QUESTION PRESENTED
You asked us whether L. Z~ (Z~) has equitable ownership of a home owned by M. C~ (NH)
located on F~ Drive in Houston, Texas (F~ property). If Z~ is considered a joint owner
of the F~ property based on equitable ownership, you also asked whether we can exclude
the F~ property from the NH’s resources based on the resource exclusion under 20 C.F.R.
§ 416.1245, providing that excess real property is not a countable resource if it
is jointly owned and if the sale of the property by an individual would cause undue
hardship to the other owner due to loss of housing. You also asked us to review Dallas
Regional Program Operations Manual Systems (POMS) SI DAL 01130.100 to determine if
updates are required.
ANSWER
Based on the information provided, we believe that the agency may reasonably conclude
that under Texas law, Z~ did not have equitable ownership of the F~ property. With
respect to the NH’s SSI application, the resource exclusion for jointly owned property
contained in 20 C.F.R. § 416.1245 does not apply. Specifically, neither the NH nor
Z~ have offered evidence of an agreement that Z~ could have legal title transferred
to him upon performance of specific conditions, which Texas law requires to establish
equitable ownership. Further, the NH and Z~ did not satisfy Section 5.021 of the Texas
Property Code that the conveyance of real property must be in writing. In addition,
neither the NH nor Z~ offered any evidence that the NH intended to make an oral gift
of the F~ property to Z~. Because Z~ does not have equitable ownership of the F~ property,
the NH does not jointly own the F~ property and the resource exclusion for jointly
owned property does not apply. Instead, the F~ property is considered the NH’s excess
real property, and it is a countable resource because it is not the NH’s principal
place of residence. Additionally, the guidance provided in Dallas Regional POMS SI
DAL 01130.100 remains valid, and we do not believe updates to POMS SI DAL 01130.100
are required at this time.
BACKGROUND
The information you provided shows the NH applied for SSI. When evaluating her application,
the agency learned the NH had two properties in her name in Harris County. The Harris
County Appraisal District Real Property Account Information lists the NH as the owner
of two properties, the F~ property and a home located at N~ Drive in Houston, Texas,
which is her principal place of residence. The NH’s spouse died in October 1990. The
NH purchased the F~ property for Z~, her brother-in-law, because he had insufficient
credit to purchase the property. The Harris County Appraisal District shows the 2017
appraised value of the F~ property was $67,087.
In a Statement of Claimant or Other Person, Z~ stated he was unable to have the F~
property in his name because he did not have adequate credit to purchase it. He stated
that the F~ property is his house, he has been fully responsible for the mortgage
payments for the last 23 years, and he cannot move. He further stated that the NH
was not responsible for the mortgage payments. Z~ submitted mortgage payment receipts
from various dates ranging from 2008 to 2019, and a September 2017 statement showing
he was delinquent on mortgage payments. Z~ provided a written estimate for foundation
repair for the F~ property, but there is no evidence that such repair work was completed.
Z~ also provided a 2012 property insurance renewal for the F~ property listing himself
and the NH as the insured.
The agency obtained a statement from Z~, but the information you provided did not
include a statement from the NH. The field office contacted the NH for additional
development in June 2019, but the NH never provided a statement regarding ownership
of the F~ property. In a Disability Transmittal dated September 14, 2018, the agency
found the NH incapable of managing benefits and appointed O. C~, the NH’s son, as
her representative payee. C~ stated that the NH owned the F~ property, but did not
live there. C~ also stated that Z~ lived at the F~ property, and made the mortgage
payments because the NH owned back taxes on the property.
ANALYSIS
A. Federal Law and Agency Policy on SSI Resources
SSI is a general public assistance program for aged, blind, or disabled individuals
who meet certain income and resource restrictions and other eligibility requirements.
See 20 C.F.R. §§ 416.110, 416.202. “Resources” include cash or other liquid assets
or any real or personal property that an individual owns and could convert to cash
to be used for his or her support and maintenance. See 20 C.F.R. § 416.1201(a). A
house is a form of real property that may be included as a resource, but there is
an exception for an individual’s home. See 20 C.F.R. §§416.1201(a), 416.1212(b). To
qualify for the home exclusion, an individual (and spouse, if any) must have an ownership
interest in the home and the home must serve as the individual’s principal place of
residence. See 20 C.F.R. § 416.1212(a), (c). An individual’s home is excluded as a
resource regardless of its value. 42 U.S.C. § 1382b(a)(1), 20 C.F.R. § 416.1212(b).
Excess real property which would be a resource under 20 C.F.R. § 416.1201 is not a
countable resource for conditional benefit purposes[1] when the individual applying for SSI benefits jointly owns the property and the sale
of the property by the individual would cause the other owner undue hardship due to
loss of housing. 42 U.S.C. § 1382b(b)(2); 20 C.F.R. § 416.1245.
