A single elderly woman owns a house in which she lives. Due to her age, it is difficult for her to take care of the house alone, she often has to ask a neighbor for help with household issues. The woman decided to draw up a lifelong support agreement for her assistant and give her the house so that she could always count on her support. How to arrange such support correctly in order to ensure mutually beneficial conditions for both parties and avoid risks – read further.
Legal basis for drawing up a contract of lifetime maintenance
A lifelong support (care) agreement is a deed by which one party (the alienator) transfers to the other party (the acquirer) the ownership of a residential building, apartment or part thereof, other real property or movable property that has a significant value, in return for which the aquirer is obliged to provide the alienator with support and (or) care for the rest of their life.
According to the Civil Code of Ukraine (hereinafter - the Code), the alienator in the lifelong suport (care) agreement can be a natural person, regardless of their age and state of health. The acquirer in the contract of lifelong support (care) can be an adult natural person or a legal entity. If the acquirers are several natural persons, they become co-owners of the property transferred to them under the lifelong support (care) aggrememnt, under the right of joint co-ownership. The duty of these persons to the alienator is joint and several. The lifelong support (care) contract may be concluded by the alienator in favor of a third party.
According to the Code, property belonging to co-owners under the right of joint co-ownership, in particular, property belonging to spouses, may be alienated by them on the basis of the lifelong support (care) agreement. In the event of the death of one of the co-owners of the property, which was alienated by them on the basis of the lifelong support (care) agreement, the amount of the acquirer's obligation is reduced accordingly.
The subject of the agreement may be:
- residential building or its part, apartment or its part;
- other real prorperty (land plot, garden house, country-house, garage, non-residential building, non-residential premises, industrial complex, movable property subject to the regime of real property, etc.);
- movable property of considerable value.
Since the legislation does not establish a value expression of significant value or an approximate list of such things, they can be vehicles, antiques, works of art, cultural values, jewelry, collections of listed items, equipment, securities, intangible assets, in particular, objects of intellectual property, etc.
Agreement specifics
The specifics of the lifelong support agreement are that:
- the property becomes the property of the acquirer, but the acquirer will not be able to dispose of such property during the life of the alienator, since when certifying the contract of lifelong support (care) a prohibition is imposed on the alienation of the property in the established order, which is written on all copies of the contract (Article 73 of the Law “On Notary”);
- the lifelong support obligations are of a personal nature, as they are established for a specific individual;
- the lifelong support agreement can be concluded in favor of a third party (dependent), to whom the acquirer must provide lifelong support and care;
- the contract is of a long-term nature and requires the acquirer to constantly and systematically fulfill their obligations.
Part 4 of Art. 746 of the Code stipulates that the lifelong support (care) agreement can be concluded by the alienator in favor of a third party.
The alienator can be any natural person, regardless of age and health (Part 1 of Article 746 of the Code). According to the general requirements for the validity of the deed (Article 203 of the Code), the person who commits it must have the required amount of civil legal capacity.
If the alienator is one of the co-owners of the property that belongs to them under the right of joint co-ownership, the lifelong support (care) agreement can be concluded after determining the share of this co-owner in the joint property or determining the procedure for using this property between the co-owners.
The lifelong support (care) agreement is concluded in writing and is subject to notarization. In accordance with the Procedure for notarial actions by notaries of Ukraine, approved by Order of the Ministry of Justice No. 296/5 of February 22, 2012, the agreement is certified by notaries in compliance with the general rules for certifying alienation agreement.
During the certification of such an agreement, the alienation of property is prohibited in the established order, which is written on all copies of the contract. Until the alienator's death, the acquirer does not have the right to sell, donate, exchange the property transferred under the lifelong support (care) agreement, enter into a pledge agreement regarding it, or transfer it to another person on the basis of another deed. The property transferred to the acquirer under the lifelong support (care) agreement cannot be charged during the life of the alienator .
The acquirer becomes the owner of the property transferred to them under the lifetime support (care) agreement, in accordance with Article 334 of the Code. The provisions of this article provide that the right of ownership of property under a contract that is subject to notarization arises from the acquirer from the moment of such certification. Rights to immovable property, which are subject to state registration, arise from the date of such registration in accordance with the law.
