A life annuity is a contract under which the owner (the creditor) sells a property to a purchaser (the debtor), in return for payment of a price converted into an initial capital sum, known as the Bouquet, with the balance paid in the form of tax-free life annuities.
Person who receives a life annuity or during the lifetime of which a life annuity is paid to a third party.
Revision of the life annuity amount according to the fluctuations of the purchasing power.
Clause allowing the cancellation of the sale in certain cases (often in case of cessation of the annuity payment by the annuitant’s beneficiary, or in case of non-fulfillment of the sale costs by the latter).
The person who receives the annuity, to whom it is due. The life annuity stops upon the death of the annuitant, whatever the cause. It implies the termination of the payment of the annuity, as well as the termination of the right of use if the life annuity property was occupied.
The person who makes the payment. In case of death, his/her heirs collect the property in inheritance and must continue to pay the rent instead. Generally, the sales contract stipulates that the heirs of the buyer are jointly and severally bound to the payment of the annuity.
Right of use and housing
The right to personally live in during all your lifetime. It is a limited usufruct, meaning that the beneficiary cannot allow his/her family to live in, nor grant any lease, since the rights remain strictly personal, and disappear by abandon or upon the death of the beneficiary.
Bare ownership without possession.
Full ownership without restrictions of any kind.
A life annuity is an annuity paid regularly and a lifetime warranty (therefore paid until the death of the beneficiary, comparable to a retirement pension or certain life endowments) which will be, according to the case, indexed or not on inflation. It may have been signed as part of a life insurance, a funded pension plan, or obtained by the sale of a property in life annuity.
‘Bouquet’ or initial capital
Initial capital deposited by the buyer at the latest at the signature of the authentic deed of sale. The amount is proposed by the annuitant and can vary between a high percentage of the market value of the property to a lower amount or even zero (in this case, the annuity calculation takes it into account). The balance between the initial payment (‘bouquet’) and the annuity is negotiated between the seller and the buyer.
Occupied life annuity
The owner will, eventually, keep the right to live in the property. In this case, the seller benefits from the right of usufruct, or the right of use, and the right to the fruit (usus and fructus) of a property belonging to another party.
Free life annuity
Property free from any possession or occupation.