The agency recognizes three types of real property ownership. The first is fee simple
ownership that is an absolute and unqualified legal title to real property. SeePOMS
SI 01110.515 A.1. The other two types of ownership, a life estate or an equitable ownership, are considered
less than fee simple ownership. A life estate confers certain rights in property for
an individual’s lifetime and is usually created through a deed or will or by operation
of law. POMS SI 01110.515 A.2.a. Equitable ownership may occur when an individual does not have legal title to the
property. See POMS SI 01110.500 B.3.b.; POMS SI 01110.515 A.2.b. An individual may acquire an equitable ownership interest in his or her home through
personal considerations or by performing certain activities such as making mortgage
payments or paying property taxes, making or paying for additions to a shelter, or
making improvements to a shelter. See POMS SI 01110.515 C.3.
In order to determine whether the F~ property is excluded or included as a resource
for purposes of the NH’s SSI application, we must determine whether the NH and Z~
jointly owned the F~ property under the three types of real property ownership described
above. Z~ does not have fee simple ownership of the F~ property because he does not
have an absolute and unqualified legal title to it. Z~ does not have a life estate
over the F~ property because neither the NH nor Z~ have offered any evidence of a
life estate created through a legal document. Moreover, while neither the NH nor Z~
allege that an equitable life estate exists, we next analyze whether the facts alleged
support a finding that Z~ has an equitable joint interest in the F~ property.[2] See POMS SI DAL 01130.100 B.2.
Z~’s statement suggests he believes he has an equitable ownership interest in the
F~ home. See POMS SI 01130.100 C.4. For example, Z~ alleged that the NH purchased the F~ house for him because he had
insufficient credit to purchase property; he lived in the F~ house, and paid the mortgage.
The NH’s representative payee C~ stated that the NH owned the F~ property, but did
not live there. The NH’s representative payee C~ stated that the NH owned the F~ property
and owed back taxes on it, but did not live there. Consistent with Z~’s statement,
C~ also stated that Z~ lived at the F~ property, and made the mortgage payments. Because
the information provided does not clearly establish that the NH and Z~ had an agreement
that Z~ had an equitable ownership interest in the F~ property, we look to state law
to determine this issue. Because the NH is a resident of Texas and the home is located
in Texas, we look to Texas law to determine whether Z~ has an equitable ownership
interest in the home. See POMS SI 01110.500 C.
B. Equitable Ownership Under Texas Law
The NH’s position is that the F~ property should not be included in her resources
for SSI purposes because Z~ has an equitable ownership interest in the property. Z~
stated that the NH purchased the property for him because he had insufficient credit.
Under Texas law, to establish that the NH intended to gift equitable title to Z~,
the NH has the burden to show: (1) a present gift; (2) donee’s possession under the
gift with the donor’s consent; and (3) donee’s permanent and valuable improvements
with donor’s consent or other facts demonstrating the donee would be defrauded if
the gift were not enforced. In re Estate of McNutt, 405 S.W.3d 194, 196 (Tex. App.
–San Antonio 2013, no pet).
Under the first element, to be a present gift, the donor must, at the time he makes
it, intend an immediate divestiture of the rights of ownership out of himself and
consequent immediate vesting of such rights in the donee.[3] Troxel v. Bishop, 201 S.W.3d 290, 297 (Tex. App. –Dallas 2006, no pet.). Further,
Texas law defines equitable ownership as the present right to compel legal title.
AHF-Arbors at Huntsville I, LLC v. Walker County Appraisal Dist., 410 S.W.3d 831,
837 (Tex. 2012). A party may have equitable title if its right to compel legal title
is entirely within its control. See TRQ Captain’s Landing L.P. v. Galveston Cent.
Appraisal Dist., 212 S.W.3d 726, 737 (Tex. App. –Houston [1st Dist.] 2006, aff’d 423
S.W.3d 374 (Tex. 2014) (where tax exempt entity could dissolve subsidiary at any time
and articles of organization provided assets reverted to tax exempt entity upon dissolution,
tax exempt entity had present right to compel legal title). Equitable title does not
follow a mere expectation or a purely contingent interest. See Texas Turnpike Co.
v. Dallas County, 271 S.W.2d 400, 402 (Tex. 1954).In Texas Turnpike, the court noted
the difference between actual “equitable title,” the right of a grantee or other party
to compel the conveyance of legal title by performing some condition, and a merely
contingent interest in the property. Id. Courts have defined equitable title as “a
right, enforceable in equity, to have the legal title to real estate transferred to
the owner of the right upon the performance of specific conditions.” City of Houston
v. Guthrie, 332 S.W.3d 578, 588 (Tex. App. –Houston [1st Dist.] 2009, pet denied).
Neither the NH nor Z~ has offered evidence of an agreement that Z~ could have legal
title transferred to him upon performance of specific conditions.
