real-estate property trusts-and-estates estate-planning
Who is responsible for the property expenses with a life estate which is owned by tenants in common, when not all of the owners live on the property?
<p>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?</p>

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

<p>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 <a href="https://en.wikipedia.org/wiki/Concurrent_estate#Tenancy_in_common" rel="nofollow noreferrer">tenants in common</a> — which means no survivorship rights — are also the <a href="https://en.wikipedia.org/wiki/Remainderman" rel="nofollow noreferrer">remaindermen</a>) 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.</p>

<p>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.</p>

<p>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.</p>

<p>The (life) tenant is responsible for the expenses belonging to the tenant.</p>

<p>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.</p>
