Drafting a life care agreement: legal aspects and procedure

BASE (basic) 3.13

advertisement

Consultant # 1377

Lawyer

Ukraine / Kyiv

i

Reading time: 13 minutes Total views: 86

Rate:

0

Publication date: 24.07.2024

Drafting a life care agreement: legal aspects and procedure

A life care agreement is an important tool that allows for the provision of material and social support to elderly or disabled persons in exchange for the transfer of property ownership. This agreement provides that one party (the alienator) transfers real estate or other property to the other party (the transferee), and the transferee undertakes to provide the alienator with maintenance for the rest of his or her life. In Ukraine, the law clearly regulates the terms and procedure for entering into a life care agreement, the rights and obligations of the parties, and provides social guarantees to alienators. In this article, we will consider the main legal aspects and procedure for drafting a life care agreement, including the legal framework, elements of the agreement, rights and obligations of the parties, registration of the agreement and possible risks.

Legal framework

The main legal acts regulating the conclusion of a life care agreement in Ukraine are:

1. The Civil Code of Ukraine: Defines the legal basis for the conclusion, performance and termination of a life care contract (Chapter 57).
2. The Law of Ukraine "On Notaries": Establishes the requirements for notarisation of contracts, including life care contracts.
3. Law of Ukraine On State Registration of Real Property Rights and Encumbrances: Regulates the procedure for state registration of ownership of real estate transferred under a life care contract.

Elements of a life care contract

A life care agreement must contain the following key elements:

1. Parties to the contract: The full names, place of residence, identification numbers and other necessary data on the alienator and the transferee are specified. The alienator may be an individual who has the right of ownership of the property, and the transferee may be any individual or legal entity.
2. Subject of the agreement: The property to be transferred to the transferee is described. It can be real estate (residential buildings, apartments, land plots) or movable property (cars, securities, etc.).
3. Obligations of the acquirer: The transferee's obligations to provide for the lifetime maintenance of the alienator are described in detail. This may include providing housing, food, medical care, social support, and a certain amount of money.
4. Rights and obligations of the alienator: The alienator has the right to receive care and maintenance in accordance with the terms of the agreement, as well as the right to live in the transferred property for the rest of his or her life.
5. Terms of termination of the agreement: Specifies the circumstances under which the agreement may be terminated or suspended. This may include the transferee's breach of duty, the death of the transferor, or other circumstances stipulated in the agreement.
6. Allocation of costs: Indicates the costs associated with the maintenance of the alienator and the procedure for covering them. These may include expenses for utilities, medical care, routine housing repairs, etc.
7. Ensuring the performance of the agreement: There may be provisions for pledging property, risk insurance or other measures to ensure the performance of the agreement.
8. Notarisation and registration: A life care agreement is subject to notarisation and state registration.

Rights and obligations of the parties

The rights and obligations of the parties under a life care contract are clearly regulated by law and the contract. The main rights and obligations of the parties include.

The rights of the alienator:

1. To receive the maintenance provided for in the agreement, including housing, food, medical care and other services.
2. Reside in the transferred property for the rest of his/her life.
3. To demand termination of the agreement in case of breach of its terms by the acquirer.

Responsibilities of the alienator:

1. Transfer the property to the transferee in ownership or in possession with the encumbrance of the right of life maintenance.
2. To comply with the terms of the agreement, including living in the transferred property, if provided for by the agreement.

Rights of the transferee:

1. To obtain ownership of the property transferred under the agreement upon the death of the alienator.
2. To demand that the alienator fulfil the terms of the agreement.

Obligations of the acquirer:

1. Provide for the lifetime maintenance of the alienator, including housing, food, medical care and other services provided for in the agreement.
2. Fulfil all other obligations stipulated by the agreement.

Registration of a life care agreement

After signing a life care agreement, it is subject to notarisation. The notary verifies the legality of the agreement, the compliance of its terms with the law, and the ability of the parties to enter into the agreement. After notarising the agreement, the notary is obliged to submit documents for state registration of rights to real estate transferred under the agreement. State registration is mandatory and ensures that the transferee acquires ownership of the property after the death of the alienator.

Possible risks and how to minimise them

The conclusion of a life care agreement may be accompanied by certain risks for both parties. The main risks include.

For the alienator:

1. Improper fulfilment of the terms of the agreement by the transferee, which may result in insufficient maintenance or care.
2. Loss of the right to the property in case of unfair behaviour of the acquirer.

For the acquirer:

1. Excessive costs for the alienator's maintenance, especially in the event of a significant deterioration in his or her health.
2. Possible disputes with other heirs or stakeholders over property rights.

To minimise the risks, it is recommended:

• Clearly define in the agreement all the terms and obligations of the parties, including a detailed description of the services to be provided by the acquirer.
• Establish mechanisms for monitoring the execution of the agreement, including regular reports on the fulfilment of the terms of the agreement, checks on the health and living conditions of the alienator.
• Include in the agreement terms to secure the performance of the agreement, such as pledging property, risk insurance or engaging guarantors.
• Consult with a lawyer when entering into an agreement to ensure that its terms fully comply with the law and the interests of the parties.