On 11 October 2021, the Real Property Amendment (Certificates of Title) Act 2021 commenced, which abolished the Certificates of Title (CTs) and the control of the right to deal (CoRD) framework. All existing CTs have been cancelled and CTs will no longer be issued. Existing CTs will not need to be produced, and CoRD holder consent will not be required, for a dealing or plan to be registered. All existing Guidelines subject to this change are currently being reviewed and will be updated to reflect these changes. For further information regarding the abolition of CTs, please see https://www.registrargeneral.nsw.gov.au/property-and-conveyancing/eConveyancing/abolition-of-certificates-of-title

Life estates

Common terms and situations

Estate in remainder

A form of estate in fee simple whereby the proprietor takes possession only on the termination of a life estate.

Life estate

An estate that gives the proprietor full proprietorial rights other than the right to pass the estate to heirs.

Life estate, contingent

An estate that terminates on the death of the life tenant or on the occurrence of a specified event, eg marriage, bankruptcy, etc. Note  The estate must be capable of extending until the death of the life tenant.

Life tenant

The proprietor of a life estate.

Pur autre vie

A life estate enjoyed by the tenant for the life of another person, e.g. X has a life estate for the life of Y; X loses the proprietorial rights upon the death of Y. Y has no claim to ownership of the land. Note  If X dies, the life estate pur autre vie will be transmitted to X's beneficiary etc.

Remainderperson

The person entitled to take up the estate in fee simple upon the termination of a life estate.

Remainder, contingent

An estate in remainder expectant upon:

  • the happening of a specified event.  If the event does not occur the estate reverts to the original registered proprietor, e.g. X transfers a life estate to Y terminating if Y becomes bankrupt in which case it passes to Z, the contingent remainderperson.  Z may never come into possession; or
  • the death of the life tenant that will vest the estate in persons who, at the time of its creation, were not ascertainable, e.g. X transfers an estate to Y for life, and upon the death of Y to X's children.

Remainder, vested

An estate in remainder that is solely dependent on the death of the life tenant.

Termination

The instrument creating a life estate must specify the circumstances in which it will terminate, i.e:

  • the death of the life tenant
  • the death of the specified person in the case of an estate pur autre vie
  • the happening a specified event or
  • a combination of these.

On termination of the life estate the remainderperson may apply to be registered as proprietor of the fee simple by lodging a Notice of Death form 02ND (PDF 94 KB), suitably modified, or a Request form 11R (PDF 132 KB) accompanied by the appropriate evidence

Note  The death of a remainderperson does not result in termination of the life estate; the estate in remainder will be transmitted in the usual manner.

Creation of a life estate and estate in remainder

A life estate and estate in remainder may be created by:

  • a transfer by the registered proprietor
  • a transmission application pursuant to the terms of a will etc or
  • a Primary Application.

The dealing must include defining words such as 'for life', 'for the term of his/her life' etc.

The life estate may be created over less than the whole of the share or interest and as regards less than all of the registered proprietors.

A registered proprietor, X, may, for example:

  • transfer a life estate to Y and Z as joint tenants, and retain an estate in remainder, i.e. when the life estate terminates X regains ownership of the estate in fee simple by reversion. The form of notification will be:

'Y And Z As Joint Tenants of A Life Estate And X of an Estate In Remainder''.

  • transfer a life estate to W and transfer the estate in remainder to Y and Z as tenants in common in equal shares, i.e. when the life estate terminates Y and Z take up the estate in fee simple. The form of notification will be:

'W Of A Life Estate And Y And Z As Tenants In Common In Equal Shares Of An Estate In Remainder'.

  • transfer an estate in remainder to Y and retain a life estate, i.e. when X's life estate terminates Y takes up the estate in fee simple. The form of notification will be:

'X Of A Life Estate And Y Of An Estate In Remainder'.

  • transfer a life estate to Y expectant upon the death of Z and an estate in remainder to W, i.e. W will take up the estate in fee simple upon the death of Z. If Y dies before Z the life estate will pass to the beneficiaries etc of the will of Y. The form of notification will be:

Y Of A Life Estate Until The Death Of Z And W Of An Estate In Remainder

  • transfer a life estate to Y or until a specific event occurs and an estate in remainder to Z, i.e. Z will take up the estate in fee simple upon the death of Y or earlier if the specified event occurs. The form of notification will be:

'Y Of A Life Estate Until [details of the specific event] And Z Of An Estate In Remainder'.

  • transfer a 1/2 share as a life estate to Y and Z as joint tenants and transfer the estate in remainder to W and V as tenants in common in equal shares (X retains the fee simple 1/2 share). The form of notification will be:

'Y And Z As Joint Tenants In 1/2 Share Of A Life Estate, W And V As Tenants In Common In Equal Shares Of An Estate In Remainder, And X In 1/2 Share'.

Dealings affecting the life estate or estate in remainder where separate titles have not issued will be registered as affecting the particular estate, not the proprietor, e.g. a mortgage from ABC to a life tenant, Y, will be entered as:

'24680 Mortgage To ABC Affecting The Life Estate'.

Note  A registered proprietor may grant a lease for the life of the lessee or for the life of an independent person.

See Baalman And Wells, Land Titles Office Practice, Lawbook Co. 2001 [150.100].

Dealings involving a life estate

Dealings by a life tenant

While free to deal with the estate, a life tenant cannot create an interest that will exist after the life estate terminates, e.g. a mortgage of a life estate will be cancelled upon termination of the life estate.

Note  An exception exists for a lease given by a life tenant pursuant to s68 Conveyancing and Law of Property Act 1898 which has been made binding on the remainderpersons, i.e. the lessee may remain in possession of the property after the life tenant has died.

See Baalman And Wells, Land Titles Office Practice, Lawbook Co. 2001 [285.800].

Dealings by a life tenant and remainderperson

If all of the registered proprietors of the life estate and estates in remainder enter into a dealing, that dealing will have the same effect as a dealing with the fee simple. The interest thus created is not affected by the termination of the life estate, e.g. a mortgage or lease entered into by the life tenant and the remainderperson will remain on title after the life estate ceases.

Dealings by a remainderperson

A vested remainder may be dealt with by the remainderperson provided the dealing does not create an interest greater than the estate in remainder.

A contingent remainder cannot be dealt with until it is vested.

Life estate and estate in remainder folios

Computer folios

The life estate and estate in remainder are contained in the one computer folio of the Register, e.g. X Of A Life Estate And Y Of An Estate In Remainder. An interest relating to one of the estates only is recorded in the Second Schedule as affecting that estate, not the proprietor, e.g. 'T123 Mortgage To Leopold Bloom As Regards The Life Estate'.

Manual folios

Both estates may be contained in the one folio of the Register or separate folios may be created at the request of the proprietor.

In the latter case, Old Form folios will refer to the type of estate below the Volume and Folio number and in the land description; New Form folios will refer to the type of estate in the land description only. The folios may be dealt with separately.

Merger of life estate and estate in remainder

Where a life tenant acquires the estate in remainder or the remainderperson acquires the life estate the dealing may be registered to show the proprietor as holding the estate in fee simple, i.e. reference to life estate and estate in remainder are removed.  An application to merge the estates is not required.