I. Introduction

A Deed of Usufruct and a Special Power of Attorney are frequently used in Philippine property, family, business, estate, and land transactions. Both documents can be powerful, but both can also create serious legal risks if drafted vaguely, notarized improperly, used beyond their intended purpose, or signed without understanding their consequences.

A usufruct gives a person the right to enjoy, use, and receive the fruits or benefits of property owned by another, while preserving the owner’s naked title. A Special Power of Attorney, or SPA, authorizes another person to perform specific acts on behalf of the principal. When these two instruments appear together, the arrangement may involve management of real property, use of land or a house, collection of rentals, sale or lease authority, representation before government offices, tax processing, transfer of title, estate administration, or family property arrangements.

A legal review of these documents should determine whether they are valid, enforceable, complete, properly notarized, registrable, tax-compliant, and consistent with the parties’ true intention. The review should also identify possible problems such as hidden donation, unauthorized sale authority, excessive agency powers, conflict with succession rights, defective property description, lack of spousal consent, lack of co-owner consent, improper notarization, tax exposure, or possible fraud.

II. What Is a Deed of Usufruct?

A usufruct is a real right that allows one person, called the usufructuary, to enjoy the property of another person, called the owner or naked owner, with the obligation to preserve its form and substance unless the title constituting the usufruct or the law provides otherwise.

In simple terms, the owner keeps ownership, but the usufructuary receives the right to use and enjoy the property.

Examples:

A parent allows a child to live in and use a house for life.
A landowner allows a relative to cultivate land and receive harvests.
A property owner gives a spouse or sibling the right to receive rental income.
An estate plan gives one person lifetime use of property while another person owns the title.
A corporation grants use of equipment or land to another person without transferring ownership.
Co-owners allow one co-owner or third person to possess and benefit from the property.

A usufruct may cover real property, personal property, rights, shares, crops, rentals, business assets, or other property capable of use and enjoyment.

III. What Is a Special Power of Attorney?

A Special Power of Attorney is a document by which a person, the principal, authorizes another person, the attorney-in-fact, to perform specific acts on the principal’s behalf.

An SPA is usually required for acts that are legally significant, such as:

Selling real property;
Mortgaging property;
Leasing property for more than one year;
Collecting money;
Signing contracts;
Accepting or repudiating inheritance;
Representing a person before government offices;
Filing tax documents;
Registering documents with the Registry of Deeds;
Managing bank or business transactions;
Claiming documents;
Appearing in administrative proceedings.

Unlike a general authorization letter, an SPA should identify the specific powers granted. The more serious the transaction, the more specific the SPA must be.

IV. Why Legal Review Is Important

A Deed of Usufruct and SPA should be reviewed carefully because they may affect:

Ownership rights;
Possession and use of real property;
Rental income;
Tax liability;
Succession and inheritance;
Co-ownership rights;
Spousal property rights;
Third-party rights;
Land registration records;
Sale, lease, mortgage, or encumbrance of property;
Authority to bind another person;
Risk of fraud or misuse.

A poorly drafted deed or SPA can result in disputes, title problems, rejected registration, tax assessments, unauthorized transactions, court cases, or family conflict.

Part One: Legal Review of a Deed of Usufruct

V. Nature of Usufruct Under Philippine Law

Usufruct separates ownership into two interests:

Naked ownership The owner retains title but cannot fully enjoy the property while the usufruct exists.
Usufructuary right The usufructuary may use the property and receive fruits or benefits, subject to preservation and legal limits.

The usufructuary does not become the owner. The usufructuary generally cannot sell the property itself, although he or she may be able to transfer or lease the usufructuary right depending on the terms and law.

VI. Parties to a Deed of Usufruct

A deed of usufruct should clearly identify:

A. Owner or Grantor

This is the person who owns the property and grants the usufruct. The grantor must have legal capacity and authority to burden the property.

If the property is owned by spouses, co-owners, heirs, a corporation, partnership, or estate, additional consents or authority may be required.

B. Usufructuary

This is the person who receives the right to use and enjoy the property. The usufructuary may be an individual, corporation, association, heir, spouse, child, relative, or third party.

The deed should state whether the usufructuary is receiving the right personally, jointly with others, or for the benefit of another.

C. Third Parties

A usufruct may affect lessees, occupants, mortgagees, heirs, buyers, creditors, and future transferees. A legal review should check whether third-party rights are affected.

VII. Subject Matter of the Usufruct

The deed should clearly describe the property.

For real property, include:

Transfer Certificate of Title or Original Certificate of Title number;
Condominium Certificate of Title number, if applicable;
Tax Declaration number;
Lot number;
Survey number;
Location;
Area;
Boundaries;
Registered owner;
Improvements included;
Whether the usufruct covers land only, building only, both land and building, or specific portions.

For personal property, include:

Description;
Serial numbers;
Quantity;
Condition;
Location;
Ownership proof.

For rights or income, identify:

Source of income;
Account or contract;
Scope of collection rights;
Duration;
Whether only fruits are covered or use is also covered.

A vague property description may make the deed difficult to enforce or register.

VIII. Types of Fruits Covered

A usufruct gives the usufructuary the right to enjoy the fruits of the property unless the deed provides otherwise.

Fruits may include:

Natural fruits Products of land or animals, such as crops, fruits, livestock offspring.
Industrial fruits Products from cultivation or labor, such as harvests from farm operations.
Civil fruits Rents, lease payments, interest, dividends, or other income.

For real property, the most common civil fruit is rental income. The deed should state whether the usufructuary may collect rent, keep rent, enter lease contracts, or merely occupy the property.

IX. Scope of Use

A deed of usufruct should specify what the usufructuary may do with the property.

Examples:

Reside in the property;
Use the property as family home;
Lease the property;
Cultivate the land;
Collect rentals;
Operate a business;
Use parking spaces;
Use common areas;
Harvest crops;
Install improvements;
Maintain animals or equipment;
Allow relatives or employees to occupy;
Sublease;
Transfer the usufructuary right.

The deed should also state prohibited uses, such as:

Selling the property;
Mortgaging the property;
Demolishing structures;
Changing land use;
Constructing without approval;
Subleasing without consent;
Using the property for illegal activity;
Causing waste or deterioration;
Excluding the owner from inspection;
Transferring possession to unauthorized persons.

X. Duration of Usufruct

The duration is one of the most important terms.

A usufruct may be:

For a fixed period Example: ten years.
For the lifetime of the usufructuary Common in family and estate arrangements.
Until a condition occurs Example: until the youngest child graduates.
For as long as the property is used for a specific purpose Example: while used as a residence of the grantor’s parent.
In favor of a juridical person If the usufruct is granted to a corporation or other juridical entity, legal limits on duration should be considered.

The deed should clearly state when the usufruct begins and ends.

XI. Lifetime Usufruct

A lifetime usufruct is common in family arrangements. For example, a parent transfers ownership to children but reserves the right to use the property for life, or a property owner gives a surviving spouse lifetime use.

