Mary E. Repetti v. Director, Div. of Taxation

COMMITTEE ON OPINIONS

December 28, 2012

Ms. Mary E. Repetti

111 Bloomfield Avenue

Iselin, NJ 08830

Carolyn Lurry Mapp, Deputy Attorney General

Division of Law

Hughes Justice Complex

25 Market Street

Trenton, NJ 08625-0106

Re: Mary E. Repetti v. Director, Div. of Taxation

Docket No. 011365-2008

Dear Ms. Repetti and Ms. Mapp:

This letter constitutes the court s decision in the above-referenced matter, which contests the denial of the plaintiff s 2007 Homestead Rebate. The plaintiff s application for the rebate was denied because the Director, Division of Taxation ( Director ) determined that the plaintiff was not the owner of record of the property for which the rebate was sought. The property in question is 111 Bloomfield Avenue, in the Iselin section of Woodbridge Township. Plaintiff s letter complaint stated that the house for which she sought the rebate was titled in the name of her four sons at the request of her late husband. Plaintiff further stated that she was the sole resident of the house and that she paid the taxes and for the upkeep of the house. She submitted copies of checks payable to the Township of Woodbridge for each of the four quarters of 2007 as evidence of her payment of the tax bills. She also submitted copies of utility bills in her name and at the address of the subject property.

This matter was originally heard by telephone at the request of the plaintiff, at which time plaintiff confirmed the foregoing facts and also testified that she had a life tenant interest in the property. The court gave her additional time to submit proof of her lifetime tenancy. She subsequently submitted a copy of a preprinted, standard form of residential lease, with Daniel J. Repetti, Steven M. Repetti, Gary P. Repetti and Richard A. Repetti as landlords and plaintiff as tenant. The lease date was July 1, 1998. Paragraph 2, captioned term was filled in to state lifetime tenancy beginning on July 1, 1998. The rental was specified to be $0 dollars. Several of the paragraphs on the form lease, pertaining to such topics as security deposit, default, partial or total destruction of leased premised, alterations, landlord s right to enter, among others, were crossed out. There were handwritten additional terms at the end of the lease as follows: Tenant is responsible for all real estate taxes, homeowners insurance, maintenance and utilities for residence. . . . Tenant is given life tenancy rights as agreed by all parties. The lease was signed by the four persons listed as landlord, and by the plaintiff as tenant.

N.J.S.A. 54:4-8.59 allows a resident of this state an annual homestead rebate on a homestead owned by the resident. Homestead is defined by N.J.S.A. 54:4-8.58, in pertinent part, as:

a. (1) a dwelling house and the land on which that dwelling house is located which constitutes the place of the claimant's domicile and is owned and used by the claimant as the claimant's principal residence;

. . .

(4) for purposes of this definition as provided in this subsection, in addition to the generally accepted meaning of owned or ownership, a homestead shall be deemed to be owned by a person if that person is a tenant for life or a tenant under a lease for 99 years or more and is entitled to and actually takes possession of the homestead under an executory contract for the sale thereof or under an agreement with a lending institution which holds title as security for a loan, or is a resident of a continuing care retirement community pursuant to a contract for continuing care for the life of that person which requires the resident to bear a share of the property taxes that are assessed upon the continuing care retirement community, if a share is attributable to the unit that the resident occupies;

Defendant points out that the lease supplied by the plaintiff does not have the indicia of a typical life tenancy.

In construing a statute, a court must first look at the plain words of a statute, read according to their ordinary meaning, as long as that meaning comports with the statute s legislative intent. Koch v. Director, Div. of Taxation, 157 N.J. 1, 7 (1999). The words tenant for life are not plain and unambiguous. The term is a legal and technical one. Whatever rule of statutory construction is employed, the ultimate goal is to effectuat[e] the legislative plan as it may be gathered from the enactment read in full light of its history, purpose and context. Id. at 7 (citations omitted).

The statute in question does not define the term tenant for life, nor could the court locate any other New Jersey statute defining the term. In Estate of Franko v. Director, Div. of Taxation, 23 N.J. Tax 1, 5 (Tax 2006), the court had a similar difficulty in construing provisions of the transfer inheritance tax, N.J.S.A. 54:36-1, -3, and resorted to a dictionary definition: Black's Law Dictionary defines a life estate as [a] legal arrangement whereby the beneficiary (i.e., the life tenant) is entitled to the income from the property for his or her life. (citation omitted).

The general rule is that no particular form of words is necessary to create a life estate. 28 Am. Jur. 2d. Estates 67 (2012). However, in the absence of language amounting to a grant or gift, particularly with respect to a home, a document may be construed as simply granting a personal right or privilege. 28 Am. Jur. 2d Estates 69 (2012). See Battin v. Battin 94 N.J. Eq. 497 (E. & A. 1923)(affirming a determination that a will providing my widow and any unmarried child shall have a home at The Anchorage [an estate], did not grant a life estate and the concomitant right to collect rents on the property but only the option to use the property).

The lease document at issue here appears to create such a personal right rather than an ownership interest. It does not use any words connoting a grant or gift. It simply uses the word lease. The document specifically provides that the residence is to be occupied by Mary Repetti only. It further provides that Mrs. Repetti may not assign or sublet the premises without the consent of the landlord.

Words and phrases having a special and accepted meaning in the law are to be construed in accordance with that special and accepted meaning. N.J.S.A. 1:1-1. I therefore construe the term tenant for life, as used in N.J.S.A. 54:4-8.58, to mean the beneficiary of a conventional life estate who is entitled to the income from property for life. Estate of Franko, supra, 23 N.J. Tax at 5. I conclude that the Legislature did not intend to include persons with merely a personal right to occupy a residence for life among claimants eligible for a homestead rebate. The statute requires an ownership interest.

I recognize that this construction is a technical one. The natural inclination is to grant Mrs. Repetti the rebate because the residence is her principal residence and she pays the taxes. The Tax Court has, however, been cautioned that the judiciary has no power to devise tax programs or to qualify the existing legislative mandate with a judge s private view of what is sensible. MacMillan v. Director, Div. of Taxation, 180 N.J. Super. 175, 178 (App. Div. 1981)(reversing a Tax Court decision granting a homestead rebate under a predecessor statute to residents of continuing care communities with life-care contracts notwithstanding that the statute made no provision for such arrangements).

For the foregoing reasons, the determination of the Director is affirmed. Judgment will be entered accordingly.

Very truly yours,

Gail L. Menyuk, J.T.C.