Volume 5 - Opinions of Counsel SBEA No. 33
Aged exemption (ownership requirement) (transfer of title between parent and child) (delivery of deed) - Real Property Law, § 244; Real Property Tax Law, § 467:
In determining whether an applicant for the aged exemption meets the length of ownership requirement of section 467, a transfer of title from parent to child and child to parent interrupts the chain of title in each case. However, title cannot be transferred without some delivery of the deed to the grantee or a third party.
We have received an inquiry concerning the ownership requirement of section 467 of the Real Property Tax Law, the so-called “aged exemption.” At issue is the question of whether there was ever an effective transfer of title to an applicant’s son during the time the applicant claims to have been sole owner of the property.
Section 467 provides that the owner-occupied legal residence of persons sixty-five years of age or over with limited incomes shall be exempt from taxation to the extent of fifty percent of the assessed valuation thereof, provided, among other things, that they have owned their homes for at least twenty-four consecutive months prior to the date of making application for exemption. As with all exemptions from taxation, this statute must be construed most strictly against the taxpayer-applicant. Thus the Court of Appeals recently confirmed a lower court opinion construing the length of ownership requirement of section 467 against the taxpayer. The opinion was to the effect that the presence of an under-age child’s name on the applicant’s deed prevented the granting of the aged exemption, and a subsequent return of full title to the aged applicants would not enable such applicants to be immediately entitled to the exemption; rather, the aged persons would have to own the property under the new chain of title for the full statutory period (Hassberg v. Tax Com’n. of City of New York, 81 Misc.2d 252, 367 N.Y.S.2d 884, aff’d, 44 App. Div.2d 909, 355 N.Y.S.2d 1014, aff’d, 36 N.Y.2d 817, 331 N.E.2d 680, 370 N.Y.S.2d 899).
The factual situation in the present inquiry appears to be as follows: Prior to an airplane trip in May, 1971 the applicant drew a deed to his property placing title in his son’s name. This was done with the expectation that if he did not return safely, title would thereby pass to his son. The applicant states that the deed was not delivered to his son or anyone else, but rather was locked away with other valuables.
The applicant returned from his trip safely, but was hospitalized in May, 1973. Subsequently, his son passed away. His daughter-in-law then came upon the deed drawn in 1971 and took it upon herself to record it on September 10, 1973. Upon discovery of the situation, the applicant demanded that title be transferred back to him. Apparently, this was done and a new deed was recorded in the applicant’s name on January 9, 1974. He then applied for the aged exemption which was denied on the basis that he had not held title for the statutory period, viz., twenty-four consecutive months. However, it is his claim that since there was never any delivery of his May 1971 deed, his daughter-in-law’s subsequent recording of said deed could not have transferred title from him and that therefore, in effect, he has been sole owner for a continuous period exceeding two years, despite these subsequent recordings.
Section 244 of the Real Property Law states that, “[a] grant takes effect, so as to vest the estate or interest intended to be conveyed, only from its delivery....” (emphasis added) This means that title can be transferred only by delivery of a deed; whether to the grantee or some third person. The mere drafting of a deed is not sufficient to effectuate such transfer. However, several cases have stated that the recording of a deed may justify a presumption of delivery, and in the absence of proof to repel such presumption, it will prevail (see, e.g., Ten Eyck v. Whitbeck, 156 N.Y. 341, 50 N.E. 963). As was stated in Ten Eyck v. Whitbeck, “[t]he question of delivery, involving as it does acceptance, is always one of intention, and where there is a conflict in the evidence, it becomes a question of fact to be determined by a jury” (156 N.Y., at 352). Further on, the Court noted that “[w]hile the presumption is that a deed was delivered and accepted at its date it is a presumption that must yield to opposing evidence. . . . The recording of a deed by a grantee is entitled to consideration upon the question of delivery, and in the absence of opposing evidence may justify a presumption to that effect” (Id.), (emphasis added) Thus, the presumption of delivery in that case was raised by the recording of a deed by the grantee. According to our facts, the deed in question was recorded by a third party subsequent to the death of the alleged grantee. This would appear to raise a serious question of fact as to whether there was an actual delivery of the deed to anyone. If there was no delivery, then subsequent recordings notwithstanding, there was never any transfer of title, title thus remained in the applicant’s name, and he would now satisfy the length of ownership requirement of the aged exemption.
However, we have no means at hand by which we can determine whether or not there was an actual delivery of this deed. As it appears now, it is the applicant’s testimony against the evidence before the assessor (the deeds recorded in 1973 and 1974). This dilemma might be resolved by a statement under oath from the daughter-in-law clearly indicating that the applicant never delivered the deed of May, 1971 to her and that in fact no third person, on behalf of the applicant, delivered the deed to her. This might be sufficient to convince the assessor that title has been held by the applicant for an unbroken time exceeding the statutory period.
July 7, 1975
NOTE: This Opinion superseded by Opinion 12-35.