A legal review should check:

Whose lifetime controls the duration;
Whether the usufruct ends upon death of the usufructuary;
Whether it can be inherited;
Whether it can be assigned;
Whether it terminates upon remarriage, abandonment, non-use, or violation;
Whether the owner may sell the naked ownership during the usufruct;
Whether the buyer will be bound by the usufruct.

Lifetime usufruct should be registered on the title if it affects registered land and is intended to bind third parties.

XII. Usufruct for a Fixed Term

For a fixed-term usufruct, review:

Start date;
End date;
Renewal;
Early termination;
Conditions for extension;
Whether the term is definite enough;
Whether registration will reflect the term;
Tax consequences of the grant.

If the term is long, future buyers, heirs, and creditors may be affected.

XIII. Conditional Usufruct

A usufruct may depend on a condition. The deed should avoid vague conditions.

Problematic language:

The usufruct shall continue until the beneficiary no longer needs the property.

Better language:

The usufruct shall continue until the beneficiary reaches the age of twenty-five years or completes a bachelor’s degree, whichever occurs first.

Ambiguous conditions create disputes.

XIV. Rights of the Usufructuary

The usufructuary may generally have the right to:

Possess the property;
Use the property;
Enjoy the fruits;
Collect rentals or income, if included;
Lease the usufructuary right, if allowed;
Make useful improvements, subject to limits;
Be protected against unlawful disturbance;
Recover possession from unauthorized occupants;
Require respect for the usufruct by the naked owner;
Use legal remedies to protect the usufruct.

However, these rights are limited by the duty to preserve the property and comply with the deed.

XV. Obligations of the Usufructuary

A legal review should confirm that the deed addresses the usufructuary’s duties. These may include:

Preserve the form and substance of the property;
Use the property as a prudent person would;
Make an inventory;
Give security, unless waived;
Pay ordinary expenses;
Pay ordinary repairs;
Pay certain taxes or charges, depending on agreement and law;
Avoid waste;
Return the property at the end of the usufruct;
Notify the owner of urgent repairs or claims;
Respect existing leases or encumbrances;
Avoid unauthorized alterations.

The deed should clearly allocate expenses.

XVI. Inventory Requirement

A usufructuary may be required to make an inventory before taking possession. This is especially important for:

Houses with furniture;
Farms with equipment;
Commercial property;
Rental units;
Personal property;
Estate property;
Properties with existing tenants;
Assets likely to deteriorate.

The deed may waive inventory, but waiver should be intentional. Without inventory, disputes may arise over condition and contents.

XVII. Security or Bond

A usufructuary may be required to give security to protect the owner against loss, damage, or misuse. In family arrangements, this is often waived.

A legal review should ask:

Is security required?
Is it waived?
If waived, is the owner protected?
Is the usufructuary financially capable of maintaining the property?
Are there valuable movable items involved?
Are there tenants and rental collections?
Is the usufructuary allowed to lease the property?

A waiver may be acceptable, but it carries risk.

XVIII. Repairs and Maintenance

The deed should allocate responsibility for:

Ordinary repairs;
Extraordinary repairs;
Structural repairs;
Roof, plumbing, electrical systems;
Association dues;
Insurance;
Pest control;
Security;
Utilities;
Real property tax;
Condominium dues;
Subdivision dues;
Major improvements.

A common arrangement is for the usufructuary to pay ordinary repairs and expenses of use, while the owner pays extraordinary repairs. But the parties may agree otherwise, subject to law and fairness.

XIX. Taxes and Charges

The deed should address:

Real property tax;
Capital gains tax or donor’s tax, if applicable;
Documentary stamp tax;
Registration fees;
Transfer tax, if any;
Income tax on rentals;
Value-added tax or percentage tax, if commercial;
Association dues;
Insurance premiums.

A usufruct may have tax implications, especially when created gratuitously, transferred, reserved in a sale or donation, or used to collect rental income.

XX. Insurance

If the property is valuable, the deed should state who must insure it.

Questions:

Is fire insurance required?
Who pays premiums?
Who is beneficiary of insurance proceeds?
What happens if property is destroyed?
Does usufruct continue over insurance proceeds or replacement property?
Does the usufructuary have insurable interest?

Without clear terms, insurance disputes may arise.

XXI. Improvements

The usufructuary may want to improve the property. The deed should state:

Whether improvements are allowed;
Whether owner’s written consent is needed;
Who owns improvements after termination;
Whether reimbursement is allowed;
Whether removal is allowed;
Whether permits are required;
Whether improvements may alter the property’s form or substance;
Whether useful, luxurious, or necessary improvements are treated differently.

Example clause:

The usufructuary may not make structural alterations, demolitions, or permanent improvements without prior written consent of the naked owner.

XXII. Lease by the Usufructuary

A usufructuary may be able to lease the property or usufructuary right, but the deed should control this carefully.

Review:

Is leasing allowed?
Maximum lease term?
Must lease end when usufruct ends?
Are rentals for usufructuary?
Can usufructuary collect security deposits?
Who signs lease contracts?
Who handles tenants?
What happens to existing leases?
Is owner approval required?
Are commercial uses allowed?

A usufructuary should not grant lease rights beyond the usufruct period unless the owner also agrees.

XXIII. Sale of Naked Ownership

The naked owner may sell the property subject to the usufruct, unless restricted. The buyer generally acquires ownership subject to the existing usufruct if properly registered or known.

Review whether the deed:

Allows sale by the naked owner;
Requires notice to usufructuary;
Protects the usufruct if property is sold;
Allows usufructuary right of first refusal;
Requires annotation on title.

If the usufruct is not registered, a buyer may dispute being bound if acting in good faith.

XXIV. Sale or Transfer of Usufructuary Rights

Can the usufructuary transfer his or her usufructuary right? The answer depends on law and the deed.

The deed should state:

Whether assignment is allowed;
Whether consent of owner is required;
Whether transfer is limited to family members;
Whether the right is strictly personal;
Whether it terminates upon transfer;
Whether subleasing is allowed.

For family arrangements, the grantor often intends the usufruct to be personal and non-transferable. That should be expressly written.

XXV. Mortgage or Encumbrance

A usufructuary generally cannot mortgage the owner’s title unless specially authorized. The usufructuary may not burden naked ownership without the owner’s consent.

A legal review should watch for language allowing the usufructuary or attorney-in-fact to:

Mortgage;
Pledge;
Encumber;
Sell;
Donate;
Lease long-term;
Create easements;
Subdivide;
Consolidate;
Transfer title.

These powers may go far beyond ordinary usufruct and may expose the owner to serious risk.

XXVI. Termination of Usufruct

A deed should specify termination events. Usufruct may end by:

Death of usufructuary;
Expiration of term;
Fulfillment of resolutory condition;
Merger of ownership and usufruct in one person;
Renunciation by usufructuary;
Total loss of property;
Termination of right of grantor, in some cases;
Prescription;
Court judgment;
Breach of deed, if provided;
Mutual agreement.

