Volume 7 - Opinions of Counsel SBEA No. 79
Sales reporting (conveyances) (life estate) - Real Property Law, §§ 290, 333(l-e); Real Property Tax Law, § 574:
When an instrument conveying a life estate is submitted for recording, it must be accompanied by a Real Property Transfer Report (Form EA-5217).
We are asked whether a Real Property Transfer Report (Form EA-5217) must accompany a conveyance of a life estate submitted to a county clerk for recording. In this instance, the grantor has issued a quitclaim deed, which conveyed a life estate to the parties possessing the remainder interest.
Section 333(l-e) of the Real Property Law provides, in pertinent part, that: “A recording officer shall not record or accept for record any conveyance of real property affecting land in New York state unless accompanied by a transfer report form prescribed by the state board of equalization and assessment. . .”. The term “conveyance” as used in section 333(1-e) is defined in section 290 of the Real Property Law as including:
every written instrument by which any estate or interest in real property is created, transferred, mortgaged, or assigned, or by which the title to any real property may be affected,. . . except a will, a lease for a term not exceeding three years, an executory contract for the sale or purchase of lands, and an instrument containing a power to convey real property as the agent or attorney for the owner of such property.
In its rules governing real property transfer reports, the State Board has also excepted from the definition of the term “conveyance”, easements, rights of way, leases (regardless of terms), license agreements and mortgages (9 NYCRR 191.9).
An individual possessing a life estate in property is deemed a life tenant and is entitled to the full possession, use and enjoyment of the realty for the duration of his natural life (Ackerman v. State, 199 Misc. 76, 102 N.Y.S.2d 536 (Ct. of Claims, 1951); In re McCarty’s Estate, 158 Misc. 287, 285 N.Y.S. 641 (Surr. Ct., Orange Co., 1936)). Thus, the life tenant is deemed the owner of the real property and among his obligations is that of paying the real property taxes on the property (Deraismes v. Deraismes, 72 N.Y. 154 (1878); Matter of Albertson, 113 N.Y. 434, 21 N.E. 117 (1889)). A life tenant, as owner of the real property for purposes of taxation, possesses a sufficient interest in the property to receive a tax exemption, provided he otherwise qualifies for the exemption (1 Op.Counsel SBEA No. 34; 3 id. No. 45; 1977, Op.Atty.Gen. 125).
Thus, it is clear that the grant of a life estate is a “conveyance” within the definition of that term in both the Real Property Law, section 290, and the State Board’s rules relating to the form and manner of reporting real property transfers, and that an EA-5217 must accompany the written instrument conveying the life estate, when submitted for recording.
While the EA-5217 Real Property Transfer Report Form in this instance may not contain information relating to current market value, the Form and reporting system have a function beyond that of providing sales price data. It is important to local assessment officials in updating assessment rolls to determine current ownership and to provide correct tax billing addresses (see, e.g., §§574(1), 922(1), as amended by L.1980, c.751). Since, as previously discussed, a life tenant is deemed the owner and, as such, is responsible for paying the taxes on the real property, an EA-5217 Form submitted with an instrument conveying a life estate will serve to alert the assessor to the change in ownership and will allow the assessor to make the appropriate changes on the next year’s assessment roll.
July 16, 1981