Contract of Life Maintenance of a Dependent

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Issues on life maintenance are regulated by Articles 710-714 § 4 Clause 34 of the Civil Code of DPR.

According to a contract of life maintenance of a dependent a recipient of rent – a natural person passes a house, an apartment, a ground area or other property belonging to him into the ownership of a payer of rent, who is committed to implementing life maintenance of a natural person and (or) specified a third person (persons) by him.

The obligation of a payer of rent in providing annuity may include the provision of needs for housing, nutrition and clothes, and if the health condition of a natural person needs it – caring for him/her. Contract of life maintenance may provide for payment of funeral services by a payer.

The cost of maintenance has to be defined in a contract of life maintenance. Moreover, the cost of the common maintenance in a month cannot be less than two fixed amounts of minimum wage according to the agreement, which envisages alienation of property for free.

A resolution of the dispute between sides on the cost of maintenance, which is provided or should be provided to a natural person, a court must be governed by principles of integrity and reasonableness.

The Code establishes that an opportunity of the replacement of providing maintenance in kind during the life of a natural person periodic payment in monetary terms.

It is should be noted that a payer of rent has right to alienate, to take for collateral or in another way to burden immovable property, which was transferred to him/her in ensuring of life maintenance, only with prior approval by a recipient of rent. A payer of rent has to accept necessary measures to provide in the period of life maintenance using the specified property doesn’t lead to the depreciation of the amount of such property.

An obligation of life maintenance stops in the moment of death of a recipient of rent.

Moreover, if the duties were violated by a payer, a recipient of rent has right to demand the return of the immovable property, which was transferred to the implementation of life maintenance, or payment to him redemption value, which is set by Article 703 of the Code. In doing so, the payer of rent hasn’t right to demand reimbursement because of the maintenance of a recipient of rent.

Thus, according to Article 703 of the Code, the ransom of the permanent rent takes place at the cost, which is determined by the agreement of life annuity in cases when a payer has used right on the ransom of permanent rent or when the ransom of permanent rent takes place on demand of a recipient of rent. The ransom takes place at the cost related to the annual cost of rent of payment due in the absence of conditions on redemption value in life annuity agreement.

At the same time, if there is no condition of the redemption value in an agreement of permanent rent on which property is transferred under rent for free, the redemption value along with the annual amount of rent payments includes the amount of transferred property, provided by rules of Clause 3 Article 526 of the Code, i.e. in cases when in a reimbursable agreement value isn’t provided and can’t be identified according to the agreement’s conditions, the implementation of the agreement must be paid at a price, which usually is charged for the similar goods, works or services under comparable circumstances.

It is should be noted that rules of life rent are applied to the agreement of life annuity unless otherwise provided by norms of § 4 of the Code.