Hello Reader, this time Tabir Hukum will discuss about live estates.
The fee simple and fee tail are both estates of inheritance; that is, they are capable of being tranferred. Thus, they have the potential to last forever, subject to whatever restrictions are validly imposed by the grantor by way of conditions. The least of the freeholds, the life estate, is not an estate of inheritance, as it ends with the grantee's death. It is nevertheless freehold because its termination date is indefinite - it is not given us to know the date of our death.
The life estate is created by grant when the grantor explicitly conveys an estate limited to the grantee's lifetime, and by defult when the grantor fails to use the magic words of limitation to create a fee simple. Thus, at common law, a grant "to A forever" would convey not a fee simple but a life estate, although some jurisdictions now have legislation stating that a grant, whatever the words of limitation, operates to vonvey all of the grantor's interest unless the grant shows a different intention. The grantor can best show the intention to create a life estate by saying simply "To A for life". But grantors sometimes use other words of limitation, such as "to reside there for the rest of her life". Because the grantor has not used a term of art, the grant invites arguments over its meaning. It might be a grant of a freehold estate or of a tenancy at will. Or the words might be more permission to live on the property. Remember the various interests in land, and use language that precisely identifies the interest you want to create.
Beside being created by express grant, life estates may arise by operation of law, as when a widower or widow claims the common law rights known as "tenancy by the curtesy and dower". The widower, if a child was born alive during the marriage, was entitled to a life estate in any real property owned by his deceased wife. This right was called "tenancy by the curtesy". The widow, regardless of whether children were born, was entitled to "dower" - a right to an estate for the remainder of her life in one-third of any real property in which her husband held a legal fee simple at any time during the marriage. Tenancy by the curtesy and dower have been abolished in the Canadian common law jurisdictions and replaced with protections given under family property and homestead legislation. But married couples commonly create similar estates by express grant - wills leaving each other a life estate in the family home, with the property to be shared among the children, or to go to a favoured charity, at the end of the life estate.
THE DOCTRINE OF WASTE
With the life estate, as with the leasehold, the holder of the estate in fee simple grants to another some of the rights and obligations that make up ownership. The holder of the life estate, sometimes called the "life tenant" (do not let the terminology mislead you into thinking that the life estate is a leasehold), has the immediate right to possession of the property and to its use as the owner, subject to some restrictions to protect the rights of the person entitled to the property at the end of the life estate.
The grantor retains the fee simple in reversion and, on the death of the life tenant, will again have the immediate right to possession. Or the grantor may transfer the fee simple to another by creating a remainder interest after the life estate. In a grant "to my wife for life, then to my eldest daughter and her heirs", the wife receives a life estate, and the daughter receives a fee simple in remainder. In the days when property owners were men more often than women, holders of a remainder were called "remaindermen". Now we call them "remainderpersons". For now, remember that a remainder and a reversion are distinct interests following after an estate that is less than a fee simple. The reversion reverts to the grantor; the remainder is transferred to another grantee and so remains away from the grantor.
With the life estate, the rights and obligations that make up ownership of an estate in land are devided between the life tenant and the person entitled to the reversion or the remainder. The life tenant may exclude the reversioner or remainderperson, as the case may be, from physical access to the property, but rights to use and transfer the property are restricted by the terms of the grant and by the common law doctrine of waste. "Waste" as a legal terms means action or inaction that permanently alters the land, regardless whether the alteration is for better or worse. At common law, action that improves the land is called "ameliorating waste"; life tenants will not be liable for making improvements, although they cannot force the reversioner or the remainderperson to pay for them. "Permissive waste" is waste by omission - failing to do what a prudent owner would do to maintain the property. Life tenants are not liable for permissive waste, although they are ordinarily responsible for current expenses and routine maintenance, such as cutting the grass and ensuring that snow doesn't build up and cause damage to the roof.
Life tenants are liable for "voluntary waste" - action that damages the property, unless the grant of the life estate makes the life tenant unimpeachable for waste. It is not voluntary waste if life tenants cut reasonable amounts of wood for their own fuel or construction needs and, in newly-colonized jurisdiction in which forests are far-reaching and fields few, life tenants may clear lands for farms. Life tenants may work a mine that already exists on the property, but they cannot open a new one. Even if the grant makes the life tenant unimpeachable for waste, the life tenant will be liable to the reversioner or remainderperson for wanton and severe destruction. Because it was the court of equity that first held the life tenant liable in these situations, by issuing injunction to restrain the activity, this kind of waste has the peccular name of "equitable waste".
Since reasonable people might differ on where to draw the line between permissible use, ameliorating waste and voluntary waste (does the concrete wall painted flamingo pink and topped with crushed glass and ribbon wire really improve the property ?), the grantor should spell out the respective rights of life tenant and reversioner or remainderperson in the grant. Some jurisdictions have legislation addressing lacunae in the common law doctrine of waste, such as legislation enabling life tenants and reversioners or remainderpersons to compel each other to maintain the property.
TRANSFERRING A LIFE ESTATE
As life tenants cannot give any greater estate than the one that own, the life tenant will have difficulty raising money on the security of the property. What creditor would take a mortgagor ?. Likewise, leases of a life estate could be cut short by the death of the life tenant unless the reversioner or remainderpersons joins in the lease. Life tenants, can, however, transfer an estate to another that will end with the death of the original life tenant. This estate is called a "life estate pur autre vie", roughly translated as a life estate pur autre vie to be created directly, by a grant from O "to A for so long as B lives". B acquires no rights in the property by the gran, but is simply there as a measuring life for A's estate, which will end with B's death. In law French, the measuring life is called the "cestui que vie".
What happens if the holder of the life estate pur autre vie dies before the cestui que vie ?. Suppose A, holder of a life estate from O, grants a life estate pur autre vie to B. Then B dies before A. A can take back possession because O's reversion does not come into possession until A's death. But if O transfers to B for the life of A, and then B dies before A, who is entitled to possession ?. We know O has a reversion in fee simple on the death of A, the cestui que vie, but A is still alive. So O has no right to the property yet. A acquired no rights under the grant, and acquires none by B's death. Neither do B's heirs, as the life estate is not an inheritable estate. At common law, then, the first person to drift into the property could keep it; in a system of relative rights, a claim based on possession will be recognized and enforced by law unless someone comes forward with a better claim basen on title. In order to avoid nasty encounters between people wishing to establish themselves as the first to take possession of a tenantless life estate pur autre vie transferrable by will or on intestacy.
The life estate brings the contradictory values in the common law into open conflict : how can the law preserve property for the reversioner or remainderperson while allowing the life tenant the greatest economic yield from the property ?. During England's transition from an agricultural to an industrial or commercial economy, legislation was pased to permit life tenants some freedom to effect conveyances of the property in which they held their life estate that would bind the remainderpersons, generally with court approval. The life tenant could use the income on the proceeds, with the capital held in trust for the remainderpersons, who, at the time of received this legislation when they became British colonies, and some have enacted legislation to archieve similiar goals. As with the doctrine of waste, English statute and common law as received in Canada does not adequately respond to problems in this area.
Umpteen posts of tabir hukum about live estates, hopefully the writing of tabir hukum about live estates can be beneficial.
Books : In Writing Tabir Hukum :
Alan M. Sinclair and Margaret E. McCallum, 2005. An Introduction to Real Property Law (Fifth Edition). LexisNexis : Canada.
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| Figure Property Law : Freehold Estates - Life Estates |
