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Why is it Important to Finalize the Registration (Quickly) of Land Gift Transactions?

Writer: Meir Molad, Attorney.


Years ago, Reuven received an apartment from Shimon, a relative of his family. For over twenty years, Reuven rented out the apartment and enjoyed the benefits of it. Everything went smoothly. One day, however, Reuben discovers in his mailbox a letter from Shimon telling him that due to his difficult financial situation, Shimon is retracting the gift. Reuven laughs to himself and says, "now he remembers? The two sides appeal to the Court, and after lengthy legal proceedings, the Court rules that the property would return to Shimon.

This situation is not necessarily fictional, but what should Reuven have done to avoid the unpleasantness and long legal process?
The solution is quite simple: finalize the property registration in his name.

We will explain;

A gift is received, usually from a close relative, but the recipients do not bother to register it with the Land Registry Office. Why? Because it's in the family, they do not think that there really is a need, and it's not pleasant to ask, as the gift provider was a relative. So what? Shall we startsigning him now and run to the Land Registry? 

The answer is yes. It is in the best interests of the recipients to make an effort to finalize the transaction as quickly as possible.

Allow us to explain: Gift Law states that the way of imparting a gift is by transmission. However, this is not so, when there is another provision that is specific to the matter in question. Indeed, real estate properties are subject to special provisions. The law provides that a transaction requires registration and as long as it is not registered, it is regarded as a "commitment to make a transaction." We learn that if the gift recipient did not finalize the gift transaction, the gift provider and the gift recipient are under the status of a "commitment to record a transaction."

Returning to Gift Law: Section 5 of Gift Law deals with a commitment to give a gift. However, what is the law when a person gave a gift but hedecided to retract it?

The law allows the gift provider to retract his gift under certain circumstances. such as the disgraceful behavior of the gift recipient vis-a-vis the gift provider, or a change for the worse that has occurred in the gift provider's financial situation. This is so that even if a significant amount of time has passed since the gift was given and the gift recipient has not finalized the registration, it is sufficient that if the financial situation of the gift provider deteriorates that he can reclaim the apartment back. The law allows the gift provider to retract the gift, even without any special cause, as long as the situation of the gift recipient has not worsened due to the gift, and in addition, the gift provider did not waive his right to do so at the time of giving the gift.

In other words, if you received a gift and did not attend to finalizing the registration, you might quite easily find yourself without the gift, but with a lot of unpleasantness.

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*This article is not meant to constitute legal advice for a particular client, for which consultation with a qualified attorney is required.