MP warns of risks in transferring property to friends

The transfer and re-registration of property (cars, apartments, various assets) to other persons, even if it is done in a friendly manner or within the framework of family relations, is always associated with risks. The chairman of the State Duma Committee on Property, Land and Property Relations Sergei Gavrilov told Izvestia on December 10 in detail.

"When you formalize property for another person, you lose control over it in the legal sense. Regardless of your verbal agreements, another person becomes the official owner, and this gives him the full right to dispose of it as he sees fit. Even if you continue to use the property (drive the car, live in the house), legally it no longer belongs to you. If there are disagreements, it will be extremely difficult to prove the sham of the transaction," he warned.

According to him, one of the most common problems is the refusal to transfer the property back. Formally, you no longer have rights to it, and even the original bona fide intentions of the other party may change. For example, the property may be sold, used as collateral, or simply held against verbal agreements. Regaining ownership will require lengthy litigation, which does not always end in your favor.

In addition, as the deputy warned, registration of the property on another person may attract the attention of tax authorities or bailiffs. If the nominal owner has debts, the property can be seized to repay them. Even if it actually belongs to you, legally it will not help.

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"Situations related to fictitious or sham transactions are often found in court practice. For example, spouses may try to hide the property from division at divorce, formalizing it on relatives or friends. Or the property is transferred to create the appearance of having the assets necessary to obtain a loan. However, once disputes arise between the parties, it becomes extremely difficult to prove the fictitiousness of such a transfer, as it requires convincing evidence, which is difficult to provide," Gavrilov explained.

He warned that it is important to remember that any "friendly arrangements" must have legal formalization.Even if you trust the person completely, it is worth fixing the terms in writing, having them notarized. This could include a contract of sale with a buy-back clause, a receipt of an obligation to return the property, or other mechanisms that will protect you in the event of a conflict.

"The general rule of thumb is never transfer control of your assets unless you are prepared for the fact that it will be virtually impossible to get them back. A careful attitude to your assets and prudence in any transactions will help you avoid problems and save both property and relationships with loved ones," the deputy concluded.

In October, Gavrilov told Izvestia that an oral agreement to rent an apartment is recognized as valid, but carries certain risks. According to him, often in the absence of a document, tenants stop paying for accommodation, actually continuing to stay there. In addition, if the apartment is rented by word of mouth, in the absence of a written contract, there may be problems with the return of the deposit upon departure.