The deed should state the procedure after termination, including turnover, accounting, inspection, and cancellation of annotation.

XXVII. Renunciation or Waiver of Usufruct

If the usufructuary gives up the usufruct, a deed of waiver or renunciation may be needed. If the usufruct is registered on title, cancellation or annotation may be required at the Registry of Deeds.

Review whether the original deed allows voluntary waiver and how it should be documented.

XXVIII. Death of Usufructuary

If usufruct is personal and lifetime-based, it usually ends upon death of the usufructuary. The heirs of the usufructuary generally do not inherit the usufruct unless the deed and law allow continuation.

The owner may need:

Death certificate;
Affidavit or deed of cancellation;
Registry of Deeds annotation cancellation;
Tax clearance or assessor update, if needed.

XXIX. Death of Naked Owner

If the owner dies while usufruct exists, the owner’s heirs inherit naked ownership subject to the usufruct. The usufruct generally continues unless the deed provides otherwise.

This is a common estate planning feature. Review should check whether heirs understand that they receive ownership but cannot fully possess or enjoy the property until usufruct terminates.

XXX. Usufruct and Co-Owned Property

If property is co-owned, one co-owner cannot grant usufruct over the entire property without authority from all co-owners. A co-owner may grant rights only over his or her ideal share, but practical possession of a specific portion may require consent or partition.

Review:

Are there multiple registered owners?
Did all co-owners sign?
Is there an extrajudicial settlement?
Is the property still in the name of deceased parents?
Are there heirs who did not consent?
Does the usufruct cover entire property or only a share?
Is there a partition agreement?

A usufruct over co-owned property without full consent can cause disputes.

XXXI. Usufruct Over Conjugal or Community Property

If the property belongs to spouses under community or conjugal property regimes, both spouses may need to consent. One spouse may not validly burden conjugal or community property alone in many cases.

Review:

Is the property titled in one spouse’s name but acquired during marriage?
Does the title indicate “married to”?
Was spousal consent obtained?
Is there a prenuptial agreement?
Is the property exclusive or conjugal/community?
Was the usufruct granted to a third person?
Does the transaction prejudice the family home?

Lack of spousal consent can create validity issues.

XXXII. Usufruct and Family Home

If the property is a family home, restrictions may apply. A legal review should check:

Is the property actually used as family residence?
Is it constituted as a family home by law?
Are spouse and family members affected?
Does the usufruct deprive the family of occupancy?
Is there consent from necessary parties?
Are there minor children affected?

A deed of usufruct should not be used to defeat family home protections.

XXXIII. Usufruct and Succession

Usufruct is often used in estate planning. Examples:

A parent donates naked ownership to children but reserves lifetime usufruct.
A testator gives usufruct to spouse and naked ownership to children.
Heirs agree that one sibling may enjoy property during life.
A surviving parent retains use of home while children hold title.

Review should consider:

Compulsory heirs;
Legitimes;
Collation;
Donations inter vivos;
Donations mortis causa;
Wills;
Estate tax;
Partition;
Rights of surviving spouse;
Rights of illegitimate children;
Rights of creditors.

A usufruct should not impair legitimes or be used to disguise an invalid testamentary disposition.

XXXIV. Usufruct as Donation

If usufruct is granted gratuitously, it may be considered a donation of a property right. Formalities and tax consequences may apply.

Review:

Is the usufruct free or for consideration?
If free, does it comply with donation formalities?
Was it accepted by the usufructuary?
Is acceptance in the same deed or separate public instrument?
Was donor’s capacity established?
Does it impair legitime?
Was donor’s tax considered?
Is registration possible?

A deed labeled “usufruct” may still be a donation if granted without consideration.

XXXV. Usufruct for Consideration

If the usufructuary paid for the usufruct, the deed should state the consideration. This may resemble a lease, sale of usufructuary rights, or other onerous contract.

Review:

Amount paid;
Payment terms;
Tax treatment;
Default remedies;
Whether consideration is adequate;
Whether transaction disguises sale;
Whether value should be appraised;
Whether VAT or income tax applies.

XXXVI. Usufruct Versus Lease

Usufruct and lease are different.

Usufruct

A real right if properly constituted and registered;
Gives right to use and enjoy fruits;
May be gratuitous or onerous;
Can burden ownership;
May be lifetime or long-term;
Usufructuary has preservation obligations.

Lease

Usually a personal right unless registered or long-term;
Lessee pays rent;
Use is governed by lease terms;
Less extensive than usufruct;
Does not split ownership.

If the arrangement is really a lease, calling it usufruct may create confusion and tax issues.

XXXVII. Usufruct Versus Right of Use or Habitation

A right of use or habitation is narrower than usufruct. If the intention is only to allow residence, a right of habitation or occupancy agreement may be more appropriate than full usufruct.

Review:

Does the beneficiary need rental income or only residence?
Can beneficiary lease the property?
Can beneficiary collect fruits?
Is the right personal and non-transferable?
Is the owner retaining broader control?

Granting full usufruct when only habitation was intended can create unintended rights.

XXXVIII. Usufruct Versus Sale With Reserved Usufruct

Sometimes a property owner sells or donates ownership but reserves usufruct. This means the transferee gets naked ownership, while the transferor retains use and fruits.

Review:

Is there a deed of sale or donation?
Is usufruct reserved clearly?
Is the reservation annotated on title?
Are taxes on sale/donation paid?
Does buyer understand possession is deferred?
Does the usufruct end on death or date?
Who pays real property tax and repairs?

This structure is common in family transfers but must be drafted carefully.

XXXIX. Registration of Usufruct

For real property, a usufruct should generally be registered with the Registry of Deeds to bind third parties and appear as an encumbrance on the title.

Review:

Is the property registered land?
Is the deed notarized?
Are documentary stamp tax and registration fees paid?
Is the title available?
Are there existing mortgages or liens?
Is mortgagee consent required?
Does the Registry of Deeds accept the document?
Is annotation wording correct?

Unregistered usufruct may bind the parties but may not protect the usufructuary against innocent third-party buyers or mortgagees.

XL. Requirements for Registration

The Registry of Deeds may require:

Notarized deed;
Owner’s duplicate title;
Tax clearance or real property tax clearance, if applicable;
Certificate authorizing registration, if tax-triggering transaction;
Documentary stamp tax proof;
Valid IDs;
Special Power of Attorney, if signed by representative;
Corporate authority, if corporation;
Marriage consent documents, if needed;
Other documents depending on transaction.

A legal review should check registrability before signing.

XLI. Tax Issues in Usufruct

Tax treatment depends on the transaction. Possible taxes and fees include:

Documentary stamp tax;
Donor’s tax, if gratuitous;
Capital gains tax, if associated with transfer of ownership;
Income tax on rental income;
VAT or percentage tax in business context;
Registration fees;
Transfer tax, if ownership transfer occurs;
Real property tax;
Estate tax implications.

The parties should not assume that a usufruct is tax-free. The deed’s economic substance matters.

