Is my mom entitled to a share of the proceeds from sale of the house at the end of her life lease?

Full question:

My mother has been given life lease on a home that was purchased by her husband, who is now deceased and the home is in the children's name. When she decides to leave the residence, she has been advised that she has to sign off on the life lease. Is she entitled to any share of the proceeds in the sale of the house?

• Category: Real Property
• Date: 04/07/2025
• State: New York

Answer:

It is not clear from your question whether the particular property is held as a “life estate” or “life lease,” so you may want to review the transferring document or deed to determine specifically what property interest is held. In either instance, the holder of the property interest in question may be entitled to a portion of the proceeds of a sale of such property during the holder’s lifetime.

A life estate is where a person owns all the benefits of ownership in the property during their life, or the life of another, with the property going to a remainder person after the death of the life tenant. It is an interest in real or personal property that is limited in duration to the lifetime of its owner or some other designated person or persons. A life estate may be transferred, such as selling the interest to the remaindermen, by means of a deed or bill of sale.

A life lease can be for the life of the tenant, for a specific term (e.g. 50 years), or for specified termination date. Under a life lease, a tenant pays an entrance fee for a rental unit. The tenant also pays rent each month to cover maintenance and other expenses and has exclusive use of their suite, shared use of all common areas and facilities, and other benefits. Majority of life lease communities are developed and owned by non-profit organizations, charitable groups, service clubs or religious institutions. Properly structured, the life lease form of ownership offers similar protection to freehold ownership.

The following is a New York statute:

§ 967 Real Prop. Acts.

Payment of proceeds to owner of particular or future estate. A party who has a right of dower, or is a tenant for life or for years, in or of an undivided share of the property sold, or has an inchoate right of dower or any other future right or estate, vested or contingent, or any person not in being who by any contingency may become entitled to any interest or estate in the property sold, is entitled to have a proportion of the proceeds of the sale invested, secured or paid over, in such manner as the court deems calculated to protect the rights and interests of the parties.