Volume 10 - Opinions of Counsel SBRPS No. 102
Assessment roll (designation of owner) (life estate-exclusive use requirement) - Real Property Tax Law, § 502:
Where a deed reserves a “non-exclusive” right to use property for the life of the grantor, a life estate has not been retained, and the property should be assessed in the name of its legal owner: the grantee.
We have been asked to provide advice concerning the ownership of a particular parcel. We were provided with a warranty deed from a mother to her son and daughter-in-law. The deed “except[s] and reserve[s] therefrom the non-exclusive use of said premises during the life of the [mother].” The question is whether this language reserves a life estate to the mother. We think not.
Property is to be assessed in the name of its owner, last known owner or reputed owner (Real Property Tax Law, §502(2)). As we have stated in many of our opinions, the owner of a legal life estate is deemed to be the owner for purposes of real property taxation including exemption administration (e.g., 3 Op.Counsel SBEA No. 45; 9 id. No. 41). A person who merely has a right of occupancy, however, is not the owner for such purposes (5 Op.Counsel SBEA No. 12). In the cited Volume 10 opinion, we noted that the “grant of ‘exclusive life use’ of premises creates a life estate in the premises, as opposed to a right of occupancy, if the instrument creating the interest contains no evidence of intent to the contrary” (emphasis added). In 10 Op.Counsel SBRPS No. 58, we stated, “Put succinctly, while a denominated life estate may include conditions, if those conditions are so numerous, onerous and fundamentally incompatible with the rights of a life tenant, in our opinion, there is no life tenancy, only a right of occupancy.”
Here, in our opinion, the mother’s “non-exclusive” rights are incompatible with a legal life estate. It has been said, “The phrase ‘life estate’ has a well-established meaning. It is an estate in land giving the life tenant full and exclusive possession of the property for the duration of the life tenant’s life” (United State v. Baran, 996 F.2d 25, 28 (2d Cir. 1993)). More recently, another court said, “The real substance of a life estate consists in the life tenant’s right to exclude all others from the possession of the subject property for the duration of his or her own life [citations omitted]” (Estate of Carey, 249 A.D.2d 542, 544, 672 N.Y.S.2d 131, 133 (2d Dept. 1998)). “During his life the life tenant is the exclusive owner of the land so held by him, with the exclusive right to its possession, control and enjoyment” (Walsh, The Law of Property, §95). Exclusivity has been mentioned as an attribute of life estates in other authorities as well (e.g., Fiske v. Fiske, 95 A.D.2d 929, 464 N.Y.S.2d 282 (3d Dept. 1983); In re McCarty’s Estate, 158 Misc. 287, 285 N.Y.S. 641 (Surr.Ct., Orange Co., 1936); Thorn v. Stephens, 169 Misc.2d 832, 646 N.Y.S.2d 597 (Sup.Ct., Westchester Co., 1995); Rasch, New York Law and Practice of Real Property, §6:13; Warren’s Weed New York Real Property, Life Estates, §1.01; 56 NY Jur2d, Estates, Powers, etc., §37).
If the grantor (in this case, the mother) has retained something less than a life estate (i.e., right of occupancy), then the grantees (her son and daughter-in-law) must be deemed to own the property. Any exemption eligibility, such as for the school tax relief [STAR] exemption (RPTL, §425), would be determined on the basis of their ownership.
April 13, 2000