SELL OR REFINANCE EVEN IF ENCUMBERED BY A JUDGMENT LIEN BY
FILING A NOTICE OF HOMESTEAD
If you cannot refinance or sell
your property because of a non-secured judgment lien, there is a way to
now do so. Florida Senate Bill 370 has been approved and is now
effective as of June 17, 2005. The bill now encompasses the entire Fla.
statute chapter 55 relating to judgments and liens, rather than just
sec. 55.10 of the statute. This means, in effect, that the entire
judgment laws under chapter 55 of the Fla. Statutes are now covered
under a Notice of Homestead.
When a certified copy of a judgment has been filed in the
public records against a person who is entitled to the benefit of the
provisions of the State Constitution exempting real property as
homestead and who has a contract to sell or a commitment from a lender
for a mortgage on the homestead, they may file a notice in the public
records of the county in which the homestead property is located. This
provision of the law may allow you to sell or refinance your home if
you have a judgment or a lien against you and may allow it to happen
free and clear within 45 days. Be advised you must have a contract to
sell or a commitment from a lender for a mortgage on the homestead
before you may file the notice to the creditor, which is required for
The clerk must mail a certified copy of the Notice of
Homestead to any and all judgment lienors. A lien pursuant to the
judgment lien laws of Florida of any lienor upon whom such notice is
served, who fails to institute a court action for a declaratory
judgment to determine the constitutional homestead status of the
property described in the Notice of Homestead or to file an action to
foreclose the judgment lien, together with the filing of a lis pendens
in the public records of the county in which the homestead is located,
within 45 days after service of such notice shall be deemed as not
attaching to the property by virtue of its status as homestead property
as to the interest of any buyer or lender, or his or her successors or
assigns, who takes under the contract of sale or loan commitment
described above within 180 days after the filing in the public records
of the notice of homestead.
Generally the provisions of the
recent law may be summarized as follows:
a. Applies to a homeowner against whom there is a recorded
money judgment for a debt that would not be enforceable against a
homestead; (i.e., not for taxes, purchase money or improvement of the
b. The owner must have applied for and received the homestead
tax exemption and must have claimed homestead separate and apart from
the tax exemption via a "Designation of Homestead". This may mean a new
owner may not be able to qualify during the year of purchase.
Application for the tax exemption may only be made between January 1
and March 1 of each year, and requires the owner have resided on the
premises on January 1st.
c. If the exemption has been received, and the claim or
"Designation of Homestead" has been made, the owner may then file the
Notice of Homestead on the form specified in the statute. The Notice
asserts the validity of the claim of homestead, identifies the judgment
in question, and describes the proposed sale or mortgage then pending.
d. The Notice is filed in the Official Records and the clerk
must send a copy of the Notice to the judgment lienor by certified
mail. The judgment lienor then has 45 days to file a suit for
declaratory judgment contesting the claim of homestead, including a Lis
e. If no such action is filed, the judgment is not
enforceable against the contract buyer or lender if the sale or
mortgage is closed within 180 days of filing the Notice of Homestead.
You can rely upon this procedure to also obtain title
insurance without exception for judgments properly treated under the
statute provided that the following is determined:
1. The homestead tax exemption has been received by the
current owner and a "Designation of Homestead" has been claimed. An
exemption to the predecessor of the current owner would not comply,
even though it will remain valid for the rest of the year.
2. The judgment against which it is applied was not for
taxes, purchase money or improvements (i.e., Contractor's or Mechanic's
lien) as set out in the statute and constitution.
3. The title insurance company must run name searches on the
current owner and the holder of the judgment to determine if an
affidavit of current address has been recorded, and to verify the
Notice of Homestead was sent to the latest available address.
4. No action to contest the claim of homestead, or to
foreclose the mortgage, is filed within 45 days after service of the
5. Closing of the proposed sale or mortgage must be within
180 days of the filing of the Notice. All closings in reliance upon
this procedure must be in escrow until the title insurer has examined
through the recording of the instruments they are to insure.
We realize that many transactions may be delayed long enough
to accomplish this procedure; however, it may not prove to be
beneficial to some. Under Florida
law, homestead exemption
may not be used to shield property from: (1) payment of taxes and
assessments thereon; (2) obligations contracted for the purchase,
improvement or repair thereof; or (3) obligations contracted for house,
field or other labor performed on realty. If you need to
refinance or sell and a judgment lien encumbers your property, contact
us. We also urge everyone who has a lien against them to record a
notice contesting the lien. We can help!
Contact us today
||Income - Wages
of Real Property
Declaration of Homestead
Adjustment Board Appeals
from Forced Sale