XLII. Usufruct and Rental Income

If the usufructuary receives rental income, review:

Who reports rental income for tax purposes?
Who issues receipts?
Who withholds taxes, if applicable?
Who pays expenses?
Are tenants notified?
Are leases assigned or amended?
Does the usufructuary have authority to sue tenants?
Are security deposits transferred?

A usufruct over rental property should include accounting provisions.

XLIII. Accounting and Reporting

If the usufructuary collects income, the deed may require accounting.

Questions:

Must the usufructuary submit reports?
Must receipts be issued?
Who keeps books?
Must the owner inspect records?
Are expenses deducted before fruits are retained?
What happens to unpaid rent at termination?
Who collects receivables after termination?

Without accounting provisions, disputes are likely.

XLIV. Possession and Turnover

The deed should state:

Date of turnover;
Existing occupants;
Keys and access;
Inventory;
Utilities;
Condition of property;
Documents delivered;
Tenant deposits;
Rental records;
Maintenance obligations.

For real property, a physical turnover document is useful.

XLV. Existing Tenants

If the property has tenants, review:

Are leases valid and existing?
Who is landlord after usufruct?
Must tenants pay rent to usufructuary?
Are tenants notified in writing?
Who holds security deposits?
Who handles eviction?
Does usufruct override lease?
Does lease term exceed usufruct?

The deed should not ignore existing leases.

XLVI. Existing Mortgage or Lien

If property is mortgaged, granting usufruct may violate mortgage terms or require mortgagee consent.

Review:

Is the title encumbered?
Does mortgage prohibit further encumbrance?
Will bank consent be needed?
Can usufruct be annotated?
What happens if property is foreclosed?
Does usufruct survive foreclosure?
Did usufructuary accept risk?

A usufruct over mortgaged property can be precarious.

XLVII. Ejectment and Protection of Possession

A usufructuary may need authority to protect possession. The deed should state whether the usufructuary may:

Demand rent;
Send notices;
File ejectment cases;
Sue trespassers;
Represent owner in barangay proceedings;
Hire counsel;
Settle tenant disputes.

If litigation authority is needed, an SPA may be required.

Part Two: Legal Review of a Special Power of Attorney

XLVIII. Nature of Authority in an SPA

An SPA creates agency. The attorney-in-fact may bind the principal only within the authority granted.

A legal review should determine:

Who is the principal?
Who is the attorney-in-fact?
What powers are granted?
Are the powers specific enough?
Are the acts legally allowed?
Does the SPA comply with formalities?
Is the SPA still valid?
Has it been revoked?
Is there conflict of interest?
Does the attorney-in-fact have authority to sign the deed of usufruct?

XLIX. SPA Must Be Strictly Construed

Special powers are generally interpreted strictly. If the SPA authorizes one act, it does not automatically authorize another.

For example:

Authority to manage property does not automatically include authority to sell.
Authority to collect rent does not automatically include authority to mortgage.
Authority to claim documents does not automatically include authority to sign a deed of usufruct.
Authority to lease may not include authority to grant usufruct.
Authority to sign tax forms may not include authority to transfer property rights.

The SPA should expressly include the intended act.

L. SPA for Granting Usufruct

If a representative signs a deed of usufruct for the owner, the SPA should specifically authorize creation of usufruct.

Recommended authority:

To execute, sign, acknowledge, deliver, and register a Deed of Usufruct over the property covered by Transfer Certificate of Title No. ______, under such terms and conditions as stated in the deed, including the authority to submit the deed for notarization, tax assessment, and registration with the Registry of Deeds.

A general authority to administer property may be challenged as insufficient to create a real right of usufruct.

LI. SPA for Accepting Usufruct

If the usufructuary cannot personally sign and another person accepts on his or her behalf, the SPA should authorize acceptance.

This is especially important if the usufruct is gratuitous and treated as a donation requiring acceptance.

Recommended authority:

To accept on my behalf the grant of usufruct over the property described as ______, to sign the Deed of Usufruct and all related documents, and to perform all acts necessary for its registration and implementation.

LII. SPA for Registration

If the attorney-in-fact will register the deed, include authority to:

Pay taxes and fees;
Submit documents to BIR, assessor, treasurer, and Registry of Deeds;
Claim tax certificates;
Present owner’s duplicate title;
Receive annotated title;
Sign forms;
Follow up applications.

Registration often requires multiple offices. The SPA should be broad enough for implementation.

LIII. SPA Involving Real Property

For real property transactions, the SPA must be carefully drafted. It should identify:

Property title number;
Registered owner;
Location;
Authority granted;
Whether sale, lease, mortgage, usufruct, partition, or registration is allowed;
Whether attorney-in-fact may receive money;
Whether attorney-in-fact may sign deeds;
Whether attorney-in-fact may appoint substitutes;
Duration.

A vague SPA is risky and may be rejected by notaries, buyers, banks, BIR, or Registry of Deeds.

LIV. SPA to Sell Versus SPA to Grant Usufruct

Authority to sell and authority to grant usufruct are different.

An attorney-in-fact authorized to sell may not necessarily be authorized to grant a usufruct. Conversely, authority to grant usufruct does not authorize sale.

Review should ensure the actual intended transaction is specifically named.

LV. SPA to Lease Versus SPA to Grant Usufruct

A lease and a usufruct are different legal arrangements. Authority to lease does not automatically authorize creation of usufruct. A long-term usufruct can burden ownership more significantly than a lease.

If the principal intends to grant usufruct, the SPA should say “usufruct,” not merely “lease,” “administer,” or “manage.”

LVI. SPA to Manage Property

Management powers may include:

Collecting rent;
Paying taxes;
Repairing property;
Hiring caretakers;
Renewing permits;
Dealing with tenants.

Management does not necessarily include:

Selling;
Donating;
Mortgaging;
Granting usufruct;
Waiving ownership rights;
Partitioning property;
Accepting settlement;
Binding principal to long-term encumbrances.

If the SPA is only for management, a deed of usufruct signed under it may be questionable.

LVII. SPA and Self-Dealing

A major red flag arises when the attorney-in-fact signs a deed in favor of himself or herself.

Example:

Owner gives SPA to agent.
Agent signs Deed of Usufruct granting usufruct to the same agent.

This is self-dealing and may be challenged unless the SPA clearly authorizes it and the principal understood the transaction. Courts and registries may scrutinize it.

Review should ask:

Is the attorney-in-fact also the beneficiary?
Did the principal expressly authorize self-dealing?
Was there independent advice?
Was consideration paid?
Is the principal elderly or vulnerable?
Are heirs prejudiced?
Is there undue influence?

LVIII. SPA and Conflict of Interest

Conflict of interest exists when the attorney-in-fact’s personal interest conflicts with the principal’s interest.

Examples:

Agent grants usufruct to himself;
Agent grants usufruct to spouse or child;
Agent leases property to his own company;
Agent waives rentals owed by himself;
Agent collects rent and fails to account;
Agent signs terms more favorable to himself than principal.

