A contract for the transfer of real estate against maintenance and care may be rescinded where the recipient of the property fails to provide the necessary maintenance or does not render the agreed care. The obligations of care and maintenance are indivisible, which means that they must be performed continuously, on a daily basis and in full, for as long as the transferor is alive.

Rescission of this type of contract may be effected only through court proceedings.
The outcome of the court claim depends significantly on the way the obligations are formulated in the contract. For example, it is important whether the obligations are specified, whether they relate to past periods, future periods, or both. It is also significant whether performance may be assigned to a third party. If the parties have not specified what part of the property is transferred against past maintenance and care and what part against future maintenance, then, in the event of material non-performance of the future obligations, the contract may be rescinded in full. However, where the contract expressly states what part of the property is transferred for past care and maintenance, that part of the contract is not subject to rescission.

If the property has been transferred to two or more persons, and only one of them has performed the obligations of maintenance and care to the agreed extent, non-performance by the other is not a ground for rescission of the contract.

Where the obligations of care and maintenance are directed towards more than one person (for example, spouses) and the contract draws no distinction between the obligations towards each of them, the recipient of the property is obliged to perform these obligations simultaneously and indivisibly in respect of all the transferors. In the event of partial non-performance towards any of the transferors, the contract may be rescinded in full.

Limitation period for bringing a claim
The time limit for bringing a claim for rescission of the contract is 5 years, running from the moment of non-performance of the obligations. It is important to note that a new limitation period runs for each separate instance of non-performance. For example, if the claim is brought in 2022, the transferor may seek rescission only for instances of non-performance occurring within the last 5 years before the date on which the statement of claim is filed.

Inheritance of the right to rescind the contract
The right to seek rescission of the contract is inheritable. The heirs of the transferor may bring a claim within 5 years of the date of the transferor’s death. Each heir has the right to seek rescission of the contract, but only for the part corresponding to their inheritance share.

For example:

  • If there is a sole heir, they may seek rescission of the entire contract.
  • If there are several heirs, each of them may seek rescission only for their share of the inheritance. In this case, if the claim is successful, the heirs become co-owners of the property together with the recipient of the property, in proportion to the ownership shares of those who did not bring a claim.

Declaring the contract null and void
In addition to rescission for non-performance, the contract may be declared null and void, for example where the transferor’s death occurred shortly after its conclusion. Case law considers the contract null and void if, at the time of its conclusion, the recipient of the property was aware of the transferor’s imminent death. Deteriorated health or advanced age are not in themselves sufficient to declare the contract null and void. Nor can the contract be declared null and void if it was concluded for care and maintenance provided in a past period.

Consequences of rescission of the contract
Rescission of the contract has retroactive effect, whereby the transferor recovers ownership of the property. The recipient of the property, in turn, is entitled to receive monetary compensation for the care and maintenance provided.

If, in the meantime, the property has been transferred to a third party, the moment at which the statement of claim is registered in the property register is significant. If the transfer took place before the registration, the third party retains ownership of the property. If the transfer was carried out after the registration, the third party may lose ownership of the property following rescission of the contract. The decisive moment is the day of registration of the statement of claim, not the date on which it is filed with the court.

If you need legal advice or assistance in connection with the transfer of property against maintenance and care, contact us on: 0887550706 or by e-mail: [email protected]