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Real property consists of land and any attachments such as dwellings and other buildings. Property owned by the a/r, solely or with another person, may be a countable resource unless it can be excluded for one of the reasons in V. below.
Document the a/r’s statement regarding ownership and location of real property.
A. Verify the ownership of real property by:
1. Copies of deeds (Grantee/Grantor books at the office of the Register of Deeds)
2. Documentation or printout of tax record showing property
3. Copies of wills
5. Evidence of judgments, liens, or boundary disputes
6. For applications, request a tax record check from other counties/states if client has recently moved to their current county of residence.
B. Determine the equity value of all real property by:
1. Verifying the tax value by using tax records;
2. Verifying encumbrances with the lien holder
a. Determine if there are any debts or loans (encumbrances) owed on the resource. Verify the payoff amount owed as of first day of the verification month by contacting the creditor (bank, finance company, etc.). If there are no encumbrances, the value is the equity value.
b. If there are encumbrances, subtract the amount owed on the resource from the value. The remainder is the equity value. If the encumbrances exceed the value, there is no equity value for the resource.
EXAMPLE: Property with a tax value of $120,000. Encumbrances include first mortgage, payoff is $32,000; home equity loan, payoff is $8200; Countable equity value is $79,800.
NOTE: If the a/r reports that he/she owns property in another county, state, or country, and you are unable to obtain the verification, ask a/r to assist in obtaining the verification of the real property.
Fee simple ownership means absolute and unqualified legal title to real property. The owner(s) has unconditional power of disposition of the property during his or her lifetime. Upon his or her death, property held in fee simple can always pass to the owner's heirs. Fee simple ownership may exist with respect to property owned jointly or solely.
a. A life estate interest is created when a person transfers real property to another person but retains the rights to the property for the remainder of his/her life. To determine the value of a life estate interest, multiply the tax value by the life estate percentage from the Life Estate/Remainder Interest Unisex Table (Figure 3) based on the age of the life estate holder. If there is more than one life estate holder, use the age of the youngest.
b. If there is an outstanding lien/mortgage against the property, multiply the payoff amount by the same percentage from the Life Estate/Remainder Interest Unisex Table. Subtract the a/r’s share of the lien/mortgage from his/her share of the tax value to determine the equity value.
a. A remainder interest is created when a person transfers real property to another person but retains the rights to the property for the remainder of his/her life. The person to whom the property is transferred has a remainder interest. To determine the value of a remainder interest, multiply the tax value by the percentage from the Life Estate/Remainder Interest Unisex Table (Figure 3) based on the age of the life estate holder.
b. If there is an outstanding lien/mortgage against the property, multiply the payoff amount by the same percentage from the Life Estate/Remainder Interest Unisex Table. Subtract the a/r’s share of the lien/mortgage from his/her share of the tax value to determine the equity value.
Property owned jointly by husband and wife is usually held by them as tenancy-by-the-entirety.
a. If the conveyance of the property is made to the couple during the marriage, they hold the property as tenants-by-the-entirety even if it is not specifically stated in the deed.
b. If the couple separates, whether legally or not, this does not dissolve tenancy- by-the-entirety. If they divorce, the tenancy-by the-entirety is dissolved, and they become tenants-in-common of the property, and either person can sell his half share.
a. Property owned by 2 or more persons who are not married to one another or given to 2 or more persons by gift, will, or by intestate succession is held as tenancy-in-common. Each person has an undivided fractional interest in the whole property. Each owner may sell or give his individual interest in the property to another without the consent and participation of the other owners, and he may file suit with the court for partition of the property. Though property owned jointly by husband and wife is owned by tenancy-by-entirety, a legally binding agreement can be made that creates tenancy-in-common between husband and wife.
b. If there is a legally binding agreement that specifies each owner’s share, multiply the tax value by the fractional interest stated in the agreement for the a/r. If there is no legally binding agreement specifying shares, divide the tax value by the number of tenants in common.
c. If there is a lien/mortgage on the property, multiply the payoff by the a/r’s ownership share of the property. Subtract the a/r’s share of the lien/mortgage from his/her share of the tax value to determine the equity value.
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For questions or clarification on any of the policy contained in these manuals, please contact your local county office.
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