Naked Property Transactions and House-for-pension in Continental Legal System

Abstract

Transfer of the naked ownership restaining usufruct is a way of property allocation in continental legal system. Making use of the flexibility of ownership, the original owners can transfer the naked property to others, and still reserves the rights of enjoyment (usufructus) of things. Thus the ownership and usufruct can be distributed to different subjects. This system originated from the Roman law. In the aging society and in confront with the economic crisis, European countries utilize this mode to achieve the purpose of house-for-pension. In the absence of funds, the elderly divide the houses into two smaller values, sell the naked property and continue to live in the original houses; and investors can purchase a naked property by a relatively small amount. Existing research in China mainly draws lessons from U.S. reverse mortgage system, but owing to a lack of matching financial environment, the practice process is slow. The institutions lack adequate protection of ownership transfer and housing maintenance, and naked property transactions are based on the property law. People can achieve house-forpension through the autonomy of the will, and the purchasers also can obtain sound investment opportunities. The research of this new path is conducive to the advancement of the combination of house-for-pension system and property law in China.