The SPA should avoid or expressly regulate conflicts.

LIX. SPA and Substitution

An SPA may allow the attorney-in-fact to appoint a substitute. This can be useful but risky.

Review:

Is substitution allowed?
Is substitute identified?
Can substitute sign deeds?
Is principal’s consent required?
Is substitute liable?
Are documents registrable if signed by substitute?

For real property, substitution authority should be clear.

LX. SPA Validity Period

An SPA may have no expiration date, but offices may require a recent SPA. Also, the principal may revoke it.

Review:

Date of execution;
Expiration clause;
Whether principal is still alive;
Whether principal still has capacity;
Whether principal revoked it;
Whether purpose has already been completed;
Whether attorney-in-fact’s authority survived incapacity, if claimed;
Whether transaction occurred before or after death.

An SPA generally terminates upon death of the principal. A deed signed after the principal’s death under an SPA is highly problematic.

LXI. Principal’s Death

Agency usually ends upon the principal’s death. If the attorney-in-fact signs a deed of usufruct after the principal has died, the deed may be void or unenforceable.

Review should confirm:

Principal was alive at signing;
Notarization date;
Acknowledgment date;
Date of death;
Date of registration;
Authority of heirs or estate representative, if principal had died.

This is critical in estate-related transactions.

LXII. Principal’s Incapacity

If the principal became legally incapacitated after issuing the SPA, validity may become complicated depending on the nature of incapacity and agency rules.

Review:

Was principal competent when signing?
Was principal under guardianship?
Was there dementia, serious illness, or undue influence?
Was the SPA notarized properly?
Was capacity challenged?
Does the transaction appear unfair?

For elderly principals, capacity issues are common grounds for dispute.

LXIII. Notarization of SPA

A notarized SPA should show that the principal personally appeared before the notary, was identified, and acknowledged signing the document.

Review:

Notarial acknowledgment complete?
Competent evidence of identity stated?
Notary commission valid?
Date and place correct?
Notarial seal present?
Document signed on all pages?
No blanks or suspicious insertions?
Principal personally appeared?
Witnesses present, if needed?

Defective notarization can affect admissibility, registrability, and validity.

LXIV. SPA Executed Abroad

If the SPA was executed abroad for use in the Philippines, review whether it was:

Acknowledged before a Philippine Embassy or Consulate; or
Notarized by a foreign notary and apostilled, if applicable; or
Properly authenticated or legalized under applicable rules.

An ordinary foreign notarization without apostille or consular authentication may be rejected by Philippine offices.

LXV. SPA in a Foreign Language

If the SPA is in a foreign language, a certified translation may be required. The receiving office must understand the powers granted.

For Philippine real property transactions, English or Filipino is usually advisable.

LXVI. SPA for Corporate Principal

If the principal is a corporation, an SPA may need to be supported by:

Board resolution;
Secretary’s certificate;
Articles and by-laws;
Corporate secretary certification;
Valid corporate IDs and signatory IDs.

Review:

Did the corporation authorize the transaction?
Did the signatory have authority?
Is usufruct within corporate powers?
Is board approval required?
Is shareholder approval required?
Is the transaction with a related party?
Is it ultra vires or prejudicial?

LXVII. SPA for Co-Owners

If property is co-owned, each co-owner should sign or issue an SPA. One co-owner cannot authorize encumbrance of the whole property without authority from others.

Review:

Who are all co-owners?
Did all sign?
Are heirs represented?
Are minors involved?
Is court approval required for minors’ property?
Does SPA cover only an ideal share?

LXVIII. SPA for Spouses

If real property is conjugal or community property, both spouses may need to sign the deed or issue authority.

Review:

Does SPA come from one spouse only?
Is the property exclusive or conjugal/community?
Is the other spouse consenting?
Is the transaction prejudicial to family?
Is the property family home?
Is there legal separation, annulment, or pending case?

LXIX. SPA and Minors

A minor cannot ordinarily execute a valid SPA. If property belongs to a minor, a parent or guardian may need court approval for acts affecting property rights.

Granting usufruct over a minor’s property may require special care and possibly court authority.

LXX. SPA and Heirs

If property remains registered in the name of a deceased person, heirs cannot simply use the deceased’s old SPA. The heirs must settle the estate or properly authorize representatives.

Review:

Is registered owner alive?
Is estate settled?
Are heirs identified?
Did all heirs sign?
Is there extrajudicial settlement?
Are estate taxes paid?
Is there a court-appointed administrator?
Are minor heirs involved?

Part Three: Reviewing the Deed of Usufruct and SPA Together

LXXI. Why the Documents Must Be Read Together

When a Deed of Usufruct is signed through an attorney-in-fact, the deed is only as strong as the authority in the SPA. The reviewer must compare the deed and SPA clause by clause.

Questions:

Does the SPA authorize the deed?
Does the deed exceed the SPA?
Are the parties consistent?
Is the property description consistent?
Is the duration authorized?
Is consideration authorized?
Are registration powers included?
Does the attorney-in-fact benefit personally?
Is the principal’s consent clear?
Are all owners represented?

LXXII. Key Consistency Checks

A legal review should compare:

Item	Deed of Usufruct	SPA
Principal/owner	Must match title owner	Must be owner or authorized person
Attorney-in-fact	Signatory, if representative	Must be named
Usufructuary	Beneficiary	Must be allowed if agent signs
Property	Title, lot, location	Same property should be described
Power granted	Usufruct	SPA must specifically authorize usufruct
Duration	Lifetime/fixed/condition	SPA should allow such terms
Registration	Annotation on title	SPA should authorize registration
Taxes	Who pays	SPA should authorize tax filings/payments
Consideration	Free or paid	SPA should allow receipt/payment if needed
Self-dealing	If agent benefits	SPA must expressly allow or risk challenge

LXXIII. Red Flags in a Deed of Usufruct

Red flags include:

Property description is vague.
Grantor is not registered owner.
Only one spouse signed conjugal/community property.
Only one co-owner signed for entire property.
Usufruct duration is unclear.
Usufructuary can sell or mortgage property.
Deed says usufruct but functions as sale.
No acceptance by usufructuary in gratuitous grant.
No tax provisions.
No repair and expense allocation.
No termination mechanism.
No inventory or security despite valuable assets.
Deed prejudices compulsory heirs.
Deed is signed by representative with insufficient SPA.
Notarization appears defective.
Property has existing mortgage but no bank consent.
Usufruct is not registered but intended to bind third parties.
Deed grants perpetual or indefinite rights without legal clarity.
Deed allows transfer to unknown third parties.
Deed was signed when grantor was ill, elderly, or possibly incapacitated.

