What is a Homestead Declaration?

A Homestead Declaration is a legal document which can help to protect your house and property in times of economic hardship, and it has nothing to do with the process of filing a claim for HOMESTEAD EXEMPTION!! Rather, it's a short, notarized claim form that can oftentimes prevent the attachment of your land and dwelling by creditors.

Homestead Exemption is a property tax exemption and has separate legal or statutory basis. It is set up to allow a resident to exclude from the calculation of their ad valorem taxes of their residence. You must not confuse homestead property tax exemption with the Declaration of Homestead process, and do not allow anyone to convince you it is the same thing. IT IS NOT! There are separate and distinct laws and state statutes involved in each of these processes. A Homestead Declaration, when properly filed, is an asset protection exemption which can protect your home and property in times of economic hardship from liens, judgments and creditors. It has nothing to do with the process of filing a claim for a real estate tax break. Rather, it is a notarized, recorded claim by you that this is your homestead and cannot be subject to attachments, judgments or creditors.

Homestead rights don't exist under common law, but they have been enacted in at least 27 states: Alabama, Arizona, Arkansas, California, Florida, Georgia, Idaho, Illinois, Kansas, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Texas, Vermont, Washington, West Virginia, Wisconsin, and Wyoming. If you own, and live on, property in any of these states, you should definitely take the time to file this important document.

Our research shows that NO statutes regarding Homestead Exemption rights are in Pennsylvania, Rhode Island, New Jersey and Delaware. In Alabama, Louisiana, Massachusetts, Mississippi, Montana and Nebraska, a Homestead Declaration must be filed. In Alaska, Kentucky, Michigan, Missouri, Nevada and New Mexico a Homestead Declaration is not required. The balance of the states have elective filing by the homeowner.  Though they vary from one state to another, homestead statutes are similar in intent: They're designed to preserve family home, which might otherwise be taken in times of monetary misfortune or upon the death of the head of the household.

A legal judgment resulting from business losses, auto accidents, or suddenly inherited debts could take a family's savings . . . but with the safeguards provided by homestead statutes, their house and land will be protected up to the amount of exemption allowed by the state. You can protect a million dollar home as well as a mobile home, so why not file a Homestead Declaration to protect your home before anything happens in whatever state you may reside?

Some debts must be honored, with or without a Homestead Declaration. If you have put your property up as collateral on a loan, the homestead exemption does not apply as it can be foreclosed upon if the mortgage falls behind. Other debts not covered include property taxes and special assessments. And if you fail to pay for improvements on your house or land, a mechanic's lien can be placed on your property and sold in order to collect.

Although the cash value of homestead exemptions does vary, in most areas it's periodically adjusted upward or downward to keep pace with inflation and/or deflation. Fortunately, homestead laws are usually—in legal terms—"liberally construed". An apartment (if you own it), a mansion, a cabin, a mobile home, or a tent can qualify as a homestead . . . provided the dwelling is the "bona fide residence of the claimant". Generally speaking, homestead exemptions apply to single person homeowner or married couples and their families. Some states do have a "head-of-household" exemption that covers two or more people living as a family unit, provided one person supports the other members of the group. Should one spouse die, the survivor and any children are protected under the exemption until the survivor dies and the youngest child is of age. And naturally, the exemption terminates if you sell the property. Claims can be filed on successive dwelling places, but only on one homestead at a time.

If you're among those folks lucky enough to live in a state that recognizes the Homestead Declaration, you'd be wise to file IMMEDIATELY!  Downloading the form is inexpensive; easy to fill out and record at the courthouse and this simple action can give you peace of mind today, save you time, aggravation and money in the future, and it just might save your home.  

What is the difference between Homestead Exemption and Homestead Declaration?

Homestead Exemption is when you are allowed a determined dollar amount off of your tax assessment by and from the particular state and/or county your homestead is located. The state's homestead tax exemption is not a constitutional right. The tax exemption is also incorrectly referred to in many other ways by unknowledgeable realtors, brokers, attorneys and homeowners. 'Homestead Exemption' also, albeit incorrectly, sometimes refers to asset protection of a home or of real property as previously mentioned. Your home probably qualifies for a 'Homestead Exemption', which is related to ad valorem property taxes and assessments (Real Estate Property Taxes) which does not fully protect your home and real property from lawsuits, judgments or creditors. Homestead protection is not as 'automatic' as most people widely and commonly assume. The adage that 'they can't take your house' does not always ring true. In fact, it happens more today in the US than it did during the Depression.
 
Homestead Declaration on the other hand is a sworn statement by the homeowner of their election to claim this property as their homestead and as such has recorded same with the county clerk.  The statute allows homeowners to 'designate' and 'set apart' their homestead, to protect it from a forced sale to satisfy creditors, and to protect its equity.    
 
The exemption of a homestead from ad valorem taxation is quite a different thing from the exemption of a homestead from seizure and sale for debts, and therefore homestead issues and court decisions for tax purposes are not necessarily relevant to issues and decisions for forced sale purposes, the statutory provisions being entirely different as there are many case studies on this subject.

What kinds of property may be declared as a homestead?

The answer to this can vary from state to state, but a general legal definition is that a 'homestead' can be any structure, condominium, manufactured or mobile home, a motor home, vehicle, boat or vessel, tent, or any other livable structure usually on owned or leased land as long as the resident owns the 'home', or has an equity interest in it, and resides there. A homestead is usually the structure that a person lives in and land on which it sits. The property must be a person's primary residence for it to be eligible for a homestead declaration. The term homestead also includes any improvements legally defined as "appurtenances" to the land, such as a fence, addition or a gazebo. In fact, you may not have to be a resident of some states as long as the property you live in can be legally claimed as a homestead.

