Can a Property Owner Mortgage the Property If Another Person Has Lifetime Usufruct of the Property?

Louisiana bases much of the Civil Code on the basic civil law of the Napoleonic Code. The usufruct is a property right that is not ownership but use. Louisiana is a community property state; when one parent dies, the property goes to the children, but the other parent has a lifetime use. The usufructuary is the person with the lifetime use. The usufruct is limited to the life of the usufructuary but is not limited to real property. The usufruct can include movables or immovables under Louisiana law.

Ownership

When a parent dies, the property goes to the children of the deceased under Louisiana community property law, but the remaining parent has the lifetime use of the property until death. Louisiana Civil Code Article 535 defines the usufruct as the real right of limited duration on the property of another. The children are the “naked owners” under the Louisiana Civil Code. The usufruct terminates with the death of the surviving parent, or usufructuary, under Civil Code Article 607, but it can terminate earlier by remarriage.

Mortgage or Lease

The property owner or owners can agree with the usufructuary to mortgage the property, but the usufruct attaches to any proceeds of the sale of the property. The usufructuary can lease or encumber the property, but the lease ends with the death of the usufructuary. The usufructuary is responsible to the property owners for any abuse the property incurred as a result of the lease or encumbrance.

Encumbrances

An encumbrance prior to the usufruct works differently under Louisiana law than one made after the usufruct. The enforcement of an encumbrance made prior to the usufruct terminates the usufruct, but the usufructuary may have an action against the naked owners. A judicial sale of the property denies the usufructuary the right to enjoyment of the property but does not terminate the usufruct.

Sale

Louisiana Civil Code Article 616 governs the sale of the property. The naked owners and usufructuary can agree to sell, or the usufructuary may have the right to make a sale. When a sale occurs, the usufruct terminates but attaches to the money received from the sale, unless the parties agree otherwise. Subtract expenses and taxes from the sale proceeds to calculate the amount due the naked owners at the termination of the usufruct. Civil Code Article 591 allows the property to be sold to pay an estate debt, but the usufruct attaches to any funds remaining after the debt payment. Review the most current version of the Civil Code, as the Louisiana legislature clarified some of the laws in 2010, particularly Article 890 relating to the usufruct of the surviving spouse.

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About the Author

Linda Richard has been a legal writer and antiques appraiser for more than 25 years, and has been writing online for more than 12 years. Richard holds a bachelor's degree in English and business administration. She has operated a small business for more than 20 years. She and her husband enjoy remodeling old houses and are currently working on a 1970s home.