An annuity agreement with lifelong maintenance: can it be challenged, sample 2020

Citizens of the Russian Federation have the opportunity to use several ways to obtain a housing plot legally. One of the most progressive and modern mechanisms for purchasing housing is the conclusion of a lifelong maintenance agreement. Such a document, in contrast to a banal gift agreement, guarantees that older people will receive care and attention in exchange for the provision of real estate.

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What is a lifelong maintenance agreement?

A life maintenance agreement, or annuity agreement, is a document signed by the owner of the living space and the person who undertakes to care for the owner until his death. The paper regulates the details of providing the property owner with everything necessary and includes the conditions under which termination of the agreement is possible.

The contract specifies the methods and details of care. Typically, the signatory who inherits the property agrees to:

provide the property owner with food and medicine;
provide constant care if the owner needs it;
pay a certain amount of money monthly.

Important! Contributions from the annuity payer are considered income and are taxed at 13%.

Permanent and lifetime annuity. What is the difference?

A permanent annuity is a type of transaction that provides for the perpetual nature of the obligations. They are entrusted to the guardian for the payment of the annuity. In this case, the validity of the contract is not limited to any period of time and does not depend on the life expectancy of the apartment owner. The transaction is considered completed after receipt of the entire amount for the property.

Help with services is not excluded here: purchasing food, medicine, medical support. That is, the agreement can be concluded like this: part of the contributions is made in money, and the second part in services or goods.

In the case of a permanent annuity, the annuitant has the right to purchase the property before the death of the owner. He can receive funds in completely different parts; the main thing here is to discuss this with the owner in advance. With a life sentence, this is impossible.

This is important to know: The lease agreement and its essential terms

Who can draw up an agreement

There is a certain list of conditions, subject to which the parties have the right to draw up a rent agreement:

the recipient of the content must be an individual;
the property must be individually owned;
the living space should not have any encumbrances;
both parties must be fully capable.

Important! Both a legal entity and an individual have the right to act as a payer.

How to conclude an agreement

The agreement must be made exclusively in writing. The law does not provide for a uniform form for such papers, so the best option would be to contact a specialist for detailed advice.

The life annuity paper must necessarily contain the following information:

place and date of conclusion of the agreement;
full details of signatories;
the most detailed description of the property being transferred;
the procedure for providing content;
rights and obligations of signatories;
liability of the parties for violation of the agreement;
actions in case of unforeseen circumstances;
duration of the agreement;
other subtleties, for example, the distribution of costs for legal posting of a document.

Note! If at least one of the points listed above was not reflected in the contract, it can be challenged and declared invalid.

Documents required for execution of the contract

Since the agreement is related to the subsequent transfer of property into the possession of another person, to draw up the paper, the notary will request the following list of documents:

originals and copies of passports of the parties;
consent of the property owner to conduct the transaction;
consent of the signatory's spouses, if any;
a certificate from the BTI containing the estimated value of the property;
papers confirming that the property really belongs to the rentee;
certificate of absence of encumbrances on the living space;
floor plan of an apartment or house, issued by authorized government agencies;
certificates confirming the absence of drug addiction or mental illness;
application for registration of the agreement;
a certificate confirming the validity of the paper’s conclusion;
a receipt confirming the fact of payment of the state fee for registration of the agreement.

Rent agreement: sample 2020 and step-by-step instructions for drawing up

The agreement has not undergone significant changes recently. It is compiled in 3 identical copies and must contain the following sections:

Personal data of the parties to the agreement.
The subject of the agreement is what property will be transferred into the ownership of the payer upon the death of the annuity recipient.
A detailed description of the payer’s obligations towards the recipient: the amount of the rental payment, the form of payment (to a bank account or in cash), other obligations.
Rights and obligations of the parties, their responsibilities.
The procedure for terminating the contract - including a detailed description of the conditions for the redemption of the annuity (i.e., what amount and under what conditions).
Other items, signatures, details of the parties.

