Giving property to children is generally easier than settling an inheritance. It’s also cheaper. But beware of legal pitfalls that the donor should think about first.
Giving property to children is generally easier than settling an inheritance. It’s also cheaper. But beware of legal pitfalls that the donor should think about first.
As for donating outside the family, is it also convenient? Everything can be treated. A properly drafted gift agreement will prevent problems and unnecessary conflicts in the future.
The student Kamila took care of her sick grandmother for many years. However, it was not her real grandmother, but a neighbour. Kamila just helped her until it became a daily care. Although Kamila didn’t expect it at all, her grandmother decided to give Kamila her apartment. The old lady was not well with her family, who did not care for her at all.
The problem, however, was that neither Grandma nor Mrs. Kamila consulted anyone. Kamila had downloaded an old model of a donation contract from the internet, filled it in incompletely, and this was how she and her sick grandmother signed the contract and submitted it to the land registry. However, it turned out that they had marked the share in the common parts of the house wrong. They had also forgotten to indicate the share in the associated land around the house, i.e. the garden.
Because of the mistake, the Land Registry stopped the proceedings and rejected the gift agreement. In the meantime, however, the old lady had died and her flat had passed to her heirs in the inheritance proceedings.
In the transfer, including the donation of flats, properties are often transferred on multiple title deeds, which is what is forgotten. Each share must be expressly indicated, and the share in the land on which the house and flat stand must not be forgotten, nor the share in the house itself. The apartment is defined differently than before in connection with the new Civil Code, which can also lead to error, especially if the old contract is used.
Another typical legal error can be encountered in the case of a donation of a house. Although the new Civil Code has introduced the principle of superficies solo cedit. Translated, this means “the surface gives way to the land” in the sense that the building is part of the land. However, this does not apply consistently and houses and land are only gradually merged. Thus, a house is not necessarily part of the land even today. Thus, it may happen that only the land without the house or the house without the land is transferred by mistake when the gift is made. All this must be well covered, especially in the contract. The contract must of course be in writing and the signatures of all parties should be authenticated. Either at a notary, a lawyer or at a Czech Point office.
Only those who have a “specimen signature” on file with the Land Registry do not need to certify anything.
Many people are aware of all the risks and try to prevent problems already when dealing with a gift agreement. Like Mrs. Martina, who approached us some time ago with the need to transfer land in South Bohemia to herself and her brother as quickly as possible and on the best possible terms. Their parents wanted to give it to them. She was afraid of making a mistake. One of the plots was accessed by a road which was part of the other plot. This is a potentially legally complex situation. We recommended that Martina create a deed of gift for the land with the road easement.
In practice, this means that the road will remain in the possession of Mrs Martina’s brother, who was to get the neighbouring plot. However, she – and the eventual new owner of her land – will retain the right to access her land via this particular road. A land grant agreement that is handled in this way can prevent many future problems, for example if one of the siblings moves away and the new owner turns out to be a troublesome person.
Donation is also generally cheaper than probate. This is demonstrated by the tax legislation. Gift tax is no longer payable. Only income tax is therefore an option. The donor does not have any income, but loses assets, so there is no tax liability. However, the donee receives income. However, if he has a close relationship with the donor and belongs to the donor’s “close persons”, such a transfer is also exempt from tax. If not, he includes the gift in his full-year income and taxes it together with his other earnings.
Tip: Previous practice when selling a co-ownership share included the obligation to offer the co-ownership share. This has not been the case for several years. What is the current practice and legislation regarding pre-emption rights? And what rights are left to the co-owners?
We will provide you with a complete legal service related to real estate donation, including a proposal for entry into the Land Registry. We will also advise you on how to deal with taxes in the most advantageous way. We will handle everything quickly and flawlessly, so you don’t have to worry about a thing. You can pay after the service has been provided.
A transfer to the Land Registry may not resolve the donation once and for all. In certain cases, a so-called “revocation”, i.e. a proper revocation of the gift, is also possible. The law provides for basically two possible grounds for this. Firstly, in cases where the donor falls into distress. This means that he or she does not even have the means to provide basic subsistence for himself or herself or for a dependent. In such a case, the donee is obliged to return the gift to the donor or to provide him with the usual cost of such a gift.
More often, however, the gift is revoked for so-called ingratitude. Ingratitude is a situation where the donee intentionally or through gross negligence harms the donor. This does not mean a tense argument, but perhaps a failure to provide assistance in an illness or even a criminal act against the donor or a loved one. However, each case is assessed on an individual basis. It is therefore ultimately up to the courts to decide what constitutes ingratitude.
The donor has a period of one year from the time when the donee has wronged him to revoke or withdraw the gift. The exception is if the person has harmed him indirectly or has harmed a person close to him. In such a case, the time limit shall run from the time when he became aware of this. In some cases, the right to revoke the gift even passes to the donor’s heirs.
This is the case if the donee prevented him from revoking the gift before his death. Naturally, this may be an extreme situation where the donor is killed or mutilated by the donee and there is no room for revocation. Then the heirs take his place. In practice, one can imagine a situation where one of the siblings kills his parent in a quarrel, but who had previously given him a house. The other heirs will then claim the house “back” and can revoke the gift.
This article was prepared for the Lidové noviny series “Law & Housing”. See also other articles from the series:
We will provide you with a complete legal service related to real estate donation, including a proposal for entry into the Land Registry. We will also advise you on how to deal with taxes in the most advantageous way. We will handle everything quickly and flawlessly, so you don’t have to worry about a thing. You can pay after the service has been provided.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
In person and online. Just choose the appropriate service or opt for an independent consultation when you are unsure.