The lifelong support agreements, the subject of which are privately owned agricultural plots of land, are certified only in case of alienation of such land plots in favor of the other spouse, relatives (children, parents, relatives (full and half) brothers and sisters, cousins, grandfather, grandmothers, grandchildren, great-grandchildren, uncles and aunts, nieces and nephews, stepsons, stepdaughters, stepfathers, stepmothers). This requirement does not apply to land plots of non-agricultural land, except for land plots under field roads designed for access to land plots, and land plots for horticulture.
The agreement can specify all types of material support, as well as all types of care (guardianship), with which the acquirer must provide the alienator. If the duties of the acquirer have not been specifically defined or in the event of a need to provide the alienator with other types of material support and care, the dispute must be resolved in accordance with the principles of justice and reasonableness.
The acquirer may be obliged to provide the alienator or a third person with housing in the house (apartment), which was transferred to them under the lifelong support (care) agreement. In this case, the agreement must specifically specify that part of the residence in which the alienator has the right to live.
Material support, which must be provided to the alienator on a monthly basis, is subject to a monetary assessment. Such assessment is subject to indexation in accordance with the procedure established by law.
Change of terms
The acquirer and alienator can agree on the replacement of the thing that was transferred under the lifelong support (care) agreement with another thing. In this case, the scope of the acquirer's duties may be changed or left unchanged by agreement of the parties.
Loss (destruction), damage to the property that was transferred to the acquirer is not a reason to terminate or reduce the scope of their obligations to the alienator .
In case of impossibility of the natural person to further fulfill the obligations of the acquirer under the lifetime maintenance (care) contract for reasons of significant importance, the duties of the acquirer may be transferred with the consent of the alienator to a member of the acquirer's family or to another person with their consent.
The alienator's refusal to give consent to the transfer of the transferee's responsibilities under the lifelong support (care) agreement to another person may be appealed to the court. In this case, the court takes into account the duration of the contract and other circumstances that are of significant importance.
In the event of the death of the acquirer, their obligations under the lifelong support (care) agreement are transferred to those heirs to whom ownership of the property transferred by the alienator has passed. If the heir by will refused to accept the property that was transferred by the alienator, the ownership of this property may pass to the heir by law. If the acquirer has no heirs or they refused to accept the property, the alienator acquires ownership of this property. In this case, the lifelong support (care) agreement is terminated.
In the event of termination of the acquiring legal entity with the determination of legal successors, the rights and obligations under the lifelong support (care) agreement are transferred to them. In the event of the liquidation of the acquiring legal entity, the ownership of the property transferred under the lifelong support (care) agreement is transferred to the alienator. If, as a result of the liquidation of the acquiring legal entity, the property that was transferred to it under the lifelong support (care) agreement was transferred to its founder (participant), the rights and obligations of the acquirer under the lifelong support (care) agreement are transferred to them.
Grounds for terminating the agreement
The provisions of Art. 755 of the Code defines the grounds for terminating the agreement.
The lifelong support (care) agreement is terminated upon the death of the alienator. The acquirer is obliged to bury the alienator in the event of the latter’s death, even if this was not provided for in the lifelong support (care) agreement. If part of the alienator's property has passed to their heirs, the costs of the burial must be fairly divided between them and the acquirer.
The Code provides that the agreement may be terminated by a court decision:
- at the request of the alienator or a third party, in whose favor it was concluded, in case of non-fulfillment or improper fulfillment of the duties by the acquirer, regardless of their fault;
- at the request of the acquirer.
In the event of termination of the lifelong support (care) agreement due to non-fulfillment or improper performance by the acquirer of obligations under the agreement, the alienator acquires the right of ownership of the property transferred by them and has the right to demand its return. In this case, the costs incurred by the acquirer for the support and (or) care of the alienator are not subject to reimbursement.
If the agreement is terminated due to the impossibility of its further performance by the acquirer for reasons of significant importance, the court may leave the acquirer the right of ownership of part of the property, taking into account the length of time during which they properly fulfilled their obligations under the agreement.
