she is dissatisfied with the way in which B conducts himself/herself with regard to the property. Meanwhile, the landlord can obtain a court order to restrain the tenant from harmful conduct. The landlord can evict the tenant after cancellation of the contract (Civil Code, art. 1081).
356 c a s e s t u d i e s
The tenant has three months to leave the property, unless the judge orders him/her to leave immediately or unless the parties agree otherwise (Civil Code, art. 1084).
In the case of an agricultural lease, the landlord is entitled to notify the tenant of the cancellation of the lease in the following circumstances: if the tenant does not pay the rent; if the tenant’s non-compliance with his/her legal duties affects the productivity, substance or the economic and social function of the property; if the tenant’s method of cultivation prejudices the productivity of the property; or if the tenant does not maintain the property in a good state of repair or causes damage to items brought onto the property that are not included in the contract; if the tenant changes the structure of the land; and, finally, if the tenant allows a third party to use the land. In addition, the landlord can claim compensation for damage caused to the property through the tenant’s fault or as a result of the non-compliance with his/her duties as an agricultural tenant (Decree-Law 294/2009, art. 17). The landlord can evict the tenant after cancellation of the contract.
At the outset of a usufruct, the usufructuary is obliged to prepare, in collaboration with the owner, an inventory of the various assets included in the usufruct and the condition and value of each item (Civil Code, art. 1468). In addition, the owner may request that the usufructuary provide security in case of damage to the property (Civil Code, art. 1468, no. 2). The nude owner will only be entitled to terminate the usufruct and request the return of the property if the harmful conduct of the usufructuary seriously affects the value of the property.38 In case of termination, the nude owner is obliged to hand over the net income of the property to the usufructuary every year (Civil Code, art. 1482).
The nude owner can obtain a preliminary and urgent court order to stop harmful acts which diminish the value of the property. However, the offending usufructuary cannot be placed under management of the court or a professional manager. The most effective way to defend the property will thus be to terminate the usufruct.
The abovementioned also applies to a right of use, a right of habitation
(Civil Code, art. 1490) and a hereditary building lease (superÞcies) (Civil Code, art. 1536 no. 1a and no. 2).
38Decision of the Court of Appeal of Lisbon of 22.05.2001 [Process 00115367], available at www.dgsi.pt.