I NEED NEW JERSEY STATUTE AND/OR CASE LAW SPECIFIC TO THE PAYMENT OF
REAL ESTATE TAXES AS A LIFE TENANT. I HAVE SEEN OFTEN THAT THE TENANT
IS USUALLY RESPONSIBLE FOR THE TAXES, BUT I NEED THE CASE LAW AND/OR
STATUES OR STATUTES IN NEW JERSEY...THANKS A LOT

---

Request for Question Clarification by umiat-ga on 09 Jun 2003 20:31 PDT

Hello, strato-ga!

 I have searched the Taxation portion of the New Jersey statutes
extensively at
"New Jersey Law Network."
http://njlawnet.com/njstatutes.html


I could find no information delineating responsibility for property
taxes between a tenant for life versus a "non-occupant owner" of the
property. The tenant for life is not considered a renter, under the
tax law, since they are not paying "rent" for the property.


What I did find is "how" a tenant for life is viewed in terms of
eligibility for the NJ Saver and Homestead property tax reimbursement.
Both provisions of the statute imply that the tenant for life is
considered to be the "owner" of the property. By deductive reasoning,
the tenant for life is then also responsible for the real estate
taxes!

 
54:4-8.58  Definitions relative to NJ SAVER and homestead rebates.
==================================================================

(4)for purposes of this definition as provided in this subsection, in
addition to the generally accepted meaning of owned or ownership, ** a
homestead shall be deemed to be owned by a person if that person is a
tenant for life **  or a tenant under a lease for 99 years or more and
is entitled to and actually takes possession of the homestead under an
executory contract for the sale thereof or under an agreement with a
lending institution which holds title as security for a loan, or is a
resident of a continuing care retirement community pursuant to a
contract for continuing care for the life of that person which
requires the resident to bear a share of the property taxes that are
assessed upon the continuing care retirement community, if a share is
attributable to the unit that the resident occupies;


54:4-8.67.  Definitions relative to homestead property tax
reimbursement
=========================================================================
In addition to the generally accepted meaning of "owned" or
"ownership," **a homestead shall be deemed to be owned by a person if
that person is a tenant for life **  or a tenant under a lease for 99
years or more, is entitled to and actually takes possession of the
homestead under an executory contract for the sale thereof or under an
agreement with a lending institution which holds title as security for
a loan, or is a resident of a continuing care retirement community
pursuant to a contract for continuing care for the life of that person
which requires the resident to bear, separately from any other
charges, the proportionate share of property taxes attributable to the
unit that the resident occupies;


=========


What I am not sure about is whether you are describing a situation
where the property has been put in trust, yet the "tenant for life"
(usually the original owner) has been allowed the right to occupy the
property until death.

If this is the case, then the decision as to who would pay the
property taxes would be part of the trust agreement. Even if the
property title had not been transferred and was still in the "tenant
for life's" name, it is possible that the terms of the trust agreement
could delineate that someone else pay the property taxes.

However, in terms of the State of New Jersey's position, the owner of
the property must pay the real estate taxes. It is clear from the two
subsections of the code cited above, that the tenant for life is
considered to be the owner (no matter what personal agreement may be
contained in a trust)

====

Are you looking for something in addition to this information? If so,
could you please clarify? Have you heard of an actual statute code
directly relating to a tenant for life and real estate taxes other
than what I have cited?

