Florida’s Homestead Exemptions

Florida’s Homestead Exemptions

foreclosed home for bankruptcy in florida

Florida’s homestead exemption is considered to be one of the most generous in the country. Under Florida law, you can exempt an unlimited amount of equity in your home. However, the property may not be larger than one-half of an acre in a municipality or 160 acres elsewhere. Fla. Const. Art. X, §4(a)(1). Also, you must have owned the property for at least 1,215 days prior to filing the bankruptcy case. 11 U.S.C. §522(p)(1). Otherwise, your homestead exemption is limited to $170,350.00.

1st HOUSE EXAMPLE: Your home sits on a ¼ acre lot in Port St. Lucie, FL. The home is worth $200,000. You owe the mortgage company $85,000.00. You purchased your home five years ago. After estimated cost of sale, there is $103,000.00 of equity. All of that equity would be protected in a bankruptcy by the Homestead Exemption.

2nd HOUSE EXAMPLE: Your home sits on 15 acres outside of Stuart in Martin County. The home is worth $300,000.00. You owe your mortgage company $150,000.00. You purchased your home 2 ½ years ago. After estimated costs of sale, there is $132,000.00 of equity. While your homestead exemption is capped by Federal Law to $170,350, that is sufficient to protect the equity in your homestead.

Mobile Homes

The homestead exemption also applies to mobile homes sitting on a rented lot. Fla. Stat. Ann. § 222.05.

Any person owning and occupying any dwelling house, including a mobile home used as a residence…on land not his or her own which he or she may lawfully possess, by lease or otherwise, and claiming such house…as his or her homestead, shall be entitled to the exemption of such house…from levy and sale as aforesaid. Id. 

MOBILE HOME EXAMPLE: You own a mobile home. You live in the mobile home. You pay rent for the lot your mobile home sits on. The mobile home is paid off. The mobile home is worth $25,000.00. After estimated cost of sale, there is $22,500.00 of equity in your home. This equity would be fully protected by the homestead exemption.

Non-Traditional Abodes

The homestead exemption for mobile homes has been applied by some courts to boats, travel trailers, and motor homes. Courts ordinarily look at the following factors when determining whether the homestead exemption applies to non-traditional abode:

1. Debtor’s intent to make it his or her home;
2. Whether debtor has another residence;
3. Whether debtor has continually inhabited the property;
4. Whether debtor maintains at least a possessory right associated with the land; establishing a physical presence; and,
5. Whether the property allows long-term habitation versus mobility.

Boats

A local bankruptcy court concluded that the homestead exemption applied to a houseboat. In re Mead, 255 B.R. 80, 85 (Bankr.S.D.Fla. 2000). The court also said that rather than using the test described above, the better test was “one based on function and use of the dwelling structure, rather than its size, design, utility hookups, or ability to be moved. Homestead protection should be extended to any dwelling house on land that the debtor may lawfully possess, if the debtor resided there on the petition date, and if the debtor had no other residence.” Id. at p. 85.

1st BOAT EXAMPLE: You own a sailboat. The sailboat is worth $60,000.00. The sailboat is paid off. You live on the sailboat. You have no other residence. The sailboat is moored at a dock. You pay rent to the marina. You have utilities hooked up to the sailboat. You receive your mail at the marina. Under the Mead Court’s criteria, the sailboat is protected by the homestead exemption.

2nd BOAT EXAMPLE: You own a sailboat. The sailboat is worth $60,000.00. The sailboat is paid off. You live on the sailboat part-time. You stay at your mother’s house the rest of the time. The sailboat is anchored in the Indian River Lagoon. The sailboat is not attached to any dock. You do not pay rent. Under the Mead Court’s criteria, the sailboat is not protected by the homestead exemption.

Motor Homes

A number of Florida courts have applied the homestead exemption to motor homes. In re Schumacher, 400 B.R. 831 (Bankr.M.D.Fla.2008); In re Yettaw, 316 B.R. 560 (Bankr.M.D.Fla.2004); In re Bubnak, 176 B.R. 601 (Bankr.M.D.Fla.1994); In re Mangano, 158 B.R.532 (Bankr.S.D.Fla.1993). 

The courts have looked at a number of factors in applying the homestead exemption to a motor home. 

1. Purchased the motor home with the intent to use it as a residence;
2. Used most of their assets to purchase it;
3. Moved all of their property into the motor home;
4. Only drove the motor home once – from the dealership to the recreational park;
5. Motor home was placed on blocks and hooked up to utilities;
6. Motor home was debtors’ sole residence;
7. Motor home was no longer in operating condition;
8. Motor home no longer had a valid license and registration;
9. Debtors had a possessory right to the lot on which the motor home was parked; and,
10. Motor home was set up for long-term habitation.

1st MOTOR HOME EXAMPE: Motor home was purchased with the intent to use as debtor’s home. Debtor used most of his property to make the purchase. Debtor has no other residence. Debtor pays rent for the lot on which the motor home was parked. Debtor has utilities hooked up. Debtor has the motor home set up for long-term habitation. Debtor had not moved the motor home since moving it to the motor home park. The motor home contains all of debtor’s property. The homestead exemption would apply to the motor home per the Schumacher court’s holding.

2nd MOTOR HOME EXAMPLE: Motor home was purchased with the intent to use as debtor’s home. Debtor used most of his property to make the purchase. Debtor has no other residence. Debtor pays rent for the lot on which the motor home is parked. Debtor has utilities hooked up. However, Debtor drives the mobile every summer to Michigan where he spends four months of the year. As such, the motor home is not set up for long-term habitation. Debtor has some of his property stored at his sister’s home. Under Schumacher analysis, the homestead exemption would likely not apply. The regular use of the motor home to travel coupled with the absence of long-term habitation at the rented lot likely would disqualify application of the homestead exemption. 

Application of the homestead exemption can become very fact intensive when a non-traditional abode is involved. It is advisable to seek the assistance of an experienced bankruptcy attorney when contemplating bankruptcy. The Law Office of Brent M. Myer, PLLC offers free consultations.

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