Civil Rights Project Sisak (CRP Sisak) during the month of April 2023 launched an advocacy activity aimed at changing the name of lifelong support contracts and support until death contracts, i.e. abolishing support until death contracts as a dangerous type of contracts, introducing a registry of relevant contracts, more detailed regulation of contract termination, by emergency procedure, due to the life expectancy of the support recipients, and limiting the number of signed contracts for the support provider. The subject advocacy activity of CRP Sisak consequently had an impact on the amendments to the legislation in December 2023, but not in all the requirements/parts that we set during our advocacy activity.
We must point out that in her report for 2022, the Ombudsman also pointed out that in 2022, around seven and a half thousand elderly people signed lifelong support contracts and support until death contracts, thereby exposing themselves to the risk of abuse, and stated the need to introduce additional protections mechanisms.
Precisely, because of years of criticism from the public, recommendations provided by the legal professionals to better regulate lifelong support contracts and support until death contracts with the aim of protecting, above all, the recipients of support, changes were made to the Obligatory Relations Act/Act on Amendments to the Obligatory Relations Act, Official Gazette 155/2023/ and the Civil Procedure Act /Act on Amendments to the Civil Procedure Act, Official Gazette 155/2023 which entered into force on December 30, 2023.
Here are the changes to the Obligatory Relations Act /Section 9/Art. 579-589.
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Amendments regarding contract title:
SUPPORT UNTIL DEATH CONTRACT / WITH SIMULTANEOUS TRANSFER OF PROPERTY
LIFELONG SUPPORT CONTRACT / WITH TRANSFER OF PROPERTY AFTER DEATH
The main difference between these contracts relates to the moment of transfer of property to the support provider. In the case of support until death contract, the property of the support recipient passes to the support provider during the lifetime of the support recipient, while in the case of the lifelong support contract the property of the support recipient is transferred to the support provider at the support recipients time of death.
It remains to be seen whether the mentioned changes to the titles of the contracts will in practice bring a significant improvement to the level of information of the contracting parties. Namely, older people, due to fear or legal uncertainty, may once again conclude that these are similar or almost the same contracts, because the names of the contracts themselves, recognized or not, are harder to read and perhaps too long for that type of population.
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Introducing a registry of relevant contracts
The registry of lifelong support contracts and support until death contracts was established in order to implement the legal restriction on entering into contracts. Namely, according to the amendments to the law, it is allowed to have lifelong support contracts and support until death contracts concluded simultaneously with a maximum of 3 support recipients. /Art. 580 paragraph 1 and paragraph 2 of the Obligatory Relations Act/. A contract concluded contrary to this provision is VOID.
This introduces the obligation of an authorized person to verify the number of support recipients with whom the support provider has concluded lifelong support contracts and support until death contracts before certifying or drawing up the contract.
The registry is maintained by the Croatian Chamber of Notaries, and it contains data on concluded, amended and terminated contracts, as well as data on court proceedings that are initiated to determine the invalidity, annulment or termination of contracts.
The above-mentioned legal amendment was intended to prevent the appearance of “professional support providers” for whom, unfortunately, it has become a business, and these are most often self-interested individuals who entered into a large number of contracts, and at the same time did not fulfill their contractual obligations as providers of support, but had the goal of acquiring valuable property to the detriment of the recipient of the support.
It is important to note that the new provision of the Act will not have any impact on the remediation of existing situations in which the maintenance provider has concluded more than three contracts, because the new provision applies only to newly concluded contracts, i.e. after the amendments to the Obligatory Relations Act comes into force.
The question arises whether this gives us room for support providers to organize differently, i.e. create groups of related individuals/spouses, brothers, sisters, relatives, trusted persons/ and as a group, conclude a large number of contracts, while formally complying with legal restriction.
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Additional protection measures
Noting of the lifelong support contract in the land registry (for real estate) or in the public registry (for movable property or rights).
The legal amendments provide for the obligation of the public notary, before whom the lifelong support contract is concluded, to deliver the contract to the land registry court, which will record the contract in the land registry, and in the case where the subject of the lifelong support contract is movable property or rights, the contract is submitted to the body that manages the public register, for the purpose of entering a note.
Obligation to establish easement rights
By mandating the establishment of servitude, the abuse of a support until death contract is prevented, that is, it is ensured that the person requesting support can live in the property until his/her death.
In addition, the recipient of the support, in the case where the subject of the contract is a real estate, can determine that the actual burden of the support is based, registered on it in land registry in his/her favor.
This introduces an additional instrument for the protection of the support recipient, if the support provider does not respect the contract and does not support the person.
The aforementioned legal solution is useful for the purpose of protecting the support recipients.
- Legal instruction to contract parties
Legal provision of Art. 580 paragraph 5 stipulates the obligation that, when certifying or drawing up a contract, an authorized person reads the contract to the contracting parties and warns them in understandable and clear words about the rights and obligations arising from the contract. Likewise, the authorized person must check by direct observation whether both contracting parties have understood their rights and obligations.
In addition to the aforementioned instruction, the Act also prescribes the necessary content of the contract as an additional instrument of protection. In order to precisely define the rights and obligations that meet the specific needs of the parties, the contract must clearly define the place of residence of the support recipient and the obligations of nutrition, care and health care.
Additional protection instruments are introduced in order to strengthen the mechanisms for preventing the abuse of lifelong support contracts.
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Urgency of the procedure
Amendments to the Civil Procedure Act stipulate that all procedures that are conducted for the purpose of modification, termination, invalidation and annulment of lifelong support contracts and support until death contracts are urgent.
These changes will speed up the procedures for amending, terminating, determining nullity, and canceling of the lifelong support contracts and support until death contracts.
Whether these procedures will be urgent in practice depends on the subjective and objective capabilities of the specific court, i.e. the judge. Numerous other procedures, such as family ones, are defined as emergency procedures and last for years. There is a fear that this will be more of a declaratory provision, i.e. just a note to the court.
Conclusion:
According to all of the above-mentioned changes, it remains for us to see in practice how they will be implemented and whether the intended goal will be achieved. CRP Sisak will continue to be involved in the issue of contractual support through the projects it implements, which concern the elderly population.
All together, we are obliged to continue to raise the level of information of senior citizens about the advantages and disadvantages of entering contracts on lifelong support and support until death related to the fulfillment of contractual obligations, as well as the meaning and legal consequences of these contracts.
LEGAL INFORMATION AND LEGAL ADVICE ARE PREVENTING ABUSE OF LIFELONG SUPPORT CONTRACTS AND SUPPORT UNTIL DEATH CONTRACTS, AS WELL AS REDUCE VIOLENCE AGAINST ELDERLY PERSONS!!!
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