Viewpoint | An analysis of the nature of parental contributions when assisting children to buy a house
Published:
2023-10-23
In the current background of high housing prices, some children do not have the financial conditions to buy a house, often their parents will give financial assistance when they buy a house. The purpose of most parents' financial assistance is to solve their children's difficulties in buying a house so that they can live a happy life and do not expect them to repay it in the future. Therefore, parents usually do not agree on whether the financial assistance is a gift or a loan when they support their children to buy a house. If the children are happily married and live in harmony, the parents generally do not claim the right to contribute. However, in the event of a child's marital change, etc., there will be cases where the parents request the return of the capital contribution. At this time, based on the reality, parents rarely have the habit of writing IOUs when contributing, it is difficult to prove that the contribution is private lending. Once the litigation is involved, most of the main evidence of both parties is the statement of the parties, and it is often difficult to judge the nature of the contribution in trial practice, resulting in different views.
1. trial perspective
Combined with the provisions of the law and judicial interpretation, the court found that the basic principle of the nature of capital contribution is: respect for the autonomy of both parties. The identification of parental contributions should be based on the explicit representation of the parents. If the agreement between parents and children is a gift or if the parents express it as a gift, it is a gift relationship. There is a difference between the timing of the presentation of the true consciousness of the gift and the loan: the true meaning of the parent's contribution to the gift should generally occur at the time of the contribution or after the contribution. The lending relationship is generally before the contribution. This is to prevent parents from demanding the return of capital contributions on the grounds of so-called loan relationships in violation of the principle of good faith when the child's marriage changes or the relationship between parents and children deteriorates.
2. point of view analysis
(I) there is a debit note and transfer voucher will be recognized as a lending relationship, and strictly follow the "who advocates who gives evidence" principle.
1. In real life, some parents will ask their children or their children and spouses to write IOUs, which clearly state the time and amount of the loan, and have a transfer voucher.
(1) In the trial practice, the establishment of a loan relationship shall meet the conditions such as the agreement between the parties to borrow and the payment has actually been paid. The debit note and the transfer voucher can prove the existence of the loan legal relationship claimed by the parents.
(2) The parents as the plaintiff claimed the loan relationship, and the children as the defendant claimed the gift relationship. If the parents can provide the debit note as evidence that the loan relationship is established, the court shall determine the establishment of the loan relationship after examining the authenticity of the debit note.
2. Some parents, based on the close personal relationship between their children, often do not have an IOU but only an oral loan agreement for things that they think are shameful to write an IOU. In this case, if the prosecution is directly based on the transfer voucher and witness testimony, it is also possible to be identified.
(1) There is a transfer voucher, but the debit note is made up later.
There is evidence of bank transfer vouchers, but the IOUs are supplemented later. Can it prove the existence of a loan relationship? The court will generally determine that the "supplemented" IOUs are not sufficient to establish a loan relationship.
(2) Whether there is a transfer voucher combined with witness testimony can be recognized as a loan relationship.
Some courts held that it is also common for children to borrow money from their parents without issuing IOUs in real life, taking into account the traditional customs of Chinese society, the parents' contribution did not require the issuance of IOUs in line with the situation and reason at the time, and the parents' contribution was determined to be temporary fund lending based on the transfer voucher combined with witness testimony and other evidence.
(II) the parents claim the loan without a loan, and the child claims the gift, the child should prove the existence of the gift.
1. The (I) of Judicial Interpretation of the Marriage and Family Code of the Civil Code is not a presumption of the nature of the contribution as a gift, but a presumption of the object of the gift under the premise of the gift.
Article 29 of the (I) of Judicial Interpretation of the Marriage and Family Code of the Civil Code is not a presumption when the nature of the capital contribution is not clear, but a presumption of the object of the gift on the premise that the nature of the capital contribution has been clearly defined as a "gift", that is, in principle, it is regarded as a gift to both husband and wife, and if it is clearly stated that the gift to one's children is only a gift to one's children. From this article, it cannot be directly deduced that the nature of the contribution is the conclusion of the gift.
2. From the burden of proof, the child needs to prove the establishment of the gift relationship.
Article 16 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases stipulates: "If the plaintiff files a private lending lawsuit only on the basis of the transfer voucher of a financial institution, and the defendant defends that the transfer is to repay the previous loan or other debts of both parties, the defendant shall provide evidence to prove its claim. After the defendant provides corresponding evidence to prove its claim, the plaintiff shall still bear the burden of proof of proof of the establishment of the loan relationship."
Usually, if the parents are unable to provide a debit note, but may provide a transfer voucher, the burden of proof shall be transferred to the child, I .e. the child shall prove the establishment of the gift relationship, otherwise he shall bear the adverse consequences of the proof.
3. Risk Alert
The above two views reflect two different value orientations. Identified as a loan, focusing on the protection of parents' property rights and interests, means that part of the debt is a joint debt of the husband and wife, even if divorced, should be repaid as a joint debt. If it is recognized as a gift, it focuses on protecting the property rights and interests of the children and husband, and the parents' contribution will be recognized as the joint property of the husband and wife and divided. Combined with the above analysis, the author puts forward two risk tips on the nature of parents' contribution, according to the legal provisions and the views in judicial practice:
(I), in view of the fact that after the promulgation and implementation of the Civil Code, if parents cannot prove that the contribution is a loan, in the absence of an agreement, it is presumed to be a gift, so, in order to avoid the risk of divorce of their children, parents must let their children write a loan when they pay for the purchase of a house for their children.
After the presumption is a gift, the parents need to prove the establishment of the loan relationship, which is evidence, and if the presumption is a loan, the child is required to prove that it is not a loan, but a gift, which is not evidence. The difficulty of not having a certificate is much greater than having a certificate, which can easily lead to an unfavorable situation for the child's side when giving evidence.
(II), even if the capital contribution is donated to their children, it is best to sign a gift agreement to clarify whether the object of the gift is their own children or both husband and wife.
Legal basis
1. Article 1062 of the the People's Republic of China Civil Code:The following property acquired by the husband and wife during the marriage shall be the joint property of the husband and wife and shall be jointly owned by the husband and wife:
(I) wages, bonuses and remuneration for labor services;
Income from (II) production, operation and investment;
Proceeds from the (III) of intellectual property rights;
Property inherited or donated by the (IV), except as provided in Item 3 of Article 1063 of this Law;
(V) other property which shall be owned jointly.
Husband and wife have equal rights to dispose of common property.
2. Article 29, paragraph 2, of the (I) of Judicial Interpretation of the Marriage and Family Code of the Civil Code:"After the parties get married, if the parents contribute to the purchase of houses for both parties, they shall be dealt with in accordance with the agreement; if there is no agreement or the agreement is not clear, it shall be dealt with in accordance with the principles stipulated in the fourth paragraph of Article 1062 of the Civil Code."
3. Article 16 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases stipulates:"If the plaintiff files a private lending lawsuit solely on the basis of a financial institution's transfer voucher, and the defendant defends that the transfer is a repayment of a previous loan or other debt between the parties, the defendant shall provide evidence to support its claim. After the defendant provides corresponding evidence to support its claim, the plaintiff shall still bear the burden of proof of the establishment of the lending relationship."
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