Mr. Santora, I didn't mean you were wrong, I meant you misspelled it. It's "pur" not "por."
Are you sure it is not pour. "Por" is not a word, "Pur" means "pure" or "non-alcoholic drink", "Pour" is the preposition equivalent to the English "For". We are talking French here, correct? The literal translation is "For another's life". I took four solid years of French and my most confident sentence remains "J'AI besoin de stylo".
Just to add my 2 cents, I've been following but not writing.
A life estate has value. In fact, a life estate can be encumbered by a lien, which happens often enough in the case of medical expenses unpaid by the life estate holder. This lien would have to be satisfied with whatever value is left in the life estate upon the death of the holder. In fact it is possible in some states by law that such liens survive the death of the life tenant and encumber the third party's remainder interest. Minnesota is one of them, though a case is before the Minnesota's supreme court challenging its constitutionality.
I read the original post differently than what PE says it says. In the engagement letter, the client should state what interest we are appraising. PE reads it to say that the Life Estate interests were to be appraised, and in such a case then, that is what should be considered.
For tax purposes, from the point of view the of the remainder interest, in a tax appeal let's say, it would be the fair market value. In that case it will likely be something less than fee simple market value because the fee simple interest is encumbered by the life estate (and I know the Duck doesn't like "encumbered" but the law cases I have read on the matter have no problem with stating encumbered by the life estate and no one was laughed out of the court (at least in the abstract) for using such terms).
I was under the impression the OP called for a mortgage appraisal, which is typically the value of the property in fee simple, and all assumptions necessary to make are built into the form. I know a lot of people don't like the "built into the form" thing. Oh well, that's just how it is. The scope of work is fully included and it tells the reader the Fee Simple interests are being appraised and that the appraiser is rendering no opinions otherwise on title.
Each time I get a mortgage appraisal order on a house held in a life estate (and yes I get them regularly, I just got one three days ago), I call the client and tell them up front what the ownership is. This usually puts the order on hold and in some cases the order is cancelled. But in other cases they tell me they have the agreements in place by both parties and to proceed with the appraisal where the assignment calls for the value in fee simple. This is caveated throughout the report. On this point, concerning the mortgage appraisal on the fee simple interest, is where the parties herein split company.
I don't think what I do is out of line or incorrect. I am not a lawyer. I do not pretend to know all the inner actions of the law and the nuances contained in each situation. I do know that every lawyer I have spoken to says you cannot predict the outcome of any case. I personally believe the more confidence an appraiser has on this topic, the dumber he looks...and I point the finger first and foremost at myself. But like I said, until I see a court ruling to the very specific situation I appraise in, or a state appraisal board case to the exact situation, that is against my point of view, I will continue to believe I am doing nothing wrong.
