Where an elderly person, or one in need of care, leaves their assets to another in return for being looked after for the remainder of their life, the arrangement is in practice most often given effect through the transfer of an immovable. This relationship, known as a contract of maintenance until death, is not merely an undertaking to provide care, given its structure imposing obligations on both parties; it is at the same time a disposition that brings about a change in ownership.
The dispute generally arises once the transfer of the title deed has been completed. In some cases no care is provided at all, or it remains merely nominal; in others it emerges that the contract never carried a genuine purpose of care from the outset. Against this background, the question of returning the transferred immovable to the maintenance creditor or to their heirs comes to the fore, and the claim is pursued by way of an action for annulment of title deed and registration. In the proceedings both the validity of the contract at the formation stage and the extent to which the parties have performed their obligations are examined together.
In this briefing note we address, in systematic fashion, the grounds on which transfers of immovables made in return for care may be annulled, the parties to the action, the applicable time limits, the conduct of the proceedings and the legal consequences of the judgment to be given.
Definition and Function of the Contract of Maintenance Until Death
The relationship whereby a person transfers assets — in practice most often an immovable — to the other party in return for an undertaking to be looked after and cared for throughout their life is termed a contract of maintenance until death. Owing to the character it bears, this structure, which gives rise to reciprocal obligations, produces consequences in the field of inheritance law as much as in the law of obligations.
Legal Nature of the Contract
The contract is onerous; each party assumes an obligation. While the maintenance creditor undertakes to transfer assets, the maintenance debtor comes under an obligation to look after and care for the other party throughout their life. The legislator has made this contract subject to official form; in practice, the contract is most often concluded simultaneously with the transfer effected before the land registry directorate.
The Link Established with the Transfer of Title
In the great majority of cases, the contract takes effect in fact upon registration of the immovable in the name of the maintenance debtor. Because of this close link, any invalidity or defect in performance arising under the contract directly unsettles the legal position of the land registry record and turns the dispute into a contest over ownership.
Purpose of the Annulment and Registration Claim
The result sought in actions founded on a maintenance contract is twofold: setting aside a transfer effected without a valid legal cause, and making the true holder of the right visible once more in the register. Two matters are addressed together in the proceedings: does the contract remain legally standing, and have the parties performed the obligations they assumed?
Grounds of Invalidity Arising at the Formation Stage
Whether a contract of maintenance until death can produce effects depends on the parties’ intentions being free from defect, on compliance with the formal rules required by law, and on the parties possessing legal capacity to act. The absence of any one of these elements deprives the contract of its legal force. A registration effected in reliance on such a contract becomes a wrongful registration, since there is no valid legal cause behind it; in that event the annulment of the record and the entry of the immovable in the name of the true holder of the right may be sought.
Simulation: Divergence Between True Intention and Declaration
Where the parties knowingly keep what they have agreed between themselves distinct from what they declare to the outside world, simulation arises. Although a contract of maintenance until death appears to have been concluded, if a gift or some other legal transaction is in truth intended, the outwardly expressed contract is void because it does not carry the parties’ true intention. Since recourse to this route is particularly observed where the motive is to conceal assets from the heirs, such transactions are heavily litigated in practice.
Absence of a Genuine Intention to Provide Care
For the contract to remain standing, the maintenance debtor must hold a serious and sincere intention to look after the other party for life. Where no such intention exists and the contract has been concluded only in appearance, in order to bring about the change of hands of the immovable, the legal cause of the transaction falls away. In that event the contract is treated as invalid and the annulment of the transfer of title founded upon it may be sought.
Mistake, Fraud or Duress
If, at the time the contract was concluded, one of the parties fell into a fundamental mistake, was subjected to deception by the other party, or was placed under duress, a defect in intention arises. In such cases the annulment of a contract entered into with a defective intention may be sought. Once the right of annulment is exercised, the acts of disposition connected with the contract likewise lose their legal foundation.
