2011©cengage learning. all rights reserved.. homesteads 2011©cengage learning. all rights reserved

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2011©Cengage Learning. All Rights Reserved.

Homesteads

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NATURE AND AMOUNT

Homestead protects a portion of a debtor’s family home from creditors.

Two types Declared homestead Dwelling house homestead

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NATURE AND AMOUNT

Purpose is to preserve the family by protecting them from a forced sale of their home.

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Amount Family homestead for $100,000 Age 65 or disabled homestead up to

$175,000 Regular homestead covers up to $75,000

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Equity Protection

Ninety Percent Limitation Selling Procedure Effect of Increase

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Equity Protection

Creditors Protected Homestead Recorded First Judgment Recorded First

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PRIORITIES

Recording Priority 1. Mechanic’s liens 2. Deeds of trust 3. Federal tax liens

Dwelling House Exemption

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Effect

A homestead protects a debtor’s equity from creditors.

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CREATION

Creation Requirements

Identity of Declarant Residency Stated Property Description Signed by the Declarant

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CREATION

Creation Requirements Identity of Declarant

Residency Stated Property Description Signed by the Declarant

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CREATION

Creation Requirements Identity of Declarant Residency Stated

Property Description Signed by the Declarant

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CREATION

Creation Requirements Identity of Declarant Residency Stated Property Description

Signed by the Declarant

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TERMINATION

Homesteads can be terminated only by prescribed methods.

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TERMINATION

A formal declaration of abandonment, properly executed and recorded, will terminate the homestead.

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TERMINATION

Alternatively, a homestead can be terminated by a homeowner recording a new homestead of a different property.

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