The Contract for Perpetual Maintenance Reviewed in Comparative Law

The contract is legally known to be the most common, and yet complicated legal work. In short terms, when it comes to the acquirement of property, this framework is usually defined by The Law on Property and Other Real Rights, differentiating from other contracts that are defined exclusively from The Law of Liabilities or Obligations. But with this topic, specifically the contract of perpetual maintenance its defined by The Law of Obligations, even though in most cases, this contract is used for immovable property alienation. This raises an internal complication of the matter, predominantly because it also incorporates the hereditary measure, in doing so, civil disputes are most likely to arise when there are individuals who are necessary heirs, or so the Hereditary Law classifies them, and if the claim exists so that they are deprived from receiving the goods inherited from the heiress bounded by law. The contract for eternal maintenance is a contract which is concluded through the maintenance provider and the maintenance recipient, with which the maintenance provider assumes the obligation to keep the other party or third person in eternal care, while the maintenance recipient is obliged to keep anything or any property right of the other party.

1. What is the contract for perpetual maintenance?

The contract for perpetual (or otherwise knowns as for lifelong) maintenance is usually concluded when an individual is unable, due to age, illness or incapacity to work, to work or use his property, which he owns, and he wants to ensure maintenance for himself.

So, this contract is entered into for the purpose of securing the maintenance for life for the maintenance recipient.

It is important to state the fact that this contract is more special, due to the fact that the fulfillment of the same, even though it is a relationship of obligation and on this basis the legal relations are inter vivo, otherwise between the living, the contract will be realized when the legal relationship passes into mortis causa, due to the fact that the retainer must die, so that the eternal care from the retainer ends and he becomes the owner of any thing or property right contracted.

2. The contract for perpetual maintenance regulated in the States of Western Balkans

The biggest differences in terms of these legislations are found in the cases where cancellation and termination of the contract are mentioned, while in terms of the form, parties and changed circumstances, the relevant articles are regulated almost the same. Croatia on one hand has one of the most sophisticated regulation of this contract such as separating it into two types, and not only, whereas Kosovo has the simplest, and yet most void regulation out of all.

For this topic, all of the states mentioned have a thing in common: the contract for perpetual maintenance needs to be notarized.

2.1. The contract for perpetual maintenance in Kosovo

The Law on Obligation Relations in Article 560 paragraph 1 defines the contract for perpetual maintenance as follows: "By means of the contract for perpetual maintenance, a contracting party (the retainer) undertakes to help the other contracting party or any other person (the retainer) and the other contracting party declares that he or she will deliver to the first (the retainer) all or part of his or her property, consisting of general property and movable property dedicated to to use and enjoy the general property, in which case such delivery is postponed until the time of the death of the transferor." As well as in paragraph 2: "2. This contract may also include other movable property of the retainer, which should be noted in the contract."

Given that this type of contract promises ownership in the hereditary measure (the grantor of maintenance), obviously the relevant rules from the hereditary field must be respected by the grantor of maintenance, in those cases where upon his death the inheritance will be opened by the legal heirs for the hereditary measure (its division).

The conditions for concluding a contract for lifelong maintenance are the same as for any formal contract, so that for its conclusion there must be: the working capacity of the parties and the consent of the will.

As for the object of this contract, the LMD does not foresee any article that defines it, but since we know that the object, except that it must be possible, permissible as well as determinable, also from the general rules as well as juridical science, civil applies the definition that the contractual obligation can consist of giving, acting, not acting or forbearance. From this, we can conclude that the object of the contract for eternal maintenance is exactly what the law foresees in the definition of the contract for eternal maintenance, the granting of maintenance (action) and the transfer/transfer of property from the holder to the holder after death his (giving). During this definition, we consider that this type of contract is a two-way contract.

The law is not very clear when it talks about the nullity of this contract. In article 564, the cases where this contract is annulled are expressly cited, although surprisingly, the first paragraph talks about the case when this contract is "severed", which is different from annulment, because the severance is a process that can be carried out without intervention of the court. In this regard, the annulment is determined only by par. 2 of this article, which clearly provides that "... their relationship deteriorates to such an extent that the common life becomes intolerable, each party can ask the court to annul the contract." Outside of the cancellation, the par itself also passes. 3 as par. 1 of Article 564, as follows: "Each party may request the termination of the contract if the other party does not fulfill its obligations", which means that there is a disorder in the categorization of cases that refer to "discontinuation" and "cancellation", which have essential differences between them, because the first is actualized in the case where there are deficiencies in terms of the performance of one party, while the second, depending on the absolute or relative nature, refers to deficiencies in the party or the object itself, its motive as well as its subject.

When the basis of the contract is clarified, it is realized that this contract is likely to hide some illegal basis, especially when we talk about the legal heirs from this part. From this point of view, care should be taken with fictitious contracts, so that in the event that the basis of the contract for eternal maintenance is hidden, for any other purpose, it is canceled ex officio by the court, where it will be seen that in the following sub-chapters, the relevant states have arranged the provisions in such a way that it is easier for judicial bodies to ascertain the intention in cases where its concealment is claimed, or when the matter is impossible.