Failure to Observe the Official Form Requirement
The legislator has counted the contract of maintenance until death among the contracts subject to official form. Validity therefore depends on the contract having been drawn up in official form. Contracts concluded without compliance with this requirement are absolutely void; a transfer of title founded on such a contract may likewise be made the subject of annulment, since it is left without a valid legal cause.
Lack of Capacity
If one of the parties lacks legal capacity to act, the contract is invalid from the moment of its conclusion. The loss of the capacity of discernment on the date of the contract by reason of advanced age, mental illness or similar causes is assessed within this scope. In disputes of this kind, medical records and examinations by court-appointed experts play a decisive role in clarifying the person’s condition on the date of the transaction.
Non-performance of the Care Obligation and Breach of Contract
The principal obligation of the maintenance debtor is to meet the material and non-material needs of the other party throughout their life, to keep them under supervision and to protect them. If that obligation is not performed at all, or is not duly performed, a breach of contract arises. Where the circumstances of the particular case so permit, that breach affords the opportunity to raise the annulment of the land registry record and registration together with the termination of the contract. In disputes of this kind the courts are not satisfied with the existence of care in appearance; they weigh together the scope of the care, whether it has continued without interruption, and how it has been reflected in the living conditions of the maintenance creditor.
Complete Failure to Perform the Obligation
Where the maintenance debtor in fact performs none of the obligations assumed under the contract, there is a plain and grave breach. Since the continuation of such a relationship cannot be expected, the maintenance creditor or their heirs may raise together the termination of the contract and a claim for annulment of title deed and registration directed at recovering the transferred immovable.
Inadequate or Defective Performance
The provision of care in merely nominal fashion, or its incomplete performance without any regard to the creditor’s advanced age, state of health and social needs, likewise constitutes a breach. The lack of continuity in the care, the failure to meet basic needs, or the neglect of the maintenance creditor are each accepted in the proceedings as significant criteria of assessment for the purposes of termination of the contract and annulment of the transfer.
Leaving the Care Obligation to Third Parties
The care obligation is, as a rule, regarded as an obligation closely bound to the person of the debtor. For that reason, the debtor’s assignment of the obligations arising under the contract to third parties, or the leaving of the care entirely in the hands of others, may be treated as a breach of contract. Pursuant to Article 83 of the Turkish Code of Obligations No. 6098, the debtor is not obliged to perform the obligation in person unless the creditor has an interest in performance by the debtor personally. Nevertheless, since in a contract of maintenance until death the persons of the parties are, by the very nature of the contract, to the fore, performance must be expected from the maintenance debtor in person.
Breakdown of the Relationship of Trust and Intolerability of Living Together
The personal and continuing relationship between the parties is among the constitutive elements of this contract. Where that relationship is damaged, where mutual trust is lost, or where living together becomes intolerable for the maintenance creditor, the continuation of the contract cannot be reconciled with the rule of good faith. In such cases a claim for termination may be raised, as may the associated claim for annulment of the record and registration be brought before the court.
Parties to the Action
In actions for annulment of title deed and registration founded on a maintenance contract, the correct identification of the parties is decisive for the proper conduct of the proceedings. As a rule the capacity of claimant belongs to the maintenance creditor who parted with the immovable in return for a promise of care; the respondent is the maintenance debtor who took the transfer and became owner in the register.
If the immovable has subsequently passed into the hands of third parties, the frame of the action widens and it may become necessary for everyone appearing as a right holder in the land registry to take part in the proceedings. An incomplete identification of the parties is a serious procedural error leading to dismissal of the action or to the needless prolongation of the process.
Capacity of Claimant
The action is as a rule brought by the maintenance creditor. The maintenance creditor is entitled to demand the return of the immovable they transferred, on the ground of the invalidity of the contract or of a breach of contract. The power to bring the action is not confined to them alone: a guardian or trustee in respect of persons under guardianship, the heirs succeeding to the estate upon the death of the maintenance creditor, and other interested persons having a legal interest worthy of protection in the outcome of the dispute may likewise bring this action.
