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If a property is owned by tenants in common but has a life tenant (who does not own the property so there are three parties involved) who is responsible for outgoings such as rates and repairs?

If one of the owners lives on the property and the other does not, does the responsibility change?

I would think it would be equitable for the life tenant and the owner who lives on the property to share the expenses, as the tenant who does not live on the property receives zero benefits from the property until it is sold (if both tenants in common — which means no survivorship rights — are also the remaindermen) in equal shares). However, in the mean time, they are responsible for the outgoings of the property 50/50 with the other tenant in common. I think it is also equitable to have expenses of a capital nature (those expenses that affect the structural integrity of the property) looked after by all of the tenants in common and same with insuring the physical house. Day-to-day expenses, repairs, and costs should be met by those who live on the property or alternatively a rental agreement should be arranged at the market rate.

Yes, the specifics of the laws regarding this may vary from country to country but overall from what I've researched the agreements are fairly similar and this is a common occurrence. Life estates are particularly popular in estate planning.

  • I think it is up to the owners/tenants to agree, and if anybody is unhappy it might be time to quit/sell their share. I doubt there is any law to intervene here. – Greendrake Dec 30 '17 at 8:58
  • If there is a life tenancy it can't be sold until the life tenant dies or all parties agree to sell their shares but all parties have to agree to this. If they don't (for example the life tenant has nowhere else to live) then an agreement should be made otherwise the tenants in common legally have to pay for all the expenses in equal shares regardless of who is living in the house. – jphillips Dec 30 '17 at 10:23
  • This is a good question even though it is surprisingly difficult to answer due to historical legal doctrines that would be impossible to know if you had not heard of them in advance that make the answer somewhat indeterminate. – ohwilleke Dec 31 '17 at 21:17
  • Also, "legal life estates" are actually old school and unpopular in estate planning (and a peculiar to common law countries). Modern estate planners have the property held in trust by a trustee with an equitable life estate beneficiary and a trust instrument that is more clear about who is responsible for what. – ohwilleke Dec 31 '17 at 21:19
  • Yes, much more common these days to be set up through a trust or will rather than attached to the title I believe. – jphillips Dec 31 '17 at 23:03
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The co-owners are jointly and severally liable for the expenses belonging to the owners. How they choose to split these is for them to agree.

The (life) tenant is responsible for the expenses belonging to the tenant.

What belongs to the owner and what belongs to the tenant is for the tenancy agreement to spell out. Usually “fixed” costs like rates and land taxes go to the owner and “variable” costs like water and electricity go to the tenant but there is no hard and fast rule.

  • According to these legal websites (see: 1 and 2), they say that the life tenant is responsible for all expenses and outgoings. Here's a very old academic article which states the same. – jphillips Dec 31 '17 at 5:52
  • However, this website states that an estate may pay for the expenses. It's not like a usual rental tenancy agreement where fixed rates are paid by the landlord and metered expense are paid by the tenant. It seems the law is not very well-defined here. It is highly dependent on what the related parties come to agree upon by the looks of it. Thanks. – jphillips Dec 31 '17 at 5:52
  • Would a "life tenant" be established through an explicit trust? – Burt_Harris Dec 29 '18 at 23:35

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