Reclaiming a Gift: When and How Can a Gift Be Revoked?
The Revocation of a Gift Contract: Legal Options
A gift contract is established when a property (whether movable or immovable) is transferred into the ownership of another person free of charge. In the legal world, the most common scenario involves a relative (most often a parent or grandparent) gifting real estate to another relative (most often a child or grandchild). However, it is a daily occurrence that the donor later wishes to get the gift back, because the gifted party did something, or the relationship deteriorated to such an extent, that the donor now considers them unworthy of the gift.
In a technical sense, there is a difference between subsequently contesting or terminating a gift contract and the actual reclamation of the gift itself. The general rules applicable to all contracts apply to contesting or terminating a gift contract; thus, like any contract, it can be declared invalid by a court under certain conditions or can be terminated (e.g., through rescission). However, civil law rules provide additional help in the case of a gift contract by granting the donor more opportunities to somehow recover the gift. The reasoning behind this is that the donor gives something for free and receives nothing in return, so there is obviously no balance in the transaction. Therefore, the law provides the donor with the additional entitlements detailed below: the right to reclaim the gift. With these rights, the donor does not challenge the contract itself (which can be a very difficult and limited option), but can get the gift back under certain conditions, regardless of the general rules applying to contracts.
The law provides 3 scenarios for reclaiming a gift if the gifting has already taken place:
- 1st scenario: When, after the gifting, the donor's livelihood becomes endangered and they need the gift to support their livelihood, but only if this does not simultaneously endanger the livelihood of the gifted party. To use a stark example: if a parent gifts a property to their child and later loses their own housing, they cannot reclaim the property if the child's housing could not be secured otherwise. The gifted party is also not obliged to return the gift if they provide a proper livelihood for the donor. Using the previous example, if the gifted party rents an apartment for the parent who lost their housing, thereby ensuring their livelihood, the property cannot be reclaimed.
- 2nd scenario: If the gifted party or a relative living with them commits a serious violation against the donor or a close relative of the donor. The violation does not necessarily mean a criminal offense; it can also be a civil law violation (e.g., a violation of personal rights). What qualifies as a serious violation is always evaluated based on all the circumstances of the given case. In this second case, not only the gift but also the value that replaced it can be reclaimed; thus, if the gift was money and they bought a car with it, the car can be reclaimed.
- 3rd scenario (and also the most common): When the donor gives the gift with an assumption that subsequently fails permanently. It is an everyday occurrence that a gift is given based on some assumption (and not a condition!), typically tied to major events. For example, when a parent buys a car for their child with the assumption that the child will graduate from university. The assumption is clear: the child must graduate from university, and they received the gift solely for this reason. If the child does not graduate from university and does nothing toward it even after years have passed, we can reasonably state that this assumption has permanently failed, and the gift can be reclaimed. However, in this third scenario, many circumstances can be important. The first and most important is whether the gifted party was aware that they received the gift based on that specific assumption (e.g., obtaining a degree). If they did not know and could not have known, the gift cannot be reclaimed. If they knew or should have known (e.g., it was written in the gift contract, or the parent handed over the keys to the new car at a family dinner in the presence of several witnesses, explicitly stating that the new car is tied to obtaining the degree), then the gift can be reclaimed. What the assumption was and whether the gifted party was aware of it is the most frequent question in such lawsuits and requires a thorough investigation.
Reclaiming Real Estate Gifts and Statue of Limitations Rules, Reclaiming Monetary Gifts
The law does not distinguish between reclaiming movable property or real estate gifts; therefore, the general rules for reclaiming gifts apply to reclaiming real estate as well as reclaiming monetary gifts. It can certainly be said that lawsuits for reclaiming real estate gifts are far more common than lawsuits for reclaiming movable property. This is also because the law states that gifts of standard value cannot be reclaimed, and if the subject of the gift is real estate, it presumably does not qualify as a standard value.