LXXIV. Red Flags in an SPA

Red flags include:

SPA does not mention usufruct.
SPA only authorizes document processing or management.
SPA authorizes sale but deed grants usufruct.
SPA is unnotarized.
SPA was executed abroad without apostille or consular acknowledgment.
Principal’s signature is questionable.
Principal was deceased at time of use.
Principal lacked capacity.
Attorney-in-fact is also beneficiary.
SPA is too old and possibly revoked.
Property description missing.
Authority to receive money is vague.
Authority to encumber property is overly broad.
Co-owners or spouse did not sign.
SPA allows substitution without limits.
There are blanks or insertions.
Notary details are suspicious.
Principal did not personally appear before notary.
SPA covers “all properties” without specific identification.
SPA conflicts with later documents.

LXXV. Does an SPA to “Administer” Property Allow Granting Usufruct?

Usually, authority to administer property should not be assumed to include authority to grant usufruct. Granting usufruct creates a real right that burdens ownership. It is more than ordinary administration.

If a deed of usufruct was signed under an SPA that only authorizes administration, the deed may be challenged.

The safer rule: the SPA should expressly authorize “to constitute, grant, execute, and register a deed of usufruct.”

LXXVI. Does an SPA to “Sell” Property Allow Reserving or Creating Usufruct?

Authority to sell may include acts necessary to complete the sale, but creating a usufruct is a separate encumbrance. If the sale deed reserves usufruct for the principal, the authority may be more defensible if necessary to the sale terms. But if the attorney-in-fact grants usufruct to someone else, specific authority is safer and may be required.

Review the transaction structure carefully.

LXXVII. Does an SPA to “Sign Any Document” Suffice?

A broad phrase like “sign any document” may not be enough for specific acts requiring special authority. Philippine legal practice generally requires express authority for serious property acts.

A safer SPA lists the specific act: sale, mortgage, lease, usufruct, partition, donation, acceptance, registration.

LXXVIII. Deed of Usufruct Signed by Attorney-in-Fact in Favor of Principal

Sometimes an attorney-in-fact signs for an owner to grant usufruct to the principal or another intended beneficiary. This may be valid if authority is clear.

Example:

Owner abroad gives SPA to sibling.
Sibling signs deed granting usufruct to owner’s mother.
SPA specifically authorizes deed.

Review should still check family consent, property status, taxes, and registration.

LXXIX. Deed of Usufruct Signed by Attorney-in-Fact in Favor of Himself

This is high-risk. The document may be attacked for self-dealing, breach of fiduciary duty, undue influence, fraud, or lack of specific authority.

For validity, the SPA should be explicit:

To grant, constitute, and execute a usufruct over my property in favor of my attorney-in-fact, [name], under the terms stated in the deed.

Even with explicit authority, the transaction may still be scrutinized if the principal was vulnerable or consideration was unfair.

LXXX. Deed of Usufruct and Donation Issues

A gratuitous deed of usufruct may be treated as donation of a real right. Review should check:

Was the deed in public instrument?
Was there acceptance?
Was acceptance made during donor’s lifetime?
Was donor notified of acceptance if separate?
Was donor’s capacity clear?
Was donor’s legitime impaired?
Were donor’s tax requirements considered?
Was the property properly described?

If donation formalities were not followed, enforceability may be questioned.

LXXXI. Deed of Usufruct as Hidden Sale or Transfer

Some deeds use usufruct language to avoid taxes or transfer restrictions while effectively transferring control.

Red flags:

Usufruct is perpetual or near-perpetual;
Usufructuary pays large consideration equal to property value;
Owner has no meaningful rights left;
Usufructuary can sell, assign, mortgage, or build freely;
Deed prohibits owner from selling or inspecting;
Deed gives heirs of usufructuary continuation rights indefinitely.

The legal and tax substance may be challenged.

LXXXII. Usufruct and Tax Avoidance

A deed should not be drafted to evade taxes. If the real transaction is sale, donation, lease, or inheritance transfer, authorities may examine substance over form.

A legal review should flag tax planning that crosses into evasion.

LXXXIII. Deed of Usufruct Over Agricultural Land

Agricultural land may involve additional restrictions:

Agrarian reform coverage;
Tenant rights;
Department of Agrarian Reform rules;
Restrictions on transfer;
Rights of farmer-beneficiaries;
Land use limitations;
Leasehold rights;
Ancestral domain or indigenous community issues;
Environmental permits.

A usufruct should not violate agrarian laws or tenant protections.

LXXXIV. Deed of Usufruct Over Condominium Unit

Review:

Condominium title;
Master deed restrictions;
Condominium corporation rules;
Association dues;
Leasing restrictions;
Use restrictions;
Parking rights;
Insurance;
Utility obligations;
Registration with Registry of Deeds.

The usufructuary may need to comply with condominium rules.

LXXXV. Deed of Usufruct Over Family Home

If the property is a family home, review carefully. A usufruct granted to a third person may interfere with family occupancy and protections. Spousal consent and family rights may be central.

LXXXVI. Deed of Usufruct Over Property Under Loan

If property is subject to bank loan or mortgage, the bank may restrict encumbrances. Review the loan and mortgage documents before granting usufruct.

LXXXVII. Deed of Usufruct Over Inherited Property

If property is inherited but title not yet transferred, review:

Death certificate;
Will or intestacy;
Extrajudicial settlement;
Estate tax;
Heirs;
Co-ownership;
Pending estate case;
Authority of administrator;
Minor heirs;
Disputes.

A deed signed by only one heir may not bind the entire property.

LXXXVIII. Deed of Usufruct Over Property in Litigation

If property is under litigation, review:

Lis pendens annotation;
Injunctions;
Pending ownership dispute;
Probate or partition case;
Ejectment cases;
Mortgage foreclosure;
Tax delinquency;
Adverse claims.

A usufruct over disputed property may be risky.

LXXXIX. Deed of Usufruct and Adverse Claim

If registration of usufruct is not possible or delayed, a party may consider protective annotations where legally available. However, the proper remedy depends on the document and title status.

Do not use improper annotations to cloud title without legal basis.

XC. Remedies for Defective Deed of Usufruct

If a deed of usufruct is defective, possible remedies include:

Amendatory deed;
Ratification by owner;
New deed with proper parties;
Supplemental agreement;
Cancellation or rescission;
Judicial declaration of nullity;
Reformation of instrument;
Cancellation of annotation;
Damages;
Criminal complaint, if fraud or falsification is involved.

The remedy depends on whether the defect is formal, substantive, or fraudulent.

XCI. Ratification

If an attorney-in-fact exceeded authority, the principal may ratify the act if legally allowed. Ratification should be clear and preferably in a notarized document.

However, ratification may not cure all defects, especially if rights of third persons intervened or required formalities were absent.

XCII. Reformation of Instrument

If the deed does not express the true agreement due to mistake, fraud, inequitable conduct, or accident, reformation may be considered. This is a court remedy and requires proof.

XCIII. Rescission or Cancellation

If the usufructuary violates obligations or the deed was executed through fraud, undue influence, or breach, cancellation or rescission may be pursued depending on the facts and deed terms.

XCIV. Ejectment After Termination

If usufruct terminates and the usufructuary refuses to vacate, the owner may consider ejectment or other property remedies. The owner should first establish termination and demand turnover.

