Taking care of property.  An annuity contract can be beneficial for both parties, but there are a few things to look out for

Taking care of property. An annuity contract can be beneficial for both parties, but there are a few things to look out for

If a person wants to be cared for in his old age, he can transfer his property for payment. Thanks to this, it is guaranteed for life, and the buyer has a chance for a better life.

What is an annuity contract?

The owner can transfer the property to another person in exchange for its maintenance for the rest of his life. An annuity contract can ensure this. It must be in the form of a notarial document, so it is important to prepare it before a notary public. It is also worth submitting an application for its entry into the land register and mortgage of specific real estate, so that the interests of both parties are well protected. The property can only be sold by a natural person. However, its acquisition is possible for natural and legal persons.

Article 908. § 1. If, instead of the transfer of real estate ownership, the buyer has made to give the seller lifetime maintenance (annuity contract), he should, in the absence of a different agreement, accept the seller as. a member of the household, provide him with food, clothes, housing, lights and oil, help him and take care of him properly in his illness, and perform his funeral at his own expense according to local customs. § 2. If in the annuity contract the buyer of the property has committed to load it to the seller for use, an exercise that is limited to a part of the property, the easement of the apartment or other personal payments, or to meet the occasional benefit. in money or things specified in specie, use, personal servitude and the right to periodic benefits are of the content of the right of life payment. § 3. Annuity can also be reserved for a person close to the seller of real estate.

Such an agreement should list the benefits to be provided by the new owner of the property to the previous one. If the information is not provided, the buyer will have to act in accordance with the provisions of the Civil Code, that is, among other things, take the person who found the property in his house, give him food, good service when. illness or arrange a funeral at his own expense. The right to annuity payments ends at the death of the eligible person.

Life annuity contract and deterioration of relations between the parties

If the buyer of real estate fails to fulfill the obligations contained in the life annuity contract, the person entitled to receive support can bring a lawsuit to persuade him to perform the promised benefits. It also happens that relationships between parties deteriorate over a period of several years, and thus mutual intercourse is not beneficial for anyone. Then, the buyer of real estate and its previous owner can apply to the court to exchange all or part of the benefits under the contract for a life annuity whose value is equal to them.

It is worth knowing that by drawing up a life annuity contract you must pay a tax for civil law activities amounting to 2% of the market price of the property, which the buyer is obliged to pay.