SUMMARY OF THE ARTICLE
1.- What is revocation of gift for breach of charges.
Article 647 of the Spanish Civil Code allows revocation (cancellation) of a gift when the recipient fails to comply with the conditions or charges imposed at the time of donation. Charges are obligations the donor established in the gift deed. Maintaining a property. Caring for a person. Allocating money to a specific purpose such as purchasing a home. Etc.
2.- Requirements and procedure.
Revocation requires a judicial claim. It is not enough for the recipient to have breached and for this to be documented. It must be proven before a judge in judicial proceedings. The law does not set an exact deadline to claim. There is debate about its duration (between 1 and 5 years). Therefore, it is essential to act diligently from the moment the donor becomes aware of the breach.
3.- Consequences of revocation.
If the judge declares revocation, the gift is cancelled and the gifted asset must be returned to the donor. However, revocation does not affect the rights of third parties who acquired the asset in good faith or registered their rights in public registries.
When most people think of a donation, they typically imagine a gratuitous act without conditions. For example, simply gifting a house or sum of money to a child. However, the Spanish Civil Code recognises donations with conditions. That is, the donor can impose “obligations or charges” on the recipient. Allocating the asset to a specific purpose. Assuming certain obligations in favour of the donor. Etc. What happens if these conditions are not met? Is it possible to revoke the donation? In this week’s article we address how, when, and in what manner possible to revoke a gift for breach of charges.
What are charges in a donation?.
Charges are obligations that the donor establishes at the time of the donation. For example, a parent donating a property to a child with the obligation that they care for them. A grandparent donating money to grandchildren for their education or to purchase a habitual residence. The donation of land with the obligation not to sell it for ten years. Etc. The key is that these conditions or charges have been expressly agreed upon at the time of donation, in the public deed signed before a notary.
When can a donation be revoked for breach?.
The Spanish Civil Code allows revocation of the donationv if the recipient breaches those charges. However, it is not an automatic process. That is, mere breach is not sufficient. To revoke the donation it is necessary to initiate judicial proceedings. And the donor must prove that the recipient has indeed breached the charge or condition associated with the donation. It will be the judge who must analyse whether such charge actually existed. Whether it was clear and enforceable. And whether the recipient breached it. Not every breach justifies revocation, only that which substantially affects the purpose of the donation.
Is there a deadline to revoke a gift?.
However, the law does not expressly establish a specific time limit to bring this action. There are differing doctrinal and case-law interpretations, and debate exists both as to whether it is a limitation period or a forfeiture period, as well as regarding its duration (ranging between 1 and 5 years depending on the legal basis applied). In addition, in cases of continuous breach, the courts have held that the time limit may be effectively renewed. Given this uncertainty, it is advisable to act promptly once the donor becomes aware of the breach.
What happens once the donation is revoked?
The recipient will be obliged to return the asset to the donor. Nevertheless, art. 647 of the Spanish Civil Court itself includes an important safeguard. Revocation does not affect the rights of third parties who have acquired the asset in good faith or registered their rights in public registries. This means that if the recipient sold the property to a good-faith buyer, the buyer would retain it (even though the original donation is revoked). This protection is crucial in the transfer of assets.
The information provided in this article is not intended to be legal advice but merely conveys information relating to legal issues.
Conclusion.
Whether you have made a donation to a third party and they have breached the charges you imposed… or whether you are a recipient facing a claim to revoke a gift made to you, it is essential to obtain specialist legal advice. At White-Baos Lawyers we are experts in civil law, donations, and have extensive experience in the revocation of donations. Do not hesitate to contact us to protect your rights.
Carlos Baos (Lawyer)
White & Baos.
Tel: +34 966 426 185
E-mail: info@white-baos.com
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