Life estate VS fee simple

[Fred]

Never seen a deed specify what property interest is conveyed. Leased fee is a property interest; a property subject to long term leases is conveyed as a leased fee interest not fee simple. I don't believe I've ever seen that specified in the deed but that is the reality of the situation.

I have seen thousands of em say that. That includes shopping centers, office buildings, etc.

FWIW, there has been some movement in the legal profession to replace the "mediaval" language of real estate. So, in some places, it is statutory that "warranty deed" means fee simple.

Also, I notice you say leased fee is "long term" leases. The AI makes no such distinction.

 

[Pittsburgh Pete]

I have seen thousands of em say that. That includes shopping centers, office buildings, etc.

FWIW, there has been some movement in the legal profession to replace the "mediaval" language of real estate. So, in some places, it is statutory that "warranty deed" means fee simple.

Also, I notice you say leased fee is "long term" leases. The AI makes no such distinction.

I know that to agree with me would kill you. My point is merely is that if leases are short term in nature and at a rate that approximates market rent, that the market value of a fee simple interest and the market value of leased fee interest are virtually identical. When leases are of a longer term, there is more likelihood that the market value of a fee simple interest and the market value of leased fee interest would be different.

It's merely a practical appraisal consideration. Has only tangential relevance to the topic at hand.

 

[Pittsburgh Pete]

I have seen thousands of em say that. That includes shopping centers, office buildings, etc.

Must be a NY thing. Around here they typically don't differentiate in the deed unless the property involves a life estate or leasehold interest.

 

[Webbed Feet]

<..... snip......>FTR, I didn't do the appraisal. A friend in Tampa did it and asked my opinion. They also called a real estate lawyer friend who said it was a "conditional fee simple ownership".

Many people often need to get a different lawyer.

Webbed.

 

[Webbed Feet]

Really? I went into my files. I am looking right at a deed. The father grants fee simple to the son, and sets aside a life estate for the wife. I know, it's "badly written," because it doesn't say what you want.

No, it's only not badly written as sometimes you enjoy never ending tennis matches. :new_smile-l:

I am perfectly willing to believe you that this son (remainderman, holder of the estate in remainder, whatever) is not the owner of the fee simple title. I really am. However, it is going to take more than you repeating - It's not fee simple, it's not fee simple.

Ok, it's not fee simple.... Guess you needed it three times.

It just so happens to have all three criteria of fee simple listed in Black's Law Dictionary. It's disposable - the son can sell his interest. It has descendability - it passes to his heirs. It has durability - it will pass to heirs in perpetuity. As you say, the chain can break if there are no heirs. So?

Good for Black! Unfortunately the owner of the Estate in Revision or Remainder does not have the right to any longer create other lesser estates that involve the rights the Life Estate owner now has.

I had property law in college, before I ever saw an appraisal book. I don't know if that nullifies your peer theory.

Since I was referring to people making examples of leases to you... what the ding dong does my comment about peers have to do with you being any "peer" I was meaning? Maybe one of them can come back at me with their nose out of joint, but not you. I wasn't posting about you in that regard. Besides, under the somewhat new definition of "Peer" my "peer" has to be appraising Oregon properties that are painted yellow with purple polkadots and driveway on the left, like I just did, or they aren't my peers either. Just gotta love that new defintion of "Peers."

Webbed.

 

[Webbed Feet]

There doesn't have to be a document on a mortgage appraisal using the URAR (i.e., a mortgage appraisal), the assumption of fee simple interest is built into the assignment and I am certifying that I will not render any opinion on title. Stating that the assignment results reflect the Fee Simple interest in the property and disclosing the current ownership as a life estate is adequate. There is still a fee simple ownership available on the property, the rights did not go 'poof' and disappear as Webbed says. Structuring the loan is the job of the lender, not the appraiser. I simply state what I know and state which rights I am appraising.

LOL! .... Ok!... So since there is an "assumption" the land / site is not polluted ... a Superfund listing, all sorts of dead animals and birds on the site, people that remain on the site more than a hour all glowing green and dying three days later, would all be small items we just "mention" and then proceed right on as if the site is not contaminated.

Gosh, I get it now! I'm not supposed to know what I know that are facts, I am only supposed to know what I assume even when I know for sure they aren't facts. And not bother to state the affect on the assignment that had. :Eyecrazy:

Webbed.

 

[Pat Butler]

The lender will likely have their mortgage take priority over all other interests in this life estates by having the parties with the interests sign the appropriate documents. Much the same as when someone owns a property in trust. Also similar to a married couple who own a property but only one of them gets the mortgage- the lender will still require the other spouse to sign off on homestead rights.

That takes care of the life estate issue. Now, the lender is mostly concerned about what the property is worth for the purpose of having to possibly foreclosure on it and sell it in the future. At that time they would be selling a property with a fee simple interest because the life estate interests would have been extinguished via the foreclosure process. They won't be selling the property subject to a life estate if they foreclose on it.

Nothing wrong whatsoever to appraise it in fee simple if that's what the client wants. There are all sorts of interests and rights in real estate that we ignore everyday. Or else, we'd need a copy of the title report and have to appraiser every slice of 'interest' in every property.l

 

[Webbed Feet]

<....... snip.....>
Nothing wrong whatsoever to appraise it in fee simple if that's what the client wants. There are all sorts of interests and rights in real estate that we ignore everyday. Or else, we'd need a copy of the title report and have to appraiser every slice of 'interest' in every property.l

Mr. Butler,

I agree! ... Just as long as the client can deal with the HC I'll be using and the description of the affect on the analysis I'll be providing due to the current effective date when only a Life Estate and Remainder / Reversion Estate exists. Most likely on generic forms as well. Why? Because, as I have posted....

M.V of L.E. + M.V. of R/R Estate does not equal M.V. of Fee Simple Estate. Not anymore than the M.V. of a vacant lot plus the contracted price of a manufactured home not on the site yet = M.V. of the site with a manufactured home on it sold as real estate.

For those that disagree. I challenge you to use a sale of a L.E. and then use a separate sale of the M.V. of any R/R Estate involved for that property to different parties, add them together and use that as a comp in a refinance appraisal. .. See what happens.

Webbed.

 

[Pat Butler]

I don't think a HC is even necessary. That gets blown away in SR1-2 where the appraiser simply identifies the real property interest to be appraised. Doesn't matter what interest the present owner has.

 

[Webbed Feet]

I don't think a HC is even necessary. That gets blown away in SR1-2 where the appraiser simply identifies the real property interest to be appraised. Doesn't matter what interest the present owner has.

Mr. Butler,

Turn it around. Your subject is currently owned by one party under Fee Simple. You are asked to opine what the M.V. of a Remainderman's interest "would be" if one were created. Are you going to create a SOW and deliver a report based on a nonexistant ownership interest created for a "what if" without invoking a HC?

I guess I have a great idea... How about all forum members call their own State appraisal boards, obtain a written opinion on this, and then all just do whatever they darn well please on it as long as their board is fine with it? We'll all call it the BIFWI Rule. It sure would end a bunch of these forum posts...

"Just see the BIFWI Rule"



Webbed.