Florida Homestead Law and Creditor Protection-A Brief Overview

The Florida homestead law provides robust protection to a resident’s primary home from judgment creditors. According to Article X, Section 4 of the Florida Constitution, a judgment creditor cannot force the sale of a homestead to satisfy a creditor’s monetary judgment, nor does a recorded judgment attach to or become a lien on the homestead property.

Florida courts have extended homestead protection to various types of residences, including condominiums, mobile homes, and manufactured homes.

Florida’s homestead law offers extensive protection, arguably the most comprehensive in the United States. The protection covers the full value of a debtor’s homestead property, limited only by the size of the lot. Individuals from other states sometimes move to Florida and purchase a homestead to shield their assets from creditors.

Since homestead protection is enshrined in the Florida Constitution, it is more enduring than statutory protections, which can be modified or repealed by the legislature. Additionally, homestead protection cannot be overridden by future laws enacted by the Florida legislature.

Homestead property in Florida includes a natural person’s principal residence, up to ½ acre of land within a municipality or up to 160 acres in an unincorporated county. The homestead protection applies to contiguous property used by the homeowner’s family.

Regardless of the location, there is no limit on the square footage or the value of the physical residence. If the property exceeds the size limits, the homestead protection applies pro-rata to the total property value.

The Florida Constitution outlines specific exceptions to homestead protection. The homestead is not protected from:

  • Voluntary liens, such as mortgages or home equity loans.
  • Mechanics liens for improvements made to the property.
  • Liens recorded before homestead acquisition for homeowner association dues and assessments.
  • Property taxes, state taxes, and IRS tax liens.

To qualify for homestead protection, three main rules apply:

  1. Primary Residence: The property must be intended as the permanent, primary residence.
  2. Occupancy: The owner must occupy the property.
  3. Legal Title: The owner must hold legal title or a beneficial interest in the subject property.

Primary Residence: The homestead protection only applies if the property is the owner’s primary residence. This intent can be established immediately upon moving in.

Occupancy: The owner must physically reside in the property, although temporary absences are allowed. The homestead protection must be in place before a judgment is recorded in the county where the property is located.

Legal Title: The property must be titled in the owner’s name or a revocable trust. Properties owned by entities such as LLCs or irrevocable trusts do not qualify.

The Florida homestead exemption is a property tax benefit that reduces the assessed value of a home by $50,000 and limits annual increases in property tax assessments. To qualify, the property must be the owner’s primary residence as of January 1 of the calendar year for which the exemption is sought.

Proceeds from the sale of a homestead are protected if intended for reinvestment in a new homestead. The owner must actively search for a new home and keep the proceeds in a separate account, although they can be used for other expenses during the home search.

Florida homestead law exempts homestead properties from fraudulent conversion claims. A debtor can convert non-exempt assets into a homestead to protect them from creditors, even after a lawsuit has been filed, unless the money used was obtained through fraud or deceit.

To qualify, the debtor must be a permanent resident of Florida and the homestead property must be the primary residence.

Homestead protects your home from forced levy and sale by civil judgment creditors.

To claim the Florida homestead exemption, for asset protection, no action is required. For the tax exemption, filing an application or renewal with the county is necessary.

As to Florida homestead after death, the protection continues, and the homestead is not included in the legal proceeding known as probate.

Waiver of homestead protection is possible when pledging the homestead as security for a mortgage loan. Other waivers are generally unenforceable.

As for potential liens on a house in Florida, creditors with valid monetary judgments can get a lien on property, but the homestead is exempt from forced sale and liens.

The foregoing is a brief and general overview of the topic.

If you have any additional questions regarding the foregoing or have any legal issue or concern, please contact the law firm of CASERTA & SPIRITI in Miami Lakes, Florida.