Library: Policy

340:10-3-4. Real property other than home property

Revised 7-1-01

(a) Scope and applicability. Real property other than home property is defined as real estate which is not maintained for home residence, mineral rights, life estates, or any other property which is not personal property. •1 Real property owned by a client is considered exempt as a resource for up to six calendar months only if a good faith effort to sell is being made and Form C-6 (new form number 08TA016E), Agreement to Repay, is signed by the client. •2 A good faith effort is defined as any recognized listing, posting, or advertising for sale at a reasonable, market price appropriate to comparable property values and a reasonable offer has not been refused. Once a resource has been exempted based on good faith effort, further exemption is not allowed.

(1) The exemption period is terminated when the property is sold, at the end of six months, or at any point in the six-month period when it is determined that a good faith effort to sell is not being made. At the end of the six-month exemption period, either the net proceeds from the sale of the property or the equity value of the property is considered as a resource. •3
(2) The market value of real estate other than the home owned by the client is established on the basis of oral or written information which the client has at hand and counsel with persons who have specialized knowledge about this kind of resource.

(b) Mineral rights. Mineral rights not associated with the home property are considered a resource. Since evaluation and salability of mineral rights fluctuate, the establishment of the value of mineral rights must be based on actual offers of purchase rather than on the opinion of collateral sources alone. The feasibility of listing the mineral rights for sale must be considered. The value of mineral rights on the total home property is considered along with surface rights.

(c) Land held by a member of an Indian tribe. Land which is held by an enrolled member of an Indian tribe is excluded from resources if it cannot be sold or transferred without the permission of other individuals, the tribe, or a federal agency.

(d) Life estates and homestead rights.

(1) Life estates. A life estate conveys upon an individual(s) for his or her lifetime, certain rights in property. Its duration is measured by the lifetime of the tenant or of another person, or by the occurrence of some specific event, such as remarriage of the tenant. The owner of a life estate has the right of possession, the right to use the property, the right to obtain profits from the property, and the right to sell his or her life estate interest. The contract establishing the life estate may restrain one or more rights of the individual. The individual does not have title to the property nor the right to sell the property. He or she may not usually pass it on to his or her heirs in the form of an inheritance. When a life estate in property is not used as the client's home, it is necessary to establish the value. •4
(2) Homestead rights. Homestead rights held by a client in real estate provides shelter and income as long as the client resides on the property. If the client moves from the property, abandoning homestead rights, the property becomes subject to adjudication. Since a homestead right cannot be sold, it has no value.

INSTRUCTIONS TO STAFF 340:10-3-4

The individual's statement regarding ownership of real property is sufficient proof of ownership unless there is information suggesting ownership of property not reported.
If the exemption period ends because the property is sold, an overpayment referral for the Temporary Assistance for Needy Families (TANF) benefits received during the period is submitted with Form C-6 (new form number 08TA016E), Repayment Agreement, and the recipient's plans to repay from the sale proceeds. If the exemption period ends and the property has not been sold, an overpayment referral cannot be submitted until the property has been sold or at the point the recipient stops making a good faith effort to sell the property.
The recipient's equity is determined by deducting encumbrances, including the cost to the recipient of obtaining a clear title.
To calculate the value of a life estate the Information Management Systems LEC transaction is used. To view this transaction enter M space LEC.