In its decision published on 23 May 2024 (decision of 18 April 2024, V ZB 51/23), the Federal Court of Justice clarified that the acquisition of a co-ownership share in a non-rented or leased property by a minor is only legally advantageous. As a result, a representative appointed by the court (a so-called supplementary curator) does not have to be involved if a parent wishes to transfer a co-ownership share in a property belonging to them – neither rented nor leased – to their minor child.
The decision was based on a usual constellation in the context of anticipated succession:
A parent was the owner of a property and transferred this as a gift to the two minor children, each with half co-ownership. The children were represented by the parents, in whose favour the entry of a lifelong usufruct was granted at the same time.
The land registry made the registration of the transfer of ownership dependent on the approval of the conveyance by a supplementary curator yet to be appointed for each child – a complicating and expensive circumstance that parents usually want to avoid in practice.
After the Court of Appeal, as the lower court, had still taken the view that the land registry was right to demand the approval of the conveyance by a supplementary curator, the Federal Court of Justice has now rejected this view and thus provided legal clarity.
For a long time, the view now confirmed by the Federal Court of Justice was not questioned.
It is generally recognised that parents can represent their minor children vis-à-vis themselves (self-dealing) and that no supplementary curator is required if the legal transaction is merely legally advantageous for the minor. On the other hand, a supplementary curator must be appointed if the self-dealing transaction is legally disadvantageous for the minor. In this case, the parents are excluded from representing the minor in the context of a self-dealing transaction.
It is also generally recognised that the (gratuitous) acquisition of a rented or leased property is legally disadvantageous for the minor, as he or she enters into the rights and obligations of the rental or lease agreement upon acquiring ownership. The same applies to the acquisition of a condominium, as the minor enters into the community of condominium owners upon acquiring ownership, which is also associated with numerous obligations. In the case of a gift of residential property or a rented or leased property, the transfer agreement concluded by the parents in their own name and in the name of the minor must therefore be authorised by a supplementary curator.
However, if the property in question is not rented or leased, it has so far been assumed without differentiation that both the (gratuitous) acquisition of sole ownership and the acquisition of co-ownership are merely legally advantageous and therefore no supplementary curator needs to be appointed.
This view has recently been called into question by three higher court decisions: Both the Kammergericht (decision of 2 August 2023, 1 W 93/23 and decision of 20 September 2022, 1 W 280/22) and the OLG Munich (decision of 18 December 2023, 34 Wx 311/23) had taken the view that the (gratuitous) acquisition of co-ownership shares was legally disadvantageous. The courts argued with the obligations in the co-ownership community and drew a comparison with condominium law.
The Federal Court of Justice has now contradicted this. The burdens to be borne in the co-ownership community did not constitute a legal disadvantage when viewed from an evaluative perspective. This also applies to the costs of maintenance, administration and common use, which the minor has to bear as a co-owner, as an obligation does not already arise with the acquisition of the co-ownership share, but further requirements such as a resolution of the co-owners must be met. Such indirect consequences would have to be disregarded in the assessment. Finally, a differentiation between the acquisition of sole ownership (no supplementary curator) and co-ownership share (supplementary curator) is also not convincing.
The decision of the Federal Court of Justice – no supplementary curator required – is a welcome relief for practitioners.
As the Federal Court of Justice did not consider a supplementary curator to be necessary, it was able to leave open the question of whether one or two supplementary curators should have been appointed for the two minor children. However, the Federal Court of Justice also clarifies that, if necessary, in general only one supplementary curator should be appointed for siblings.
(27 May 2024)