Where the maintenance creditor has died, the heirs have the opportunity to bring the action in proportion to their own shares in the inheritance.
Capacity of Respondent and Standing to Be Sued
Standing is as a rule directed at the maintenance debtor who took the transfer of the immovable and appears as owner in the land registry, since the registration whose annulment is sought was made in their name.
If the immovable has subsequently changed hands, the action must be brought against the person appearing as the last owner in the register. The particular circumstances of the file may require the joinder to the proceedings of previous owners or of other persons connected with the matter. For that reason, the careful examination of the land registry records gains importance in files where there has been movement in the chain of transfers. Among the persons against whom standing may be directed are the holders of rights in rem over the immovable, the owners who subsequently took the transfer and third parties, together with the maintenance debtor who took the first transfer.
Cases Involving Mandatory Joinder of Parties
In some cases it is mandatory for the action to be directed jointly at several persons. Particularly where the immovable has been transferred to more than one person, or where different rights in rem have been established over it, all of those concerned must be joined to the proceedings.
Otherwise the action may be dismissed for failure to join a necessary respondent.
Rules on Time Limits
The time limit applicable in actions for annulment of title deed and registration based on a maintenance contract varies according to the legal ground on which the claim rests. The nature of the allegation raised is therefore taken as the basis in determining the statute of limitations or the preclusive period.
In some files the claim is founded on the invalidity of the contract, in others on a breach at the performance stage; it is therefore not possible to speak of a uniform practice as regards time limits.
Time Limits in Cases of Absolute Nullity
Where reliance is placed on grounds of absolute nullity such as simulation, lack of capacity or a defect of form, as a rule no statute of limitations or preclusive period runs.
Since in such cases the land registry record takes on the character of a wrongful registration, the registration of the immovable in the name of the true holder of the right may be sought at any time.
The One-Year Preclusive Period Where Intention Is Defective
If the claim for annulment is founded on cases of defective intention such as mistake, fraud or duress, the 1-year preclusive period provided for by the Turkish Code of Obligations No. 6098 applies.
The period begins at the moment the mistake or deception is discovered, or at which the pressure of the duress is lifted. Once that period is missed, the right of annulment lapses.
Limitation for Claims Based on Defective Performance
Since an allegation that the care obligation has not been duly performed falls predominantly within the category of breach of contract, the rules on limitation relating to obligations come into play here.
Within this framework the 10-year statute of limitations is as a rule taken as the basis, while the starting point of the period is determined according to the circumstances of the particular case.
Indeed, the Court of Cassation has held that, where the immovable was delivered to the maintenance debtor upon the conclusion of the contract and left to their actual use, raising a defence of limitation cannot be reconciled with the rule of good faith.
Judgment of the 14th Civil Chamber of the Court of Cassation, docket no. 2015/18205, decision no. 2017/1895:
“No special limitation period has been laid down by law for contracts of maintenance until death. The limitation period to be applied here is the 10-year limitation period pursuant to the provision of Article 125 of the Code of Obligations. Without doubt, this period runs not from the date on which the contract was made but from the date on which the claim became due, that is, from the date of death of the maintenance creditor. Where the property forming the subject matter of the contract of maintenance until death is an immovable and has, upon the making of the contract, been delivered to the maintenance debtor and left to their actual use, in such cases a plea of limitation cannot be given weight, since raising it would not be compatible with the rule of honest conduct set out in Article 2 of the Turkish Civil Code No. 4721.”
Limitation Where Simulation by the Deceased Is Alleged
In the decisions of the Court of Cassation, where it is accepted that the maintenance contract was concluded with the motive of concealing assets and that simulation by the deceased is present, the dismissal of the action on grounds of time has not been found correct even though a very long period had passed since the transaction (44 years in the case examined), and the judgment of the first-instance court was quashed.
