What is bare property?

Bare ownership allows a person to hold title to a property without having the right to use or enjoy it, rights that fall to a third party, called the usufructuary. This phenomenon, often underestimated, has become a crucial tool to optimize the management of real estate, particularly in contexts of succession planning and financial needs of older people.

Bare ownership is a property right that is broken down into two parts: bare ownership and usufructThe bare owner is the legal owner of the property, but cannot use or enjoy it while the usufruct lasts. The usufructuary, for his part, has the right to use and enjoy the property, but is not the legal owner. This breakdown allows for more flexible and efficient management of real estate, especially in situations where the aim is to protect a person's assets while providing liquidity.

Origin and evolution of bare ownership

Bare ownership has its roots in Roman law, one of the fundamental foundations of modern civil law. In ancient Rome, property rights were a complex concept that was broken down into three main elements: usus (use), fructus (fruit) and abusus (disposition). These elements allowed for a flexible division of rights over a property, which laid the groundwork for the development of bare ownership and usufruct.

In Roman law, full ownership (dominion) was considered to be the set of rights to use, enjoy and dispose of a property. However, Roman law allowed these rights to be divided and granted to different people. For example, a father could give the right to use and enjoy a property to his son, while reserving the right of disposal. This division allowed for more flexible management adapted to the needs of families and communities.

Today, Bare ownership is used in a wide variety of situations, but it is particularly relevant in the realm of estate planning. For example, it is common for parents to transfer ownership of their home to their children while reserving a life estate. This strategy allows parents to ensure that their children inherit the property, while ensuring their right to live in it until their death. In this way, the family estate is protected and the parents' security and well-being are assured in their old age.

Bare ownership, tokenization and home buying with cryptocurrencies

And all this is important to know because, on the other hand, bare ownership can be applied in various ways in the real estate ecosystem, offering innovative and flexible solutions for the management of real estate. One of the most relevant applications today is its Integration with cryptocurrencies and blockchain technologies, allowing for greater transparency, security and efficiency in real estate transactions.

Tokenization of bare ownership

Recall that tokenization is the process of converting a physical asset into a digital token that represents a fraction of that asset. In the context of bare ownership, tokenization allows ownership of a real estate property to be divided into multiple tokens, each representing a fraction of the bare ownership. This makes real estate investment easier for a larger number of investors, as it is not necessary to acquire the entire property.

For example, a property valued at €500.00 could be tokenized into 50.000 tokens, each representing €10 of value. These tokens can be bought and sold on cryptocurrency platforms, allowing investors to access real estate investment with smaller amounts of money.

application example

A cryptocurrency platform dedicated to the real estate sector could implement the tokenization of bare ownership as follows:

1. Tokenization of real estate: Property is tokenized on a blockchain platform, creating tokens that represent fractions of the bare ownership.
2. Token sale: Tokens are put up for sale on the platform, allowing investors to purchase fractions of the bare ownership.
3. Transaction management: The platform facilitates transaction management, ensuring that tokens are transferred securely and in compliance with legal requirements.
4. Rights and obligations: Investors who purchase tokens have rights and obligations defined in the smart contract, which ensures transparency and compliance with the agreed terms.

Conclusion

Bare ownership, in combination with cryptocurrencies and blockchain technologies, offers an innovative and flexible solution for real estate management. It allows property owners to monetize their properties while retaining the right of use and enjoyment. For investors, it offers an opportunity to access real estate investment with greater liquidity and transparency. As the cryptocurrency market continues to evolve, the integration of these technologies into the real estate sector will become increasingly important, transforming the way real estate is managed and transacted.