Case Study | Parents Sue Daughter and Son-in-Law to Fight for This Right

Parents funded the purchase of a house registered under the names of their daughter and son-in-law, with an agreement that the parents shall have the right to reside in the property. To secure their right of residence, the parents requested registration of the right of habitation, which was refused by their daughter. How will the court rule?

In 2009, Mr. and Mrs. Li, both in their seventies, funded the purchase of a residential property in Yuexiu District, Guangzhou, which was registered under the names of their daughter and son-in-law.

Mr. and Mrs. Li signed a House Purchase Agreement with their daughter and son-in-law, stipulating that the property ownership of the house shall belong to the daughter and son-in-law, while the right of use shall remain with Mr. and Mrs. Li until the death of both parties. Since the purchase, the disputed property has been resided in and used exclusively by Mr. and Mrs. Li.

Following the promulgation of the Civil Code of the People’s Republic of China, to live peacefully in the property in question, Mr. and Mrs. Li requested their daughter to assist them in completing the right of habitation registration at the Guangzhou Real Estate Registration Center. The daughter agreed that her parents could continue residing in the property until their passing, but refused to go through the right of habitation registration procedures. Consequently, Mr. and Mrs. Li instituted legal proceedings against their daughter before the people’s court.

The Yuexiu District People’s Court of Guangzhou rendered the first-instance judgment, ordering the daughter and son-in-law to cooperate with Mr. and Mrs. Li in completing the right of habitation registration formalities with the real estate administrative authority of Guangzhou. The term of habitation shall commence from the effective date of registration and expire upon the death of both Mr. and Mrs. Li. The judgment has now taken legal effect.

Paragraph 3 of Article 1 of the Provisions of the Supreme People’s Court on the Application of the Temporal Effect of the Civil Code of the People’s Republic of China stipulates that where a legal fact occurring prior to the implementation of the Civil Code continues into the period after its implementation, civil disputes arising from such legal facts shall be governed by the provisions of the Civil Code, unless otherwise prescribed by laws or judicial interpretations.

The House Purchase Agreement signed between Mr. and Mrs. Li, their daughter and son-in-law is authentic and valid. There is no evidence proving the agreement has been rescinded or modified. As this civil dispute arises from the aforesaid agreement, the case shall be governed by the relevant provisions of the Civil Code.

In accordance with the Civil Code, the right of habitation is established upon registration. In this case, the House Purchase Agreement stipulated that the right to use the property located in Yuexiu District, Guangzhou, registered under the daughter and son-in-law, shall vest in Mr. and Mrs. Li until both pass away. The agreement did not stipulate paid use of the property, nor did the daughter and son-in-law adduce evidence proving that Mr. and Mrs. Li paid corresponding consideration during their occupancy.

The court held that the contents and actual performance of the House Purchase Agreement satisfy the substantial elements of a right of habitation contract. Mr. and Mrs. Li have sufficient legal grounds to request the daughter and son-in-law to cooperate in completing the right of habitation registration for the property in question.

By Dai Peng, Judge of Yuexiu District People’s Court of Guangzhou

In accordance with Paragraph 3 of Article 1 and Article 3 of the Provisions of the Supreme People’s Court on the Application of the Temporal Effect of the Civil Code of the People’s Republic of China, where a contract concluded before the implementation of the Civil Code contains clauses concerning the right of habitation and complies with the substantial elements of a right of habitation contract, the obligee may apply for right of habitation registration accordingly.

The right of habitation is a newly created usufructuary right under the Civil Code, which entitles the holder to possess and use another person’s residential house. It is established based on a right of habitation contract. Such a contract constitutes a civil legal relationship formed through negotiation by equal parties of their own free will. It shall be made in writing and contain essential elements including the names and domiciles of parties, location of the residence, habitation conditions and requirements, term of the right of habitation, and dispute resolution methods.

Upon legal registration, the right of habitation shall produce effect against the whole world. It is established on a gratuitous basis as a principle and on a compensatory basis as an exception, featuring long-term validity and opposability to third parties. Parties to an unregistered right of habitation contract may only claim the right to use the house based on creditor’s claim rights, subject to the privity of contract.

Completing registration to create the right of habitation constitutes the primary purpose of signing the right of habitation contract. In accordance with the principle of good faith and credit, the settlor owes the obligee the collateral contractual obligation to assist with registration formalities.

The establishment of the right of habitation plays a positive practical role in safeguarding housing for the elderly and the vulnerable, and reducing family ethical disputes. It also maximizes the free will of property owners and fully embodies the values of equality and justice in the core socialist values.

Article 366 A holder of the right of habitation may, in accordance with the contractual agreement, enjoy the usufructuary right to possess and use another person’s residential house to meet the needs of daily residence.

Article 367 To establish the right of habitation, parties shall conclude a written right of habitation contract. A right of habitation contract shall generally contain the following clauses:

Article 368 The right of habitation shall be established gratuitously, unless otherwise agreed by the parties. Where the right of habitation is created, the parties shall apply to the registration authority for registration. The right of habitation is established upon registration.

Paragraph 3, Article 1 Where a legal fact occurring prior to the implementation of the Civil Code continues into the period after its implementation, civil disputes arising from such legal facts shall be governed by the provisions of the Civil Code, unless otherwise prescribed by laws or judicial interpretations.

Article 3 For civil disputes arising from legal facts prior to the implementation of the Civil Code, if no provisions are stipulated in the laws and judicial interpretations at that time but the Civil Code contains relevant provisions, the provisions of the Civil Code may apply; provided that this shall not apply if the application would obviously impair the legitimate rights and interests of the parties, increase their statutory obligations, or depart from their reasonable expectations.