Judgment of the 1st Civil Chamber of the Court of Cassation, docket no. 2014/14726, decision no. 2016/3328:
“In the present case, it was alleged that the transfers made by the deceased on 25.11.1965 to …, the father-in-law of his son … and the father of the respondent daughter-in-law …, and from him to the respondent heirs, were made with the aim of concealing assets from the heirs and were simulated, and the court dismissed the action on the ground that an action brought 44 years after the transfer was not compatible with the provision of Article 2 of the Turkish Civil Code No. 4721. It is clear that in actions founded on the legal ground of simulation by the deceased there is no possibility of applying a statute of limitations or a preclusive period, and that, given the nature of the action, allegations of this kind may be raised at any time without being made subject to a time limit.”
Transfer to a Third Party, Good Faith and Time Limits
Where the immovable has been passed on to third parties, the question whether the transferee acted in good faith is debated alongside the time limits. If the immovable has passed to a third party acting in good faith, the annulment of the title deed may not be available.
In such a situation the claimant’s demand most often loses its character as a right in rem and turns into a claim for damages.
Effect of the Moment of Discovery on Time Limits
It is possible for the ground of invalidity or of breach to be discovered subsequently. In cases of this kind, the moment of discovery becomes decisive in determining when the statute of limitations and the preclusive period begin to run.
For that reason, in calculating time limits regard should be had not only to the date on which the transaction took place, but also to the moment at which the breach was discovered.
The Proceedings
Although this type of action produces effects in rem as regards ownership of the immovable, in essence it requires review of the contractual relationship between the parties. For that reason the land registry records are examined in the proceedings together with the validity of the contract and the state of its performance.
Court with Subject-Matter and Territorial Jurisdiction
In these actions subject-matter jurisdiction belongs as a rule to the Civil Court of First Instance.
As regards territorial jurisdiction, the action is heard by the court of the place where the immovable is situated, and that jurisdiction is exclusive. If the action is brought before the court of another place, a decision of lack of territorial jurisdiction will be given.
Interim Injunction and Annotation Prohibiting Transfer
One of the most critical procedural steps in the proceedings is preventing the immovable in dispute from being passed on to third parties while the action is pending. It is therefore of great importance that an interim injunction be sought from the court together with the statement of claim, or while the proceedings are under way.
If the claimant establishes its allegation on a prima facie basis, the court may order that an annotation prohibiting sale and transfer be entered in the land registry. This protection serves as an important safeguard preventing the action from remaining fruitless even if it is won.
Proof and Evidence
Although the framework of proof varies according to the legal ground relied upon, concrete evidence is required as to whether the care obligation has been performed and as to the validity of the contract. The principal items of evidence that come to the fore in practice are as follows:
- Conducting an on-site examination and having recourse to an examination by a court-appointed expert
- Medical reports and medical records relating to the maintenance creditor
- Correspondence between the parties
- Payment documents and bank account movements
- Land registry and cadastral records
- Statements of persons who witnessed the events
The details concerning the regime of proof have also been addressed in the sections above.
Court Fees and Litigation Costs
These actions are as a rule subject to a proportional court fee. When the action is brought, the fee calculated on the basis of the value of the immovable must therefore be paid. While the proceedings are under way, further items may arise in addition, such as the costs of the on-site examination, the fees of court-appointed experts, the sums payable to witnesses and the costs of service.
Once the proceedings are concluded, these items are as a rule left to be borne by the party who has lost the action.
Attorney Fees
In files for annulment of title deed and registration conducted on an allegation of concealment of assets from the estate, the attorney fee is awarded on a proportional basis over the value established by the determination made by the court. In favour of the party winning the proceedings, an order is made for the recovery of an attorney fee from the other side on the basis of the Minimum Attorney Fee Tariff.
Alongside this, an attorney fee arising from the agreement between the client and the lawyer may also come into play; that item may be claimed separately according to the outcome of the action.
Appellate Remedies
Judgments given in actions for annulment of title deed and registration are not final in character and are open to review by the higher courts.
