Spain: Surface right, usufruct and agricultural lease

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​​​​​​​​​​​​​​published on 5​ July 2024 | reading time approx. 3 minutes

 

In transactions involving the provision of land to another party, such as for farming, renewable energy projects, or construction, determining the most appropriate legal structure is crucial. Below is a concise analysis of the most relevant options from a civil law perspective.   
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Surface right

Let's begin with the figure that most closely resembles the right of ownership: the surface right, regulated in Royal Legislative Decree 7/2015​, of 30 October, which approves the Law on Land and Urban Rehabilitation.

Article 53, paragraph 1, of this RDL states that “the surface right grants the “superficiario” the right to construct or build on the ground, surface, and subsoil of another's property, maintaining temporary ownership of the constructions or buildings erected.”

This definition clearly attributes to the “superficiario”, the person holding the surface right, a temporary property right over the constructions or buildings they create on the land, while the original owner retains ownership of the land (“dominus soli”).

The second paragraph of the same article specifies that it is irrelevant whether these constructions or buildings existed before the establishment of the right (original temporary ownership) or were built afterward (anticipated temporary ownership).

This right may be granted for a fee or free of charge, but in any case, it must be formalized in a public deed and registered in the Spanish Property Registry to be validly constituted (constitutive registration), in accordance with article 53.2 of RDL 7/2015. The deed of constitution must delineate the surface area determined by topographic measurement and specify the term of duration, which has a maximum limit of 99 years. ​

Usufruct

In contrast to the surface right, a usufruct (Articles ​467 to 522 of the Spanish Civil Code​) does not confer ownership status upon the usufructuary. However, the practical use of the property can be quite similar to ownership, depending on the specific agreement between the parties, which can grant either broad or restricted rights of use and enjoyment.

The usufruct, allowing use of the property while preserving its form and substance, may be established against payment or free of charge.

In the case of a free usufruct, it must be formalized through a deed in accordance with Article 633 of the Civil Code. Although registration in the Property Registry is not mandatory, it is advisable for publicity and legal certainty for both the usufructuary and the bare owner. The area must be delimited by topographical measurement.

Regarding the term, there is a significant difference compared to the surface right. While a natural person can hold a usufruct for life, a legal entity can only enjoy the right of usufruct for a maximum period of 30 years. 

Agricultural lease ​

Agricultural leasing differs significantly from the other types mentioned, as it is limited to agricultural, livestock, or forestry use, as stipulated in Article 44 of Royal Decree 1624/1992 (VAT Regulation​).

In contrast to the other two legal concepts, it is not possible to agree on a lease for free; a consideration in the form of a price or rent is always required.

The agricultural lease contract must have a minimum duration of five years. Additionally, if the lessee is a legal entity, its corporate purpose must include the carrying out of agricultural activities or, where appropriate, complementary activities in the rural environment, in accordance with its articles of association. Otherwise, the lease would fall outside the scope of application of La​w 49/2003​, of 26 November, on Agricultural Leases.

If a leasing relationship is sought, but the property is not intended to be used for agricultural, livestock or forestry purposes, it can be considered as a lease for use other than as a dwelling, regulated in Title III of Law 29/1994​, of 24 November, on Urban Leases.

Final considerations​

In summary, the choice between the three options – surface right, usufruct, and agricultural lease – depends on several specific factors, such as the type of activity the economic operator wishes to undertake, the state of development of their project, the expected duration of its implementation, and the nature of the relationship between the parties involved.

In practice, especially in the field of renewable energy projects, it is common to opt for the constitution of a surface right. This option provides the landowner with great flexibility to develop their project, with a term of up to 99 years, making it ideal for long-term projects that require stability and room for maneuver.

On the other hand, usufruct and agricultural lease have different characteristics that may be more appropriate depending on the nature of the project. Usufruct allows temporary enjoyment of the property, with certain limitations on its duration if the usufructuary is a legal entity. Meanwhile, agricultural leasing is restricted to agricultural, livestock, or forestry purposes and requires financial consideration.
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