First, the full names and passport details of both parties are written down. If there are several rent recipients, as well as in the case of payment of rent payments to a third party, their details must also be entered.

Subject of the rent agreement

The subject of the agreement is indicated below. Here it is very important to keep in mind that all information relating to property (real estate and any other) is written down in as much detail as possible:

certificate of ownership - document number, date of issue, in whose name it was issued;
date, number and name of the agreement on the basis of which the property became the property of the current owner: for example, a purchase and sale agreement, exchange, donation, etc.;
whether any third party has the right to use the same premises;
are there any other encumbrances on the property (seizure, pledge, easement on the land, etc.); if so, on the basis of what documents (court decisions, resolutions of the local Administration, etc.);
the price of the property, which is determined by agreement between the recipient and the rent payer or on the basis of an independent examination (in the latter case, a copy of the examination report must be attached).

Procedure for paying rent

It spells out in detail how the payer will pay the fee, in what amount, and to what account of the recipient.

Rights and obligations of the parties

This section details what the annuity payer and purchaser can expect and what obligations they assume. In fact, an elderly person is only required to sign the deed of transfer of the property, and also come in person or send his representative by proxy to the state registration authority in order to formalize the transfer of ownership of the apartment (or other object) into the ownership of the recipient after the date of his death.

Redemption of rent

This point should be given special attention – i.e. provide all the conditions:

on whose initiative the rent redemption procedure can be initiated;
what amount must be paid by the payer to the recipient;
what are the deadlines for depositing this amount;
what account should it go to?

Other items

The remaining sections are standard for any civil contracts - the responsibility of the parties for possible failure to fulfill their obligations, bank account details, and signatures are indicated.

Inheritance of a lifelong maintenance agreement

According to the law, if the annuitant dies, the responsibility for maintaining the dependent is transferred to the heirs. If the heirs repeatedly violate the agreement, the rentee has the right to go to court and terminate the agreement due to failure to provide the services described in the document.

In a situation where none of the heirs of the rent payer entered into the inheritance, the agreement passes in favor of the state. At the same time, government agencies also have the right to refuse the lifelong maintenance of the annuitant. In this case, the latter has the right to sue and terminate the transaction.

Advantages and disadvantages of lifetime rent of an apartment

Such a transaction has certain risks and losses:

The guardian may be an ordinary fraudster who does not fulfill the terms of the contract, and may choose an unscrupulous executor to provide services to the rent payer.
The renter may not be able to provide the landlord with everything necessary.
The owner may well live much longer than the guardian, and accordingly, the guardian will not be able to get his own apartment.
After the death of the property owner, relatives can challenge the terms of the contract and file a claim for its termination in court.
After some time, the annuitant may well want to terminate the contract, but if the guardian conscientiously fulfills all the terms of the contract, then this will be almost impossible to do.

Let us point out the significant pros and cons of the deal:

Advantages of a life annuity:

The homeowner can terminate the contract only by applying to a judicial institution.
The rent agreement is always registered with Rosreestr, so the apartment owner can be calm - “black realtors” will not bother him.
Such a deal is concluded on mutually beneficial terms: the pensioner receives all the necessary care and care, while living in his usual conditions, and the guardian, if he conscientiously fulfills all the provisions of the agreement, will, as a result, receive an apartment.

Disadvantages of a lifetime annuity:

The renter must transfer a fixed amount to the owner of the property every month.
If the guardian does not comply with the terms of the contract, the recipient has the right to terminate it, and all funds will not be returned to the payer.

This is important to know: Sample termination of a lease agreement by agreement of the participants

Frequent errors during registration

Typical design errors are:

incomplete description of the obligations and rights of the parties;
absence of some mandatory items;
ambiguous description of conditions;
error in the passport data of the parties;
incorrect description of the essence of the requirements.

To avoid common errors during registration, the parties should carefully study the sample available at the link.

