A life-maintenance agreement is a special form of life annuity. The recipient transfers a house, flat, land plot or other real estate to the payer, who undertakes to provide lifetime maintenance to the recipient and/or designated persons. It is not simply a will or a gift: ownership and reciprocal duties are structured by contract.
Essential point. The agreement must be notarised. Where real estate is transferred, the relevant rights and transfer must be registered. The parties should define the property, the recipient, the exact scope and value of maintenance, and how performance will be evidenced.
What the contract may include
Under Article 602 of the Civil Code, maintenance may include housing, food, clothing and, where the recipient’s health requires it, care. It may also provide for payment of funeral services. The agreement must state the value of the total maintenance.
For an agreement under which property is transferred without payment, the monthly value of the total maintenance may not be lower than two subsistence-minimum amounts per capita established for the relevant region where the property is located; if no regional amount exists, the federal amount applies.
Points requiring precise drafting
- complete identification of the property and the recipient or designated beneficiaries;
- the concrete services, payments, frequency and method of performance;
- how care, household support and expenses will be documented;
- the property’s use and limits on its disposal while the obligation exists;
- the procedure for replacing in-kind maintenance with periodic payments, if the agreement permits it.
Property and performance
The payer does not receive an unrestricted right to dispose of property merely because ownership has transferred. Article 604 contains restrictions on disposal, pledge or other encumbrance of the property where it was transferred to secure life maintenance. The agreement and registration record should be checked before any transaction involving the property.
Termination and disputes
The obligation ends on the recipient’s death. If the payer materially breaches the agreement, the recipient may demand return of the transferred real estate or payment of the redemption price under the statutory rules. In that situation the payer cannot demand compensation for maintenance expenses already incurred.
Disputes frequently turn on the wording of the agreement and evidence of actual performance. A general promise of “care” is difficult to assess unless it has been converted into clear, verifiable obligations.
Practical conclusion
A life-maintenance agreement should not be used as a shortcut for estate planning. It is a continuing, regulated obligation affecting real estate and personal care. Independent review before signing helps the parties understand the legal consequences and reduce later disputes, without guaranteeing a particular result.