Moreover, the evidence does not support that the NH made a written conveyance or an
oral gift of the property to Z~. Under Texas law, a conveyance of real property must
“be in writing” and “subscribed and delivered by the conveyor” or his agent. See Tex.
Prop Code § 5.021, see also Tex. Bus. & Com. Code § 26.01(a), (b)(4) (“Statute of
Frauds”). An exception to the requirement that a written conveyance exists if an individual
establishes the elements of an oral gift of real property in equity. See Estate of
Wright, 482 S.W.3d 650, 657 (Tex. App. –Houston [14th Dist.] 2015, pet. denied). Based
on the evidence provided, the NH and Z~ have not shown that the NH made an oral gift
of the F~ property to Z~. Courts in Texas have found an oral gift of property where
the grantor released to the grantee the rights and responsibilities of ownership.
See Estate of Wright, 482 S.W.3d at 657 (evidence sufficient to show oral gift of
property where donor stated “that was it,” the house was donee’s and at the same time
discontinued any additional rent payments from the donee); Troxel v. Bishop, 201 S.W3d
at 300 (evidence demonstrated present gift where grantor directed agent to transfer
legal interest to grantee by deed). Although Z~ stated he made the mortgage payments,
the Harris County Appraisal District record lists the NH as the owner of the F~ property.
Texas law provides that the property owner is liable for the taxes on the property
it owns. See Tex. Tax Code § 32.07(a). The NH’s responsibility for paying the property
taxes indicates that the NH retained the rights and responsibilities of ownership.
See Walker v. Walker, 2017 WL 1181359 at *6 (Tex. App. –Houston [14th Dist.] March
30, 2017, no pet.) (no present gift where grantor continued paying property taxes).
Therefore, the evidence submitted does not show that the NH intended to release all
control of the F~ property to Z~.
In sum, the evidence does not show that Z~ has an equitable interest sufficient to
compel transfer of legal title to him. Neither the NH nor Z~ has provided evidence
establishing a written conveyance of the F~ property or offered any evidence that
the NH intended to make an oral gift of the property to Z~. Whatever possessory interest
Z~ has in the F~ property, it does not appear to include the right to compel legal
title upon certain conditions. Based upon the evidence submitted, Z~ does not have
equitable ownership of the F~ property.
C. Resource Exclusions for Jointly Owned Property and Principal Place of
Residence
You also asked whether the F~ property could be excluded from the NH’s resources for
purposes of her SSI application under a resource exclusion. As discussed above, Section
416.1245 provides that excess property that would be a resource is not a countable
resource if it is jointly owned and the sale of the property by an individual would
cause the other owner undue hardship due to loss of housing. 20 C.F.R. § 416.1245.
Based on the evidence submitted, Z~ does not have equitable home ownership and would
not be considered a joint owner of the F~ property. Therefore, the resource exclusion
for jointly owned property under Section 416.1245 does not apply. Moreover, the F~
property is not the NH’s principal place of residence. In order for an individual’s
home to be excluded as a resource, the home must be the individual’s principal place
of residence. 20 C.F.R. § 416.1212(c); Sanders v. Sullivan, 756 F.Supp. 257, 258 (W.D.
Va. 1991) (home not serving as a principal place of residence is a non-excludable
resource). Because the F~ property is considered the NH’s excess real property, it
is a countable resource.
D. Review of Dallas Regional POMS
You also asked us to review Dallas Regional POMS SI DAL 01130.100 to determine if
any updates are required. POMS SI DAL 01130.100 provides that if an individual alleges
equitable ownership but has not established an equitable life estate, the district
office should obtain signed statements from all individuals involved and seek a legal
opinion. Agency policy further provides that when there is variance in state laws
with respect to ownership, the specific issues may need to be reviewed by the Regional
Office or Regional Counsel. POMS SI 01110.500 C. This guidance remains valid, and we do not believe updates to POMS SI DAL 01130.100
are required at this time.
CONCLUSION
We believe that the agency may reasonably conclude that under Texas law, Z~ did not
have equitable ownership of the F~ property and that the resource exclusion for jointly
owned property contained in 20 C.F.R. § 416.1245 does not apply. Specifically, neither
the NH nor Z~ have offered evidence of an agreement that Z~ could have legal title
transferred to him upon performance of specific conditions. Further, the NH and Z~
neither satisfied the requirement under Tex. Prop Code § 5.021 that a conveyance of
real property must be in writing, nor offered any evidence that the NH intended to
make an oral gift of the F~ property to Z~. Because Z~ does not have equitable ownership
of the F~ property, it is not jointly owned and the resource exclusion for jointly
owned property under 20 C.F.R. § 416.1245 does not apply. The F~ property is considered
the NH’s excess real property, and it is a countable resource because it is not the
NH’s principal place of residence. Additionally, the guidance provided in Dallas Regional
POMS SI DAL 01130.100 remains valid, and we do not believe updates to POMS SI DAL
01130.100 are required at this time.