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How to donate real estate to children

It is common within a family for parents to choose to gift their property to their offspring. Sometimes, however, they do not wait until old age to do so, but gift their underage children. What should be remembered in such a case?

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The donation must be approved by the court

Gratuitous gifting is a popular way of transferring ownership of real estate within a family, whereby gifting the family home or apartment to a descendant can solve potential complications and costs of inheritance proceedings in advance or settle real estate assets between former partners who, as a compromise solution, transfer the property to a common descendant.

However, if you want to donate real estate to a minor child, you will have to take into account that, in addition to all the legal requirements for a successful transfer of ownership of the real estate, the court enters into the whole process and approves such a donation agreement by its judgment. Sometimes it is even necessary to go to court before the actual signing of the gift agreement to decide who will be authorised to sign the agreement on behalf of the minor.

Tip: The most common questions about the gift agreement can be answered in our article.

What if the parents disagree

As is generally known, the age of majority is attained at the age of eighteen, until which time, with few exceptions, the child is not fully competent. A minor who has not acquired full legal capacity is only capable of legal acts which are appropriate in nature to the minor’s intellectual and volitional maturity for his or her age. The donation of immovable property is, by its nature, a legal act which, in addition to multiplying the child’s property, entails the creation of significant obligations in relation to the donated property and will burden the child in the future (e.g. payment of property tax, maintenance costs, etc.).

It will therefore not be a legal act for which the minor would be competent on his own and, on the contrary, he will have to be represented when signing the gift agreement. The legal representatives of the child in legal transactions for which the child is not competent are usually the child’s parents. However, it may happen that the parents may be in conflict in legal proceedings on behalf of the child, i.e. that there may be a conflict of interest between the parent and the child, for example if the parent is on the side of the donor and the child on the side of the donee.

According to the Civil Code, the parent cannot represent the child in such a case and a guardian must be appointed by the court. In this situation, before concluding a gift agreement, it will be necessary to first ask the court to appoint a so-called conflict guardian, who will then sign the agreement on behalf of the child as his or her representative. For the sake of completeness, it should be added that a gift agreement transferring ownership of real estate must be in writing and the signatures must be officially certified.

Practical solutions for donating property

Adonation agreement is an essential document that we will be happy to help you with. Don’t rely on poor quality templates that you can download for free from the internet.

After signing, a petition to the court is required

After the signing of the gift agreement, if the donee is a minor, a petition must be filed with the competent court to approve the legal transaction on behalf of the minor. According to the Civil Code, a legal act by which a child acquires a real property or a part thereof, which is what a gift agreement is, still requires the court’s approval. The court’s task in this case is to assess whether or not the acquisition of real estate in a particular case is in the interests of the minor and to decide whether or not to approve the transaction. It may be that the acquisition of the property would do more harm than good to the minor and the court will not approve the gift agreement.

Tip: If you decide to withdraw your gift, our article will inform you of the specific procedure and your options.

The petition shall be filed with the district (circuit) court in whose district the minor res ides and the petition shall be exempt from court fees. The child will be represented in the proceedings by a so-called conflict guardian, which is the social legal protection authority for children (OSPOD) in the place of residence of the child, due to a possible conflict of interests. If the court grants the petition, it will issue a judgment approving a specific gift agreement on behalf of the minor. This judgment will then be an annex to the application to the competent cadastral office to initiate the procedure for authorising the registration of the ownership right in the land register. Without such court approval, the donation contract would not be valid.

Tip: We deal with the proposal for entry into the cadastre in detail in our article.

Parents can still decide

It should be borne in mind that even after a minor becomes the owner of the immovable property after the registration of the ownership right in the Land Register, all other major legal actions concerning the property will be subject to the court’s consent again, e.g. encumbrance of the property with rights in rem, long-term lease agreement or possible sale or gift of the property. The court will therefore reassess whether or not a particular legal action is for the benefit of the minor. On the other hand, if it concerns so-called ordinary matters, the court’s consent will not be required. The property will also have to be administered by someone on behalf of the minor, usually again by the minor’s parents, who will then hand it over to the child once he or she has acquired legal capacity.

In the case of a gift of real estate to a minor, it is therefore necessary to prepare for the fact that the entire process of transferring ownership will be extended by court proceedings in which the court will decide whether or not to approve the specific gift agreement. Without a court ruling approving the gift agreement, the agreement would be null and void and the Land Registry would not register the transfer of ownership of the property to the minor.

Tip: Read more about donating property in our article.

Is an easement worthwhile

It is common practice to also create an easement of use for the donor ( parent or parents) in addition to the gift agreement, usually until the child reaches the age of majority or for the lifetime of the donor, so that the donor can continue to use the property. Together with the usufruct, a non- alienation and non-encumbrance easement is also often created, which prohibits the donor child from selling, transferring, leasing or mortgaging the property without the donor’s consent.

If you want to use the easement, file a request for approval at the same time as the gift agreement so that the court proceedings can take place at the same time. This will save you time and money.

Tip: For more information on how an easement works and what it is used for, see our article.

Don’t go it alone

Conveying a property is not an easy thing to do and it pays to consult a solicitor. He or she can help you draw up the deed of gift, avoiding possible mistakes in the contract that could lead to its invalidity. It will also save you time and possibly money that you would otherwise have to invest in dealing with the Land Registry. In addition, you will not lose the property altogether because of a bad contract, as happened to Kamila.

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Donation of real estate

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Author of the article

JUDr. Ondřej Preuss, Ph.D.

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.

Education
  • Law, Ph.D, Pf UK in Prague
  • Law, L’université Nancy-II, Nancy
  • Law, Master’s degree (Mgr.), Pf UK in Prague
  • International Territorial Studies (Bc.), FSV UK in Prague

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