If the situation you are describing concerning the tenant for life
actually involves a trust agreement of some sort, that is another
matter that involves an investigation into the actual contract. Please
let me know how I can proceed. Perhaps I can pinpoint something
further.

umiat-ga

---

Clarification of Question by strato-ga on 11 Jun 2003 09:45 PDT

Hello Umiat-ga,The life tenant in question, has a life estate by a
deed only without a trust ;a perfectly legal and viable estate planing
tool.I have read numerous definitions of this type of deed and always
it is described as the life tenant's dutie to pay the taxes sans a
trust agreement or any language in the deed itself. I wanted to see if
there were statutes in N.J. specific to deeds that deliniate the
duties of both parties.Also an attorney indicated the there might be
case law as well. The info you have obtained thus far is helpful but
might not be complete.I thank you lots thus far.strato-ga

---

Request for Question Clarification by pafalafa-ga on 12 Jun 2003 15:46 PDT

I'll add a bit more to Umiat's good work thus far.  Searching the
records of the NJ State Tax Courts, I found only two cases that made
mention of "life tenants":

-------------------

 While governmental restrictions may have an effect upon value, Schwam
v. Cedar Grove Tp. 9 N.J. Tax 406 (Tax 1987), aff'd o.b. per curiam
228 N.J. Super. 522 (App. Div. 1988), certif. den. 115 N.J. 76 (1988),
private, contractually imposed restrictions do not. Glenwood Realty
Co., Inc. v. East Orange 78 N.J. Super. 67 (App. Div. 1963) (mortgage
on property must be ignored). As Judge Lario stated in Lidell v.
Mimosa Lakes Ass'n. 6 N.J. Tax 417 (Tax 1984): "...landlord and tenant
interests, life tenant and remainder interests, co-tenant interests,
mortgagor and mortgagee interests, and grantor and grantee interests
(where less than a full fee is conveyed) are not separately assessed,
instead the full value of the fee is assessed as though there were no
separate interests." (citations omitted) [6 N.J. Tax at 425].

------------------------

  "The land could be claimed and awarded only at the Manorial Court,
being held 'by copy of the Court Roll,' which meant that the life
tenant's name was inscribed there on permanent record. This system
provided a direct incentive to men to keep the same surname that had
been put down on the roll for their father or grandfather. And even
younger sons--having in mind the uncertainty of life--might think it
just as well to use the name too, even if it was Whalebelly or
Chickenhead."

----------------------------------

Neither case seems to bear directly on your question...I'm not sure if
there are other cases that would be more relevant.  I did not see any.

---

Clarification of Question by strato-ga on 13 Jun 2003 13:15 PDT

There is a possibility that there is no statute re a life tenant's
duty to pay the taxes in question. There might be opinions or
judgements by n.j. courts that clarify the dispute between life tenant
and remaindermen.This is common law or case law I think...Could there
be anything out there that resolves these issues?I will hope for the
best for a while and then shut up I reckon.......

---

Request for Question Clarification by umiat-ga on 13 Jun 2003 21:34 PDT

I believe I have found an answer to your question based on the New
Jersey Real Estate Exam Prep homepage:
http://www.njretest.com/study_notes/freehold_estates.htm

 "A "life estate" is ownership of real property for the duration of
someone's life. In other words the owner of the life estate, referred
to as the life tenant enjoys all of the rights of ownership for as
long as they live. All of the rights normally associated with the
bundle of rights are included except for the right to will the
property. Upon the death of the life tenant their rights in the
property are immediately terminated. Therefore, the property may not
be left to anyone in a will. The exception to this is when the life
estate is not based on the life of the life tenant, but rather it is
based on the life of a third party. This is referred to as a life
estate pur autre vie which means "for another's life". In other words
the life tenants rights in the property will continue for as long as
the third party is alive. This means that a life estate pur autre vie
can be willed and the devisee's rights will continue until the death
of the third party.


"A life tenant has an obligation not to create waste. In other words
he may not do anything that would materially destroy the property. He
must, keep the property and reasonably good repair,

*** pay taxes and other assessments, etc.***

========

Does this come close enough to ease your mind, coupled with the clear
indication from the tax statute that states ** a homestead shall be
deemed to be owned by a person if that person is a tenant for life? **

There seems to be a basic understanding implied by the information
provided already that a life tenant owes the taxes unless another
provision is made in a contract.