2.2. The contract for perpetual maintenance in Albania

The Civil Code of the Republic of Albania entitles it as a contract for life annuity in article 1065, where it is determined that: "Life annuity can be created against remuneration (with lien title) through the alienation of a movable or immovable property or a sum of money."

In the Civil Code of Albania, a special characteristic of all the legislations of the Western Balkan countries is the fact that this contract does not at all provide for the form of the contract, therefore we can say that it usually appears as an informal contract, so the parties enter into the contract without any predetermined form, in writing, orally, silently, etc. But, bearing in mind articles 750 and 754 of the Civil Code, it is understood that when it comes as a result of the alienation (sale, donation) of an immovable object, necessarily for the effect of validity, it must be done by a notarial deed and registered in it otherwise it is invalid

Another characteristic of the regulation of this contract by the Civil Code is the fact that it can also be regulated by will and/or by the contract for the gift, as provided in par. 2 of Article 1065: "Life annuity can also be created through a donation or a will, respecting the requirements of the law for such legal actions.", this arrangement which is not foreseen by other legislations, and which can be viewed in a positive aspect as an obligation with higher validity, thanks to the presentation of dilemmas from hereditary right.

2.3. The contract for contract for perpetual maintenance in Croatia

The Law on Obligations of the Republic of Croatia initially foresees two types of this contract; Contract for maintenance during lifetime and Contract for lifelong maintenance.

The Croatian law distinguishes this division from that in the lifelong maintenance contract, the ownership of the maintenance recipient will be acquired by the grantor after the recipient's death, while in the maintenance during lifetime, the consideration acquired by the maintenance grantor for the maintenance that he offers to the receiver, will be transferred from time to time to his ownership (whether immovable or movable property), with the difference that the second contract is made for the benefit of a third person.

The Croatian law is much stricter in terms of the formal regulation and conditions of the contract, unlike other legislations, so that in both types of contracts, it is foreseen that the provider of the maintenance must necessarily fulfill the maintenance of: the place or the way of living common to the maintenance grantor and the maintenance recipient, the maintenance obligation for the maintenance recipient, general health care and during illness, as well as the expenses of the maintenance recipient's death ceremony.

We do not find this specification of the purpose or subject of this contract in the laws of other countries, so in practice in many cases the dilemma appears if we have a claim of non-fulfillment of this contract, when in certain cases these are not foreseen essential conditions not even in the notarial deed, let's say, but from the above-mentioned Croatian law, the party that will demand the fulfillment of the contract has a much easier time to argue in the non-fulfillment of the basic conditions, since the same are normed, which unlike the Republic of Kosovo, they are recognized only by legal science and not by the law of Kosovo.

2.4. The contract for perpetual maintenance in Montenegro

From the Law of Obligations of Montenegro, the contract for lifelong maintenance is otherwise named as the contract of maintenance for life, which, unlike the law of Kosovo, is regulated in detail and foresees every circumstance from the connection of this contract.

First, there is a special article which talks about the special basis for the invalidity of the contract (Article 1077), where it is determined that: "The contract according to which the maintenance provider must be a natural or legal person who takes care of the beneficiary of maintenance within the scope of the exercise of his profession or business activity (medical staff, hospitals, agencies of various types and similar) will be invalid, unless permission is obtained from the public agency responsible for guardianship before the conclusion of the contract."

In article 1080, which talks about the right of the legal heirs of the beneficiary of support, where it determines that:

(1) At the request of the legal heirs of the maintenance recipient, the court can cancel the maintenance contract for life, if due to the illness or age of the maintenance recipient, the contract did not present any possibility for the maintenance provider;
(2) The legal heirs may request the cancellation of the contract within one year from the date of recognition of the contract, and at the latest within three years from the date of the recipient's death.
(3) The period of one year cannot begin to run before the death of the recipient.
From this it is implied that the legal heirs of the recipient of maintenance can also request cancellation in cases where the maintenance was not necessary, and they request this after the death of the recipient of maintenance.

As for the termination, the law of Montenegro foresees two cases: when the relations between the receiver and the maintenance provider are disturbed (Article 1082) and when the circumstances change without the will of the parties (Article 1083).

Literaturverzeichnis
Zitierte Literatur: 
  • A.B, E.H, H.K, I.I, H.G, I.M, A.P, A.H, M.B, R.M, “Introduction to the legal system in Kosovo”, Pristina 2019
  • Dauti Nerxhivane, "Contracts", Pristina 2016
  • Charman Mary, “Contract Law”, London UK 2007
  • Francesco Galgano "Private right", Tirana 1999
  • Sylejmani Shukri, Haxhibeqiri Erdogan, Kelmendi Isa, Zogaj Albert "Summary of the Practice of the Supreme Court in property disputes", Pristina 2019
Weitere Literatur: 
  • Dauti Nerxhivane, Berisha Ruzhdi, Vokshi Adem, Aliu Abdulla, Blakaj Sefadin, "Commentary on the Law on Obligations - Book II", Pristina 2013
  • Constitution of the Republic of Kosovo