A lifetime contract as a named contract has been comprehensively regulated in the Civil Code in Articles 908 – 916 of the Civil Code. Literal and systemic interpretation qualify annuity as an obligation relationship, which may contain elements of limited rights in rem, e.g. easement of habitation.
The essence of an annuity consists in a demand (claim) by the annuitant (the seller of the property) to provide him/her with lifelong support by a person (buyer of property) who, in exchange for the life tenancy right, acquires from the annuitant the ownership of the property. Under pain of nullity, the lifetime contract must be drawn up in the form of a notarial deed.
The annuity should satisfy the annuitant’s living needs, the purchaser of the property should in particular:
(i) accept the annuitant as a household member and provide him/her with a place to live,
(ii) provide food, clothing, light and fuel,
(iii) assist with care and during sickness,
(iv) arrange for a funeral according to common custom.
The parties may establish a limited right in rem in the form of usufruct in the lifetime contract, as well as reserve a personal easement, including an easement of habitation.
The easement of habitation as a limited right in rem and a special form of personal easement, is regulated in the Civil Code in Article 301 of the Civil Code.
The essence of the easement of habitation consists in allowing the entitled person to reside in someone else’s property. The right of easement of habitation is established in the form of a notarial deed and is disclosed in section III of the encumbered property.
The main difference between the legal institutions in question is the scope of the benefit, which in the case of an annuity is for the satisfaction of the annuitant’s living and subsistence needs, while in the case of an easement is limited to the provision of a dwelling in the property.
Further comparisons of the legal institutions:
(i) the different nature of an annuity (an obligation ) and an easement of habitation (a limited property right),
(ii) the different function of an annuity (satisfaction of living needs) and an easement of habitation (provision of an easement of habitation),
(iii) the different scope of the provision of an annuity (broader) and an easement of habitation (narrower),
(iv) an annuity and an easement of habitation are non-transferable (entitlement to change to a lifetime pension in the case of an annuity),
(v) an annuity and an easement of habitation as personal property rights are not inheritable.
In conclusion, in the case of the disposal of tangible property in the form of real property, it seems reasonable to secure one’s own livelihood in the manner described above.
20 August 2023
