Gift of Real Property to a Grandchild

QUESTION:
Can I, as a grandmother, gift my house to my granddaughter?

ANSWER:
When considering the gift of real property to a minor, the first question is whether the minor has the legal capacity to accept such a gift.

Pursuant to Section 9 of the Civil Code, a minor has the capacity only to perform legal acts that are “by their nature adequate to the minor’s intellectual and volitional maturity corresponding to his/her age.” It is therefore necessary to examine whether entering into a gift agreement transferring ownership of real property without consideration is an act appropriate to the minor’s capacity.

The case law of the general courts provides a fairly clear answer. According to the Supreme Court of the Czech Republic, Case No. 25 Cdo 1005/1999, “A minor is capable of accepting a gift if, in view of his/her age, he/she can be regarded as capable of understanding the nature of the gift agreement and if the gift represents a financial benefit for him/her, even of high value. A minor can, without any doubt, accept a gift of money or items customarily given on various occasions. On the other hand, he/she is not capable, without representation, of validly entering into a gift agreement that would result in subsequent obligations or restrictions significantly affecting his/her personal and property situation, or that would at least pose potential difficulties for the donee.”

In a similar vein, the Regional Court in Trnava, Case No. 25 CoP 57/2018, held that by gifting a majority co-ownership share (4/5) in an apartment with accessories, the minor acquires property of considerable value. However, as the majority co-owner, the minor is obliged to contribute to maintenance costs. During the period of minority, until the child becomes self-supporting, such costs should be borne by the parents under their maintenance obligation. Once the child becomes self-supporting, the parents’ obligation to cover maintenance costs ceases (though the obligation to cover usage costs continues in proportion to actual use), and if the parents are unwilling to pay voluntarily, the minor will have to bear such costs personally, in proportion to his/her ownership share.

If the gift agreement also includes an easement granting the parents the right to use the property for life, the court will again examine whether the easement is advantageous for the minor and whether it poses future risks, particularly any threat to the minor’s right of use in adulthood.

From a legal standpoint, gifting real property encumbered by a mortgage or other security right (e.g., in favour of a bank to secure a housing loan) may also be problematic. In such cases, the court would examine “the proportionality of the loan amount in relation to the value of the encumbered property” (Regional Court in Prešov, case reference omitted). The key criterion is again whether the gift of encumbered property would still represent a net property benefit for the minor (i.e., whether the property’s value significantly exceeds the outstanding loan amount).

See also: Court Approval of Acts on Behalf of a Minor