Receiving joint property ownership while your parent or a loved one is still alive sounds quite lucrative and beneficial. However, there are multiple cons associated with the same. If you have received joint ownership of a property in the form of a life estate, then you need to know what to do if your life tenant is not maintaining the property.
While having joint ownership of property may sound like a straightforward thing, there are lots of minute details involved that could make managing the property quite challenging.
Guardian Property Management is here to tell you all about a life estate, your rights over a life tenant, and what your rights are as a joint owner of a life estate.
A life estate refers to a type of joint property ownership that is legally recognized. An individual, referred to as a
life tenant, owns and uses the property during their lifetime.
The life tenant shares the ownership rights with another person, also called the remainderman. The property's title is automatically transferred to the remainderman once the life tenant has passed away. A life estate is a convenient process used to streamline the inheritance process.
Sounds complicated? Let's get into more detail.
A life estate is essentially formed to create combined ownership of a property. The ownership rights are mutually shared between the life tenant and the remainderman. The remainderman cannot, under any condition, take possession of the property while the life tenant is alive.
The life tenant continues to have complete ownership of the property regarding living costs, maintenance costs, and tax purposes. The life tenant can stay in the life estate as long as they are alive.
As we briefly mentioned before,
the life tenant still holds full responsibility for making all the tax and insurance payments and maintaining the property in its original condition.
Before we land on the question of what to do if your life tenant is not maintaining the property, it is crucial to know the rights you possess as a remainderman.
Estate planning is a complex process, especially when discussing life estates and tenants. As a joint owner of the estate and complete future owner, a remainderman has no real responsibilities towards the life tenant. He is only required to protect his interests and rights to the property.
The rights granted to a remainderman by law include:
The remainderman has the right to ensure that the life tenant maintains the property.
A life estate arrangement is relatively popular with aging parents who create a joint ownership life estate agreement with their children and continue living in the same property for the remainder of their lives.
Before entering a life estate agreement, the remainderman must be aware of the responsibilities a life tenant should fulfill.
As a life tenant, a person has the right to rent out any or part of the property and be the wholesale receiver of the rent from the tenancy. However, the life tenant must also ensure that the property value remains intact despite the rentals.
Any taxes that must be paid on the rental income fall under the responsibility of the life tenant. The same applies to a hike in home insurance prices.
The life tenant has legal responsibility for maintaining the property. This includes all bill payments, insurance payments, utility payments, upkeep costs, gardening, and landscaping.
All taxes associated with the property and any home insurance payments that must be made to protect the property from damage must be paid by the life tenant.
A life tenant's primary responsibility towards the remainderman is to prevent the deterioration of the property while the life tenant lives there. Any misuse, damage, neglect, or alterations to the property that could potentially deteriorate its value is considered a violation of the life tenant's responsibilities.
When it comes to what to do if your life tenant is not maintaining the property, several laws and legal procedures can protect you from such a situation.
The remainderman is provided rights in such a situation by law. If the life tenant fails to keep the property in good shape or does any damage to the property unless authorized by a will, the life tenant is liable for all the payments required to put the property back to its original state.
The court of law also possesses the power to stop the life tenant from doing any further activities that could cause damage to the property or decrease its value. The court holds the life tenant legally responsible for maintenance and repairs. The life tenant will subsequently have to prevent the property from further deterioration.
In short, if you are struggling with what to do if your life tenant is not maintaining the property, you can file a petition with the court of law to evict the life tenant and sell the estate.
Creating a life estate is a simple way to ensure that your property gets inherited by the person of your choice without any complicated legalities. However, it is important to have a full understanding of what a life estate exactly entails, as this arrangement cannot be undone easily. Make sure you are aware of your right and responsibilities before entering into any such arrangement to avoid future problems.