Cancellation of the contract

The recognition of a transaction as void is carried out exclusively in court. If the initiator of the termination of the agreement is the rentee, in the statement of claim he must indicate:

reasons for cancellation of the agreement;
evidence of unfair content;
receipts and certificates confirming the fact of non-payment of services by the owner.

The law allows the parties to terminate the agreement on a voluntary basis. Wherein:

the lessee receives his property back;
the owner has the right to demand compensation for financial expenses during the validity of the agreement.

Possible pitfalls of the contract

Despite all the obvious advantages, the lifelong maintenance agreement contains a significant number of disadvantages and pitfalls for both signatories:

Unscrupulous rent payer. The prospect of getting a practically free apartment attracts more and more scammers every day. A citizen who has decided to draw up an annuity agreement must carefully select a counterparty in order to protect himself from problems in the near future.
Financial difficulties arising during the term of the contract. Sometimes during the term of the agreement, renters lose a source of regular income and, as a result, experience serious financial difficulties. Or, on the contrary, the annuitant begins to demand more maintenance due to illness. Such unforeseen circumstances should be discussed at the stage of drawing up the paper.
Death of the payer. Sometimes payers die before recipients. In such cases, the contract and obligations are inherited.
Relocation of the apartment owner to another location. The paper must reflect the possibility of the tenant moving to other apartments or houses.
Termination of a transaction due to fraudulent actions of one of the parties. None of the signatories has the legal right to terminate the agreement unilaterally. This procedure is carried out only through the court, and in the claim the rentee must indicate compelling reasons for recognizing the transaction as void.
Failure to comply with the terms and conditions prescribed in the agreement. Fraudsters often take advantage of the fact that most people do not know the laws and their own rights. Such persons simply do not fulfill their duties in the hope that there will be no sanctions from the rent recipient.
The appearance of relatives of the property owner after his death. There are often cases when, immediately after the death of the annuitant, relatives appear and begin to lay claim to the living space transferred under the agreement.

In order to avoid most force majeure situations, experts recommend:

keep clear records of funds spent on rent;
keep all receipts and receipts;
immediately before signing the contract, ask the rentee to undergo an examination and save the certificates;
pay utilities and transfer the rent to the recipient, even if the latter refuses it.

Arbitrage practice

According to federal judicial practice, there are a huge number of scammers operating under the following schemes:

An elderly man signs an annuity agreement. The payer carefully adheres to all terms of the contract and pays funds on time. At some point, the grandmother or grandfather begins to interfere in every possible way with the fulfillment of the terms of the contract, for example, they do not accept rent or do not allow them to pay for utilities. Ultimately, if the payer succumbs to the persuasion of the elderly, then they sue on the basis of non-fulfillment of the agreement and keep the living space for themselves. In this case, all funds paid by the other party are non-refundable.
The grandmother enters into a lifelong maintenance agreement with the fraudster. The latter avoids performing his duties in every possible way, taking advantage of the elderly person’s ignorance. Ultimately, the unscrupulous rent payer gets the apartment for next to nothing, and the grandmother remains out of work.

Is it possible to challenge the contract?

Relatives have the right to challenge the contract only under the following circumstances:

it was drafted incorrectly;
some mandatory points were not taken into account;
the agreement was not notarized and not registered with the justice department;
the agreement was not accompanied by certificates of full legal capacity of the signatories.

If none of the above factors exist, then it is not possible to challenge the document.

Security of the rentee

In the event of problems with payment, a claim may be filed against the rent payer with a claim to reimburse not only delayed payments, but also interest for late payments; if the amount of interest is not specified in the agreement, then it is calculated based on the amount of bank interest for late payments. Accrual is made for each overdue day.

If the payer sold the encumbered property, as stated above, all obligations passed under the agreement to the new owner, but if the new owner does not comply with the terms of the agreement, the fees are not paid on time, then the original owner bears subsidiary liability with the new owner.