What do you think?

umiat

---

Clarification of Question by strato-ga on 14 Jun 2003 06:31 PDT

Umiat, I think this latest entry answers my question.As this is my
first outing with Google Answers I will leave it up to protocall as to
payment..Thanks a great deal for your work and nice communications,,,
Gratefully,strato

Hello, strato-ga,


 I am thankful I was able to find an answer which you felt adequately
answered your question. According to GA policy, I will now go ahead
and put the final answer in the box so that the question can close!


=


According to the Taxation portion of the New Jersey statutes found at
"New Jersey Law Network." 
http://njlawnet.com/njstatutes.html: 
 
  
 A tenant for life is considered to be the "owner" of the property as
implied in the eligibility requirements for the NJ Saver and Homestead
property tax reimbursement. By deductive reasoning, the tenant for
life is then also responsible for the real estate taxes, unless other
arrangements have been made via contract, which is not the case in the
situation you have described.


54:4-8.58  Definitions relative to NJ SAVER and homestead rebates. 
================================================================== 
 
(4)for purposes of this definition as provided in this subsection, in
addition to the generally accepted meaning of owned or ownership, ** a
homestead shall be deemed to be owned by a person if that person is a
tenant for life **  or a tenant under a lease for 99 years or more and
is entitled to and actually takes possession of the homestead under an
executory contract for the sale thereof or under an agreement with a
lending institution which holds title as security for a loan, or is a
resident of a continuing care retirement community pursuant to a
contract for continuing care for the life of that person which
requires the resident to bear a share of the property taxes that are
assessed upon the continuing care retirement community, if a share is
attributable to the unit that the resident occupies;
 
 
54:4-8.67.  Definitions relative to homestead property tax
reimbursement
=========================================================================

In addition to the generally accepted meaning of "owned" or
"ownership," **a homestead shall be deemed to be owned by a person if
that person is a tenant for life **  or a tenant under a lease for 99
years or more, is entitled to and actually takes possession of the
homestead under an executory contract for the sale thereof or under an
agreement with a lending institution which holds title as security for
a loan, or is a resident of a continuing care retirement community
pursuant to a contract for continuing care for the life of that person
which requires the resident to bear, separately from any other
charges, the proportionate share of property taxes attributable to the
unit that the resident occupies;


===


 The New Jersey Real Estate Exam Prep homepage also makes it clear
that a life tenant is responsible for payment of real estate taxes and
other assessments.
http://www.njretest.com/study_notes/freehold_estates.htm 
 

 "A "life estate" is ownership of real property for the duration of
someone's life. In other words the owner of the life estate, referred
to as the life tenant enjoys all of the rights of ownership for as
long as they live. All of the rights normally associated with the
bundle of rights are included except for the right to will the
property. Upon the death of the life tenant their rights in the
property are immediately terminated. Therefore, the property may not
be left to anyone in a will. The exception to this is when the life
estate is not based on the life of the life tenant, but rather it is
based on the life of a third party. This is referred to as a life
estate pur autre vie which means "for another's life". In other words
the life tenants rights in the property will continue for as long as
the third party is alive. This means that a life estate pur autre vie
can be willed and the devisee's rights will continue until the death
of the third party.
 
 
"A life tenant has an obligation not to create waste. In other words
he may not do anything that would materially destroy the property. He
must, keep the property and reasonably good repair,
 
*** pay taxes and other assessments, etc.*** 
 
==
  
 The basic understanding, therefore, is that a life tenant owes the
real estate taxes unless another provision is made in a contract.

==

 
 Thanks for sticking with us on this one, strato! I hope we will see
you on GA again!


umiat-ga

Google Search Strategy
New Jersey statutes +taxes
New Jersey AND life tenant
New Jersey life tenant obligations
New Jersey AND life tenant +remaindermen

I appreciated umiat's help with my question.The final answer was very
helpful to me and appreciate the google service as well. A great idea
for the modern man!!!!!!!!

Nice work there, Umiat.  I was looking around for an answer for this
one, but just couldn't zero in on it.