Who decides to declare a homestead?

A single person, or in the case of a married couple, either or both spouses.

Does a homestead declaration prevent my home from being sold to pay all judgments?

NO. A Homestead Declaration will not protect you from the following:
• Unpaid Taxes.
• Unpaid mortgage, trust deed or other loan arrangement used to purchase or refinance your property or improvements to your property.
• A mechanic’s lien or other obligation to pay because of improvements made to your property.
• Any lien to which you agree by accepting the property subject to codes, covenants and restrictions, deed restrictions or equitable servitudes.

If someone obtains a judgment against me, how will a declaration of homestead protect my home?

For most judgments against you, a homestead declaration protects the equity you have in your home up to a given amount depending upon the state you live.

Suppose I have more  equity in my home than allowed by the statutes, what are the procedures if there is a judgment against me?

A judge normally will appoint  appraisers who will determine the value of the property, your equity in it and whether the property can be divided in such a way as to protect your home while paying your judgment creditors. If such a division proves to be impractical, the property will be sold and you will receive the allowed limit from the sale under homestead rights in the state you reside, which cannot be seized to pay the judgment.

What information must I include in a homestead declaration?

If an unmarried person is making the homestead declaration, it must state that the person is the homeowner. If a married person or persons sign the homestead declaration, it must state if the person or persons are married.
• Regardless of the martial status of the signer of the declaration, it must state that the intention is to use and claim the property as their homestead.
• When the homestead declaration is signed by a married person or persons, it must state that the spouse or spouses are residing with their family, or with a person or persons under their care and maintenance, on the homestead premises.
• If the premises are the separate property of one spouse, both spouses must join in signing the homestead declaration.
• The premises claimed should be described by a full address and a full legal description. The deed to your property will contain the legal description.

May a homestead be filed for property held by the type of title known as “tenancy in common?”

Yes. Each tenant in common may declare a homestead covering his or her interest in the property. The homestead protection is subject to the rights of each co-tenant to enforce partition of the property.

NOTE: Although it may not be required in the state you reside that each tenant file a separate form, we recommend that non-married joint tenants each file their own separate homestead declaration just to be on the safe side.

What is the appropriate time to file a homestead declaration?

If you have not done so already, it is recommended you do so IMMEDIATELY! No one can predict when death or sudden incapacity may strike, so it is prudent to file a homestead declaration upon purchasing a home and taking title to it, or as soon as possible thereafter. However, in certain states a homestead will protect up to a set amount of your equity in your home provided that it is recorded with the County Recorder at any time before proceedings are instituted to cause the forced sale of your home to satisfy a judgment. So, even after a judgment has been entered against you, you should record a homestead declaration. This may vary from state to state, so check our “Homestead Laws” to see if your state allows this action by you.

How do I file a homestead declaration?

You can download the form you need (couples or single) on this site. After the necessary information has been filled in, the person or persons who will sign the homestead declaration must sign it in the presence of a Notary Public, who will notarize the signature's. Finally, the notarized Homestead Declaration must be filed with the Court Recorder in the county in which the property is located. There is usually a small fee for notarization of the document and for the recording with the document.
 

If I buy your simple, easy and inexpensive form on line, will it be as good as the others I see who charge more?
 
A Homestead Declaration when properly prepared and recorded with the court is just as good if it was given to you or you paid for it. A few states provide the document free for its residents and if you can get it that way, please do so. We established Homestead Declaration Services to provide ONLY one thing to every homeowner in America: An inexpensive, convenient document they could download and complete without a hassle. We think we have done just that.

Can I prepare a homestead declaration myself?

The declaration itself is a simple one-page form. If you follow the proper steps outlined in the instructions provided, particularly in noting the correct legal description of the property and having it notarized and recorded, you should have no difficulty. If you feel unsure or have specific legal problems arising out of a judgment or potential judgment against you, you may wish to consult an attorney

Do I need an attorney to file my Declaration of Homestead?

No! Most homeowners file the Declaration of Homestead without the use of an attorney. But, if you feel it necessary to consult with your attorney, please do so by all means. Homestead Declaration Services only offer information regarding the Declaration of Homestead and the form necessary to obtain such a filing, and in no way and at no time, do we provide or offer legal counsel and/or opinions.  

Why should I file a Homestead Declaration?

The main benefit is that if you voluntarily decide to sell your house, the equity upon sale is protected up to the dollar amount equal to your applicable homestead exemption, for up to six months, for reinvestment in another homestead. For example, if your homestead exemption allows you an exemption, then when you sell your home, your equity from the sale will be protected from judgments in that amount for up to six months.

Let’s say you have a judgment against you but you have NOT recorded a declared homestead and you decide to voluntarily sell your house. First the home loan would get paid  and next to get paid would be the judgment creditor(s). If there is any equity left you will then be in line to receive it. However, if you had recorded a declared homestead, you could protect all of your equity from the voluntary sale of your home and it would be safe for up to six months.

During the six months, you can reinvest your protected proceeds from the sale in another house and file a new declared homestead for that new home. Your protection would run from the date of your original declared homestead. This process does not prevent the judgment lien from attaching to the new home if the judgment lien is also recorded in the county in which the new home is located.

A similar benefit of the declared homestead exists in the case your house is sold at foreclosure sale. If you can't make your monthly mortgage payments, the bank will forecloses on your house. Unless you have declared your homestead, the homestead exemption does not operate to protect some equity from judgment creditors in the event of a foreclosure sale. Thus if there is a judgment lien against your home, at a foreclosure sale, the judgment lien will get paid before you. However, if you record a homestead declaration before the judgment lien is created, then your equity will be protected through the foreclosure sale up to the applicable exemption amount for up to six months.