This is the second of three (actually four) posts on the different types of homestead in Florida. In my previous post, I discussed descent and distribution — the rules governing how your homestead may and may not be disposed of upon your death.
Today I’m writing about an incredibly important and complicated aspect of homestead: the protection of your homestead from creditor claims. This rule has made Florida a haven for people who owe others large sums of money. It’s not just the golf that brought O.J. Simpson to Miami.
The reason this area is so complicated is that determining whether your homestead is protected depends on a mixture of state and federal law.
As in the previous post, I’ll start with the Florida Constitution. Article X, Section 4 provides:
(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person: (1) a homestead, if located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner’s consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family; (b) These exemptions shall inure to the surviving spouse or heirs of the owner.
In general terms, your homestead is protected from your creditors. If you are sued and a judgment is entered against you, you cannot lose your house to satisfy that judgment.
There is, however, a significant twist I will cover in Part II(B): federal bankruptcy law can override the state homestead exemption.