- Appeal: It is possible to apply to the Regional Court of Appeal within the 2-week period that begins to run once the reasoned judgment has been served.
- Appeal on points of law: Against the decision given by the appellate chamber, recourse may be had to the Court of Cassation within the 2-week period following service. Whether this route is available is determined according to the monetary threshold updated each year by the revaluation rate.
Enforceability: Pursuant to the Code of Civil Procedure No. 6100, these judgments cannot be enforced before they become final. Even where a judgment of annulment has been obtained from the court, the registration in the land registry cannot be carried out until the appeal and appeal on points of law stages have been completed and the judgment has become final.
Outcomes of the Action
The court first assesses whether the contract is valid and whether the parties have duly performed the obligations arising under it. If the invalidity or the breach is proved, the conclusion is reached that the legal cause on which the land registry record rests has fallen away.
In that event, according to the features of the particular case, the annulment of the record and the registration of the immovable in the name of the claimant may be ordered. Where the conditions are not made out, the action is dismissed.
Annulment of the Land Registry Record
If the court establishes that the legal cause of the act of disposition has fallen away by reason of the invalidity of the contract or of a breach of contract, the annulment of the registration of the immovable made in the name of the respondent is ordered.
With that judgment, the record appearing in the register, now left without foundation, is deleted. The annulment of the land registry record is a constitutive intervention directed at bringing the right in rem into conformity with the law.
Registration of the Immovable in the Name of the Claimant
Together with the annulment, the court orders the registration of the immovable in the name of the claimant. That decision is a constitutive one which re-establishes the right of ownership in favour of the claimant.
The register thereby comes to correspond with the legal position actually existing between the parties; the contradiction between the owner on paper and the true holder of the right is removed.
Claim for Damages
Where the immovable has passed to third parties acting in good faith who benefit from the principle of reliance on the land registry, it may not be possible to raise a claim in rem. In that eventuality the third party’s right of ownership is protected.
In such situations the claimant’s demand loses its character in rem and evolves into a personal claim for damages. The scope of the damages is determined within the framework of the general provisions; in the calculation, the market value of the immovable and the loss arising are most often taken as the measure.
Termination of the Contract and Liquidation
In actions brought on an allegation of breach of contract, the court may also order the termination of the contract. With the judgment of termination, the contractual relationship between the parties comes to an end with effect for the future.
That termination as a rule places the parties under an obligation to return what they have received. Within this scope, the return of the immovable and the liquidation of the reciprocal obligations come into play.
Independent Legal Assessment
Transfers of immovables made in return for care, although their legal foundation rests on a single contract, are in practice opened to argument along two separate lines: a defect in the formation of the contract, and a breach at the performance stage. These two lines differ from one another in their evidential requirements, in the regime of time limits to which they are subject, and in the relief sought. Establishing the legal characterisation correctly from the outset in the statement of claim is the first and most critical step, and it determines the whole of the proceedings.
The second element that determines the course of the dispute is timing. If the immovable passes to a third party acting in good faith, the claim in rem is closed off and the file turns into a personal action for damages. This risk explains why a request for an interim injunction must not be neglected when the action is brought.
When a road map is drawn up in a particular file, the following headings should be addressed as a priority:
- Clarifying whether the claim is to be founded on invalidity or on breach of contract, and determining the regime of time limits accordingly
- Assessing legal capacity to act on the date of the contract in advance, through medical records
- Collecting payment, health and witness evidence as to whether care was in fact provided, before the action is brought
- Examining the chain of transfers in the land registry and directing standing at all those concerned, including the last owner
- Seeking an annotation prohibiting transfer over the land registry record at the same time as the statement of claim
- Preparing a claim for damages in the alternative, against the possibility that the claim in rem is closed off
Independent Legal provides advisory services and conducts litigation throughout the entire process in disputes arising from contracts of maintenance until death, from the review of the validity of the contract to the correction of the land registry record.