An annuity with lifelong maintenance or an apartment in exchange for a quiet old age

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The Essence of a Lifetime Rent

A citizen of Russia (most often a lonely pensioner) transfers his property to another person or organization in exchange for lifelong maintenance. It can be implemented in various forms:

  • cash payments (at least two living wages per month);
  • providing the owner of the apartment (monthly delivery of food, medicine, hygiene items, etc.);
  • combined form.

Many Russians mistakenly believe that immediately after the conclusion of the contract, they can already consider themselves the full owners of the apartment and evict the pensioner living in it..

In fact, it is possible to evict the former owner only after he will be provided with other housing, and then if he agrees to move. Also, without the consent of the owner of the apartment, it is impossible to carry out any legal actions with his real estate (sell, rent, etc.).

The right to completely dispose of the apartment comes only after the death of the rent recipient.

Nuances of concluding a contract

Conditions of detention

One of the most common problems with life-long annuity contracts is the lack of clearly defined conditions for a pensioner who changes his apartment for life-long care. As a rule, the owner of the apartment under the contract receives a certain amount of money every month, and, in addition, food, medicine and other things he needs for a normal life..

Very often, retirees begin to complain over time that the food or medicine they receive is cheap and of insufficient quality and demand that they bring more expensive food and medicines or, at the slightest discomfort, demand that they call a doctor at home and have them examined. And if the annuity payers refuse to do this, considering such demands unreasonable, the pensioner terminates the contract. Such situations are common..

To avoid such situations, it is necessary to indicate in the contract the value of the apartment, which is transferred to the rent payer. And then clearly describe not only the types of services that will be included in the lifetime maintenance (groceries, apartment cleaning, medicines, etc.), but also their monthly cost. This will avoid misunderstandings between the parties to the contract..

Contract price

It is strongly discouraged to write in the contract that the apartment is transferred free of charge. There is a rule in the legislation that allows the recipient of the rent in such cases to terminate the contract, provided that the other party violates its terms. And since with lifelong content “violation of the terms of the contract” is a very vague concept, under which anything can be summed up, it is better to try to prevent even the theoretical possibility of such situations arising. To do this, it is enough to write that the apartment is transferred to the rent payer for a certain amount.

Buyout price

Upon termination of the contract, the recipient of the annuity can demand from the other party both the return of ownership of his apartment and its redemption for a certain amount.

The legislation says that if the amount of redemption is not specified in the contract, then the apartment is redeemed only at the price of the annual maintenance of the rent recipient. Therefore, it is best to set the buyout price at the market value of the property..

Practical instructions for concluding a contract

  1. For the future annuity payer, before concluding a transaction, it is very important to carefully consider once again whether he will be able to take care of a stranger for him for many years in a row (the slightest neglect of this obligation becomes a reason for terminating the contract), pay significant amounts monthly for its maintenance and hope that in in the end, the apartment will still go to him.
  2. It is necessary to demand from a pensioner a duly certified certificate from a neuropsychiatric dispensary and an extract from his medical record. There are plenty of cases when the court recognized the contract as invalid, since at its conclusion the owner of the apartment due to illness did not give an account of his actions, in Russian practice there are plenty.
  3. The contract must be notarized. Fixed duty – 0.5% of the contract price, but not more than 20,000 rubles.
  4. Then the agreement must be registered with the justice authorities.

Termination of an agreement

If one of the parties wants to terminate the contract, she must inform the other party about this in a letter. If the other party agrees, then they need to go to a notary, who will terminate the contract. If the consent of the second party could not be obtained, then it is necessary to demand termination of the contract through the court.

But the court cannot terminate the contract simply on the basis of the wishes of one of the parties. It is necessary to provide the servants of Themis with facts that would indicate that the agreement was not fulfilled. After termination, the recipient of the rent receives back his apartment or a certain amount of money previously agreed in the contract.

In theory, the payer can also count on compensation for the costs incurred by him, if, of course, the court recognizes that he fulfilled the terms of the contract in good faith. But in practice this does not happen often, because often many people absolutely do not burden themselves with collecting evidence of the fulfillment of the contract..

Proof of performance of the contract

In whatever excellent relationship the parties to the contract may be, the annuity payer must never forget to retain evidence of caring for the annuity recipient. They can be very diverse:

  1. It is better to transfer monetary amounts not into hands, but transfer to the card of the recipient of the rent.
  2. Keep receipts for medicines, groceries, clothing, etc. Ideally, each time the annuity recipient signs their receipts each time they receive any goods.
  3. The recipient of the annuity at certain intervals (for example, every few months) can write receipts stating that he has no claims to the performance by the other party of the terms of the contract.

A life-long maintenance agreement has its own advantages and disadvantages for each of the parties, therefore, before concluding it, it is necessary to carefully weigh all the pros and cons, having considered all the risks.

Sample life annuity contract– download in .doc format

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Comments: 1
  1. Piper

    Which option would provide a better sense of security and overall quality of life during old age – an annuity with lifelong maintenance or an apartment?

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