XCV. Accounting Claim

If the usufructuary collected rentals or fruits improperly, the owner may demand accounting and recovery.

XCVI. Criminal Issues

Criminal issues may arise if:

Signatures were forged;
SPA was falsified;
Principal was impersonated;
Notarization was fraudulent;
Attorney-in-fact sold or encumbered property without authority;
Rentals were misappropriated;
Documents were fabricated;
Owner’s duplicate title was unlawfully obtained;
Deed was used to defraud heirs or creditors.

Possible offenses may include falsification, estafa, use of falsified documents, perjury, or related crimes depending on facts.

Part Four: Practical Legal Review Checklist

XCVII. Checklist for the Deed of Usufruct

Review the following:

Full names and details of parties;
Capacity of owner;
Capacity of usufructuary;
Property description;
Title and tax declaration details;
Co-owner consent;
Spousal consent;
Corporate authority, if any;
Existing liens or mortgages;
Existing tenants or occupants;
Nature of usufruct;
Duration;
Start and end dates;
Rights of usufructuary;
Prohibited acts;
Repairs and maintenance;
Taxes and expenses;
Insurance;
Improvements;
Leasing authority;
Assignment or transfer;
Inventory;
Security or waiver;
Accounting;
Termination;
Turnover;
Registration;
Tax treatment;
Notarization;
Acceptance, if gratuitous;
Dispute resolution;
Governing law and venue;
Consistency with other contracts;
Protection against misuse;
Effect on heirs and family members.

XCVIII. Checklist for the SPA

Review:

Identity of principal;
Identity of attorney-in-fact;
Capacity of principal;
Date of execution;
Notarization or consular acknowledgment;
Whether principal was alive and competent;
Specific authority to grant or accept usufruct;
Property description;
Authority to sign deed;
Authority to notarize and register;
Authority to pay taxes and fees;
Authority to receive documents;
Authority to receive money, if any;
Substitution clause;
Validity period;
Revocation status;
Conflict of interest;
Self-dealing authority;
Spousal or co-owner authority;
Corporate authority;
Foreign execution requirements;
ID details;
Page signatures;
Absence of blanks or alterations;
Consistency with deed.

XCIX. Questions to Ask the Client

A proper legal review requires factual questions:

Who owns the property?
Is the title clean?
Is the property conjugal, community, exclusive, or co-owned?
Are there heirs or pending estate issues?
Who will use the property?
For how long?
Is the usufruct free or paid?
Will the usufructuary collect rentals?
Will the usufructuary live there?
Are tenants present?
Who will pay taxes and repairs?
Is the property mortgaged?
Is registration intended?
Is the SPA still valid?
Was the principal abroad?
Did the principal personally sign?
Is the attorney-in-fact also beneficiary?
Are there family disputes?
Is the transaction part of estate planning?
What foreign or government use is intended?

C. Suggested Clauses for a Deed of Usufruct

A. Grant Clause

The Owner hereby grants, constitutes, and establishes in favor of the Usufructuary a usufruct over the property described below, subject to the terms and conditions of this Deed.

B. Property Description Clause

The usufruct shall cover the parcel of land and improvements covered by Transfer Certificate of Title No. ______, located at ______, with an area of ______ square meters, registered in the name of ______, including the residential building and appurtenant improvements thereon.

C. Duration Clause

The usufruct shall commence on ______ and shall continue during the lifetime of the Usufructuary, unless earlier terminated under this Deed or by law.

Or:

The usufruct shall be for a period of ten years from execution of this Deed and shall automatically terminate on ______ without need of demand.

D. Use Clause

The Usufructuary may use the property solely for residential purposes and may not lease, sublease, assign, transfer, mortgage, encumber, demolish, or substantially alter the property without the prior written consent of the Owner.

E. Fruits Clause

The Usufructuary shall be entitled to the civil fruits of the property, including rentals, if the property is leased with the written consent of the Owner.

Or:

The Usufructuary shall have the right of habitation only and shall not be entitled to lease the property or collect rentals.

F. Expenses Clause

The Usufructuary shall pay ordinary expenses for use and occupancy, including utilities, minor repairs, and ordinary maintenance. Extraordinary repairs and structural repairs shall be for the account of the Owner, unless caused by the fault or negligence of the Usufructuary.

G. Inspection Clause

The Owner or authorized representative may inspect the property upon reasonable notice to determine compliance with this Deed.

H. Termination Clause

Upon termination of the usufruct, the Usufructuary shall peacefully vacate and return possession of the property to the Owner, together with all keys, documents, and appurtenances, ordinary wear and tear excepted.

I. Registration Clause

The parties agree that this Deed may be registered and annotated on the certificate of title of the property with the Registry of Deeds.

CI. Suggested Clauses for SPA Related to Usufruct

A. Authority to Grant Usufruct

To constitute, grant, execute, sign, acknowledge, deliver, and register a Deed of Usufruct over my property covered by Transfer Certificate of Title No. ______, located at ______, in favor of ______, under such terms and conditions as my attorney-in-fact may deem consistent with my written instructions.

B. Authority to Accept Usufruct

To accept on my behalf the grant of usufruct over the property covered by Transfer Certificate of Title No. ______, to sign the deed of usufruct, and to perform all acts necessary for its registration and implementation.

C. Authority to Register

To submit the deed and supporting documents to the Bureau of Internal Revenue, local assessor, local treasurer, Registry of Deeds, and other government offices; to pay lawful taxes, fees, and charges; to sign forms; to receive certificates, receipts, and annotated titles; and to do all acts necessary for registration.

D. Limitation Clause

This authority does not include the power to sell, donate, mortgage, exchange, partition, or otherwise transfer ownership of the property unless expressly stated in this instrument.

E. No Self-Dealing Clause

My attorney-in-fact shall not grant, transfer, or constitute any right over the property in favor of himself/herself, his/her spouse, descendants, ascendants, relatives, business interests, or nominees without my separate written and notarized consent.

Part Five: Common Scenarios

CII. Parent Grants Usufruct to Child

A parent may allow a child to use a house or collect income. Review donation, inheritance, and sibling issues. If the parent has other compulsory heirs, the arrangement should not unfairly impair legitimes or cause future estate disputes.

CIII. Child Grants Usufruct to Parent

A child who owns property may grant a lifetime usufruct to a parent. This is common when property is transferred to children but the parent continues to live in the house.

Review whether the child is sole owner and whether spouse consent is needed.

CIV. Owner Abroad Uses SPA to Grant Usufruct

The SPA must be properly executed abroad and must specifically authorize usufruct. The attorney-in-fact should not exceed authority.

CV. Heirs Grant Usufruct to Surviving Parent

After one parent dies, heirs may allow the surviving parent to use the family home for life. Review estate settlement, co-owner consent, estate tax, family home issues, and registration.

CVI. Usufruct in Favor of Common-Law Partner

This can be legally sensitive. Review:

Civil status of grantor;
Existing spouse;
Compulsory heirs;
Property regime;
Donation limitations;
Morality and public policy concerns;
Possible challenges by heirs;
Tax treatment.

