Neglect or Abandonment Of Premises By A Life Tenant

[MrKeith]

Thank you for any help. This forum has already educated me more than I could have ever hoped.

This may be lengthy.
This situation concerns a house in Ovid, New York, my wife, Stella (Gerogia), her sister, Niki (Texas), their father Stanley (deceased), and his wife (Stella and Niki's step mother), Priscilla (Ovid, New York with said property).

Stanley built a house in Ovid, NY. in 1985. At this time he was married to Priscilla, but built the house and placed in Stella and Niki's names from the beginning. On his death bed, in 1995, he issued life use to Priscilla, with Stella and Niki as the remaindermen (I hope this is the correct terminology). The life use agreement explicitly states conditions of life use, and conditions of waste. In short it states Priscilla must pay all taxes, fire insurance, and maintenance and upkeep on the property. The property was assessed at $81K in 1995.

In 2003 Priscilla sent Stella and Niki a letter through her lawyer stating they had to pay eight years of back taxes. We read through the agreement, responded accordingly, and never heard from her on the matter again. We did start researching the house shortly thereafter (until then neither Stella, nor Niki, ever bothered Priscilla or the property). We discovered all taxes had been paid up to date, and fire insurance was current with Stella and Niki as the owners and Priscilla as the life use tenant. We also took a trip up to NY and viewed the property in person around this time. The property appeared to be kept up very well at this time.

In 2005, while doing some research to insure taxes were being paid, we discovered Priscilla had fire insurance canceled and placed on her Florida property. This was through phone calls to Seneca County. So the house now sits with no fire insurance, and she does not reside in the residence. Having no fire insurance specifically breaks a portion of the agreement that explicitly is stated as cause for waste. We had not realized it at that time.

Yesterday, 8/15/2007, the owner of the property immediately adjacent to the house called Stella on the phone. He offered to buy the house from Stella and Niki for $40K cash, and that he had spoken with Priscilla and had agreement from her to attempt to make this deal, and that he would handle all the paper work involved. He also stated the reason he was offering such a low price was that the house was not in very good shape. He stated that Priscilla had not been living in the house for some time, had the power turned off, water pipes had burst over the winter causing damage, the roof was in rough shape, and was in all around poor condition.

Now that the stories are over, how about a few questions?

1) Would Stella and Niki have possible grounds to revoke her life use?
2) Would this be an expensive and involved process?
3) Can Stella and Niki possibly sell this property to this neighbor and be protected from any loopholes?
4) Can Stella and Niki handle all of this without having to travel to Ovid, NY?
5) Should Stella and Niki take out their own fire insurance policy immediately?
6) What type of attorney should we seek, etc...
7) Anything else we should know and haven't thought of?

Stella and Niki definitely want to sell the house. If they could remove Priscilla from life use and sell the house free and clear, that would be optimal. There are a lot of personal bad feeling between Stella & Niki, and Priscilla and how Priscilla manipulated and coerced their father at the end of his life.

I thank you for any advice. This issue has been over us for many years. It finally looks like there may be a light at the end of the tunnel on this matter.

Thanks,
Keith

[lwpat]

placed in Stella and Niki's names from the beginning. ... On his death bed, in 1995, he issued life use to Priscilla

If this is the case, there is no life estate. You cannot give a life estate if you do not own the property.

[MrKeith]

Ok, let me clearify.
He owned the property and built the house. Immediately after the house was complete he sold it to Stella and Niki for $1.00 with him as having life use. On, or very close to, his death bed Priscilla had him draw up the paper work to give life use to Priscilla and asked Stella and Niki to sign them. They signed them being as it was their father's wish.

So it remains, Stella and Niki own the house (or are remaindermen or whatever) with Priscilla having life use, etc, etc, etc...

Sorry for the confusion.

[MrKeith]

No advice?
Surely someone knows something on this kind of matter and can advise?

[aaron]

If a life tenant is neglecting her duties or has abandoned the property, the remaindermen can bring a legal action to eject her and possibly to recover damages.

