Many people consider gifting their apartment to relatives while still alive. However, senior partner Roman Lyapunov from `Lyapunov, Terekhin and Partners` warns that despite its apparent simplicity, this method is fraught with complex legal traps.
Key Risks to Consider Before Gifting Real Estate:
- **Irrevocability:** Once the gift is made, reversing the decision and reclaiming the property is generally not possible. Legal provisions allow for reversal only in extremely rare, exceptional circumstances.
- **Loss of Control:** The donor immediately loses all rights to the property, meaning they can no longer sell it, use it as collateral, or bequeath it in a will.
- **Potential for Disputes:** The gift can be challenged by other relatives of the donor, potentially leading to lengthy and complicated legal battles for the recipient.
- **Spousal Consent Requirement:** If the apartment was acquired during marriage, the consent of the donor`s spouse is mandatory. Without it, the transaction may be deemed invalid.
- **Risk of Displacement:** If relationships between the donor and recipient deteriorate, and the deed does not explicitly include a right to lifelong residency for the donor, the original owner could find themselves without a place to live or adequate support.
Lyapunov further highlighted that a deed of gift does not `cleanse` an apartment of existing financial burdens. If the property is encumbered by a mortgage or under arrest, the new owner acquires it with these obligations. Moreover, unpaid utility debts may also transfer to the new owner, necessitating subsequent legal challenges to dispute them.
Another significant risk arises if the donor is declared bankrupt within three years of the gift being made. In such a scenario, the transaction could be challenged as a suspicious transfer, potentially leading to the apartment`s return to creditors. This poses a substantial risk for any future buyer of the previously gifted property, as they might unwittingly purchase an asset that could be legally reclaimed.
Therefore, the lawyer concluded, it is essential to meticulously weigh all circumstances, ensure all necessary documents are correctly formalized, and thoroughly vet the property`s history. This diligent approach is crucial both when gifting real estate and when considering its subsequent purchase, to avoid unforeseen legal and financial complications.
This article provides general information and does not constitute legal advice. Always consult with a qualified legal professional for specific guidance regarding real estate transactions.