CVII. Usufruct in Favor of Corporation

If the usufructuary is a corporation, review corporate authority, duration limits, business purpose, tax consequences, and registration.

CVIII. Usufruct Over Property to Be Developed

If the usufructuary will build, develop, or operate business on the property, the deed should address construction rights, permits, ownership of improvements, environmental compliance, taxes, and termination.

CIX. Usufruct Used Instead of Lease to Avoid Rent Control or Tax

This is risky. Substance may be examined. If the arrangement is really a lease, it should be documented as a lease.

CX. Usufruct and Caregiving Arrangement

A property owner may grant use of property in exchange for care. This should be drafted carefully as an onerous contract or mixed arrangement.

Review:

Care obligations;
Duration;
Termination for neglect;
Medical decisions;
Expenses;
Abuse prevention;
Accounting;
Effect of owner’s incapacity or death.

Part Six: Dispute Prevention

CXI. Best Practices for Deed of Usufruct

Use precise property descriptions.
State whether usufruct is free or paid.
Define duration clearly.
State whether rental income belongs to usufructuary.
Prohibit sale or mortgage by usufructuary.
Allocate taxes and repairs.
Require owner consent for structural changes.
Address insurance.
Include termination and turnover procedure.
Register the usufruct if it affects real property.
Obtain spousal and co-owner consent.
Confirm tax consequences.
Avoid vague lifetime or family arrangements.
Keep notarized originals.
Use legal advice when heirs, elderly owners, or high-value property are involved.

CXII. Best Practices for SPA

Use specific powers.
Identify property clearly.
Mention usufruct expressly.
Avoid unnecessary sale or mortgage authority.
Limit self-dealing.
State validity period.
Use proper notarization or consular acknowledgment.
Attach IDs.
Use multiple originals if needed.
Revoke in writing after purpose is complete.
Avoid signing blank documents.
Do not rely on old SPAs without verification.
Check principal’s capacity.
Confirm principal is alive.
Compare SPA with deed before signing.

CXIII. Best Practices for Notaries and Document Preparers

A notary or drafter should:

Confirm identity of parties;
Check capacity;
Ask if principal personally appears;
Review title and property documents;
Check if spouse or co-owner consent is needed;
Confirm SPA authority;
Avoid notarizing incomplete documents;
Avoid notarizing where principal is absent;
Explain legal consequences;
Keep notarial records;
Refuse suspicious self-dealing documents;
Advise parties to seek tax guidance.

CXIV. Best Practices for Buyers or Third Parties

If buying property subject to possible usufruct:

Check title annotations;
Inspect property;
Ask about occupants;
Review leases;
Review usufruct deed;
Verify authority of signatories;
Check if usufruct is registered;
Require cancellation if terminated;
Obtain warranties;
Check court disputes;
Confirm tax and occupancy status.

A buyer who ignores a known usufruct may inherit a possession problem.

Part Seven: Frequently Asked Questions

1. What is the difference between ownership and usufruct?

Ownership is title to the property. Usufruct is the right to use and enjoy the property of another and receive fruits, subject to preserving the property.

2. Can a usufructuary sell the property?

No, not the property itself, unless separately authorized by the owner. The usufructuary may only exercise rights granted by law and the deed.

3. Can a usufructuary lease the property?

Possibly, if allowed by the deed and law. The lease should not exceed the usufructuary’s rights and duration.

4. Can a usufruct be for life?

Yes. Lifetime usufruct is common. It usually ends upon the usufructuary’s death unless otherwise legally provided.

5. Should a deed of usufruct be notarized?

Yes, especially for real property. Notarization is necessary for public document status and practical registration.

6. Should a usufruct over land be registered?

Yes, if intended to bind third parties and appear on title. Registration protects the usufructuary against later buyers or encumbrancers.

7. Can one co-owner grant usufruct over the entire property?

Generally, no. A co-owner can only deal with his or her share unless authorized by all co-owners.

8. Is spousal consent needed?

It may be needed if the property is conjugal, community, or affects the family home. The title alone may not answer the question.

9. Is a usufruct a donation?

It may be, if granted without consideration. Donation formalities and tax issues should be reviewed.

10. Can an SPA authorize someone to sign a deed of usufruct?

Yes, but the SPA should specifically authorize the creation or acceptance of usufruct and identify the property.

11. Is authority to manage property enough to grant usufruct?

Usually not. Granting usufruct is more than ordinary management and should be expressly authorized.

12. Can the attorney-in-fact grant usufruct to himself?

Only with very clear authority, and even then it is high-risk because of self-dealing and conflict of interest.

13. Does an SPA expire?

It depends on its terms, but it may be revoked and generally ends upon the principal’s death. Some offices require recent SPAs.

14. Can a foreign-executed SPA be used in the Philippines?

Yes, if properly acknowledged, consularized, apostilled, or authenticated as required.

15. What happens if the deed exceeds the SPA?

The principal may challenge the deed as unauthorized unless he or she ratified it. Third-party rights and formalities may affect the remedy.

16. Can a deed of usufruct be cancelled?

Yes, if the term ends, the usufructuary dies, the condition occurs, the parties agree, or legal grounds for cancellation exist.

17. Can the owner sell property subject to usufruct?

Generally yes, but the buyer may take subject to the usufruct if it is registered or known.

18. Who pays real property tax?

The deed should say. If silent, legal rules and the nature of expenses apply. The parties should allocate this clearly.

19. Can a usufruct be inherited?

A personal lifetime usufruct generally ends upon death and is not inherited. Transferability depends on law and the deed.

20. What is the biggest risk in these documents?

The biggest risks are unclear authority, defective ownership consent, self-dealing, failure to register, tax issues, and vague duration or use terms.

CXV. Conclusion

A Deed of Usufruct and a Special Power of Attorney can be useful legal tools in the Philippines, but they must be drafted and reviewed with precision. A usufruct affects the use, possession, and fruits of property without transferring ownership. An SPA authorizes another person to act, but only within the powers clearly granted. When an attorney-in-fact signs a deed of usufruct, the SPA must specifically authorize that act.

A proper legal review should examine the parties’ capacity, property ownership, spousal or co-owner consent, duration, scope of use, fruits, repairs, taxes, improvements, transfer restrictions, termination, registration, and tax effects. It should also compare the deed against the SPA to ensure the attorney-in-fact did not exceed authority. Special caution is needed where the attorney-in-fact benefits personally, the principal is elderly or abroad, the property is conjugal or co-owned, the property is inherited, or the usufruct is granted for free.

The best documents are specific, limited, notarized properly, tax-aware, registrable, and consistent with the parties’ true intention. A usufruct should not be used to disguise a sale, evade taxes, defeat heirs, or transfer control without clear authority. An SPA should not be treated as a blank check. Together, these documents should protect the owner, the usufructuary, third parties, and future heirs by clearly stating who may use the property, for how long, under what conditions, and with what authority.