[gpering]

Insurance is not the life tenants responsibility. If she were to purchase fire insurance and the house were to burn down. The life tenent would collect the insurance.

She is reponsible for upkeep and taxes as if she were the owner. Your could sue for waste.

Where a court finds that a tenant is engaging in waste, there are a number of possible remedies which can be taken:

1. The court may award money damages in an amount sufficient to compensate the injured party for the loss resulting from the waste.

2. The court may directly require the party responsible for the waste to restore the property to its original condition.

3. The court may accelerate the passage of title in the land, divesting a tenant or life estate holder of the property and vesting it in the landlord or remainderman.simone

A lawyer is very expensive, you should balance what a lawyer costs and what you have to gain. Figure $200/hr for a lawyer who knows nothing and $400/hr who won't admit he knows nothing.

[gpering]

Continuing:

You can not sell the property. The life tenant has possessory rights. You could offer to purchase the life tenant's interest in those rights. But what is the value of those rights? She has the rights to the income the property would earn. (Rent or lease). She doesn't have an interest in the value of the home.

How old is he life tenant? There are tables for figuring this out. If she is 78 yr old. She would live, theoretically, another 10 years. If the property could earn $400/mo thats $4800/yr if taxes are $1000/yr. She could earn $3800/yr on the property.

Over the next 10 years that would make her interest $38,000.

Try offering her something like $15,000 for her selling her life estate interest.

[gpering]

Continuing:

Your issues are with Probate Law and Real Estate Law. You will need lawyer(s) that are proficient in these areas. (see cost estimate above)

You can check up using the Internet if the taxes are being paid. How is her financial situation? If she is paying the taxes with no income from the property, then she has a little alligator on her hands. If she comes from 'means' then this might not be a big deal. Since she asked you to pay the taxes she already paid, she might bite at a settlement.

Make sure you deduct from the offer of her life estate interest, the cost to get the property back up to the way your father left it.

Try to do this without involvement of a laywer.

[MrKeith]

I know this is old, but as many of you know these cases can roll on for a long time.

Here's an update:

Out of the blue, a neighbor of the property, Ray, contacted us with an offer to buy the property for 40K. He said that Priscilla had offered to give up her life use if we would make the sale. He told us the house was in quite a state of disarray, and that Priscilla had not been living in the house since she wintered in Florida two years ago and left the water on causing the pipes to burst. She essentially has abandoned the house.

This motivated us to get a full appraisal on the house, and to research taxes and fire insurance as per the life use agreement. Fire insurance was discontinued, as were paying taxes. We have since took up paying the fire insurance and taxes.

The results of the appraisal were not as bad as we anticipated. The house appeared a little weathered, but was not in the stated of peril as Ray lead us to believe. The property appraised for around $125K.

The kicker is that the title search done on the appraisal revealed two mortgage loans against the house, by Priscilla. These two liens are on the title books. Both loans were taken out five months apart, and total more than the value of the house. In these liens she explicitly states and signs that she is the rightful owner of the property free and clear.

At this point play time was over. We needed legal help, and have since moved towards retaining a real estate lawyer. We have also filed fraud charges in the county.

Our lawyer did a title search and told us that it was obvious and clear from this basic search that Priscilla was not the rightful owner and had "life use only" as explicitly stated in the title deed that transfered life use to her from Stella and Niki's father just before his death.

We also had a problem finding out who actually held the loans. The original company was no longer in business. But we did some research and found out who bought the loans. It took a few weeks of calling to this company to finally get someone to admit they did have the loans.

The county sheriff has begun their investigation, and has already contacted the loan holders. Of course the holders of the loan claim she had legal right to take out loans against the property as a life use tenant.

The lawyer has all the information and will move forward as soon as we mail him our $4K retainer.

One question for you legal brainiacs...
Did Priscilla, a "life use only" tenant, have the legal right to take mortgage loans out on this house? (Upstate New York)

[seniorjudge]

One question for you legal brainiacs...
Did Priscilla, a "life use only" tenant, have the legal right to take mortgage loans out on this house? (Upstate New York)

A: Yes.