In civil law, the general statute of limitations is 5 years, unless the law stipulates otherwise. In the case of reclaiming a gift, the statute of limitations is the general 5 years, which means it is also 5 years for reclaiming a real estate gift.
Regarding the statute of limitations for reclaiming a gift, the question is when the limitation period itself begins, and not necessarily when the gifting took place. The answer to this depends on which of the 3 scenarios above forms the basis of our reclamation:
- If we reclaim it on the grounds of the livelihood being endangered, the limitation period begins when the livelihood became endangered;
- In the case of a serious violation, it begins when the violation occurred;
- In the case of the permanent failure of an assumption, it begins when the condition permanently failed, or when we can reasonably conclude that it will permanently fail (using our example above, if the child has not finished university even after 10 years and has not had student status for a long time, it can be reasonably assumed that they will never graduate from university).
The statute of limitations means that after it expires, we cannot enforce our claim through court proceedings, meaning we cannot sue.
Gift Reclamination Deadline and Forfeiture Conditions
Apart from the statute of limitations, time plays another very important role: if the donor does not reclaim the gift for a longer period of time without an appropriate reason, it must be considered that they have waived their right to reclaim the gift.
This means that even within the limitation period, it can happen that legally we could still launch a lawsuit to reclaim the gift, but we delayed this claim for so long that the court may say: because it was not reclaimed for such a long time, it can be considered that the donor waived their right to reclaim it. The reasoning behind this is to prevent keeping the gifted party in an uncertain situation; for example, in the case of a real estate gift, they should not have to fret for 5 years over whether it will be reclaimed and whether they might lose their home. In such a case, if, for example, the donor files the lawsuit within the 5-year limitation period, on the 4th year and 350th day (even though they could have done so much earlier), the court may say that they did not reclaim it for a long period, so despite their claim not being time-barred, the passage of this long time must be viewed as waiving the right to reclaim.
Further forfeiture conditions apply, meaning the gift cannot be reclaimed if:
- In the case of a serious violation, the gift or the value that replaced it is no longer present at the time of the violation.
- In the case of a violation, if the donor has forgiven the violation (the failure to enforce the claim over a longer period, as detailed above, also qualifies as forgiveness).
- A gift of standard value cannot be reclaimed (what constitutes standard value is assessed by the court; a gift worth a few tens of thousands of forints, for example, qualifies as standard value).
Reclaiming a Gift Without a Contract - Provabillity and Chances
In lawsuits for reclaiming a gift, winning the case often hinges on the evidence, because in theory, the possibility of reclaiming the gift almost always holds up, but we cannot prove it, or can only do so with difficulty. This is particularly true for the third scenario, i.e., when we reclaim the gift due to the permanent failure of an assumption. In such a case, we must prove that the gifted party knew and was aware of the assumption, and was also aware that they received the gift solely because of this assumption. This places the gifted party in a position where they know they must fulfill the assumption, since they received the gift because of it. However, this is often difficult to prove. The best solution is to state in the contract what assumption the gift is being handed over with. In the absence of a contract, we are forced to prove with other evidence—such as witnesses or screenshots of chat conversations—that they knew or should have known about the assumption.
Reclaiming a Gift From an Heir and Legal Cases
As a general rule, a gift given to someone can only be reclaimed from an heir under exceptional circumstances. However, court practice has stated in legal cases and in a college opinion that a gift can also be reclaimed from an heir if, upon reviewing the given case, social perception justifies it. Court practice illustrates this with the following example:
"Elderly persons give a high-value gift to a relative who is significantly younger than them, with the recognizable assumption that the gifted party will care for them if necessary and support them in their frail state. The death of the gifted party preceding that of the donor frustrates this assumption of the donor—without which the gifting would not have taken place at all. In such an exceptional case, the gift can also be reclaimed from the heir of the gifted party, because the donor's assumption that the gifted party would outlive them and thus be capable of caring for and supporting them has failed."
The heir of the donor may also exceptionally reclaim the gift, primarily in cases where the gifting took place with regard to the heir, or to them as well.
