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Is Florida Really a Sunny Place for Shady People?

We have all seen the news report, it usually goes something like this, a wealthy individual from the northeast has creditors crawling out of the woodwork to collect on large sums of money. The wealthy individual has a multimillion dollar waterfront residence in Boca Raton which the creditors cannot get to. The person may owe millions of dollars to these entities, however, if the person dotted their I’s and crossed their T’s with respect to establishing homestead in Florida there is very little that creditors can do. The news report almost always shows a picture of the beautifully maintained residence at the end, leaving viewers to think. How is this fair? How is this crook able to live in their multimillion dollar residence and go about their happy life despite the fact that they owe creditors all over money? Is Florida really a sunny place for shady people? Well, the simple response to this is the Florida Constitution provides for this exact scenario. Florida was the fourth state in the union to have some sort of homestead protection to debtors. In 1868, Florida’s first constitution provided exemptions from creditors’ claims for up to 160 rural acres and up to a half acre within a city owned by a debtor.

Subsections 4(a) and (b) of Article X of the Florida Constitution provide, that there shall be exempt from forced sale 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 a house, field or other labor performed on the reality…In order to qualify for a homestead, the residence must be the individuals’ primary residence and the residence can be up to one hundred and sixty acres of contiguous land if the homestead is located outside of a municipality and up to one-half acre if the residence is located inside of a municipality.

The purpose of Florida’s homestead creditors exemption was clearly set forth by the Florida Supreme Court in 1875 when the Court stated the following “[t]he object of exemption laws is to protect people of limited means and their families in the enjoyment of so much property as may be necessary to prevent absolute pauperism and wan, and against the consequences of ill-advised promises…” Carters Administrators v. Carter, 20 Fla. 558, 569 (1875). Accordingly, the central purpose of Florida’s homestead creditors’ claim exemption is to prevent poverty and protect debtors from their own poor decisions.

The Florida Constitution does not distinguish between different types of ownership interests or property that qualify for the homestead exemption. Bessemer Properties v. Gamble, 27 So.2d 832 (Fla. 1946); Milton v. Milton, 58 So. 718 (Fla. 912); and Southern Walls, Inc. v. Stilwell Corp., 810 So.2d 566 (Fla. 5th DCA 2002). The following types of property and property interests have qualified for the homestead protection in Florida: single family residence; condominium, mobile home; life estates; leasehold interests; partial interest in property; and trusts.

Additionally, insurance proceeds from a casualty loss are protected. Quiroga v. Citizens Property Insurance Corp., 34 So.3 rd 101 (Fla. 3 DCA 2010). As well as the sale proceeds from the sale of a homestead residence are exempt from creditors claims if the seller does not commingle the monies and the seller intends in good faith to re-invest the monies in another homestead residence in a reasonable amount of time. Kerzner v. Kerzner, 36 FLW D2608b (Fla. 3 DCA 2011).

There are some creditors’ claims that will not be exempt due to the homestead exemption. The Florida Constitution provides that the homestead creditors exemption shall not be applicable to the following claims:

  • Liens and judgments for the payment of taxes and assessments on real property. This includes taxes and assessments assessed by state and local municipalities.

  • Liens and judgments for obligations contracted for the purchase of real property. This obviously includes purchase money mortgages.

  • Liens and judgments for labor, services, or materials furnished to repair or improve real property. Mechanics liens for labor materials and services are rendered to a homestead residence are not exempt from Florida’s homestead exemption. However, it is worth noting that the lienor must perfect their lien rights under Ch. 713, Fla. Stat., in order to foreclose upon a homestead residence.

  • Liens and judgments for other obligations contracted for house, field, or other labor performed on the real property. This includes condominium and homeowner association fees.

Florida’s Constitution has always provided for homestead creditors’ exemptions, while the initial reasoning was to protect the poverty and protect debtors from their own poor decisions. Today, Florida has undoubtedly become a sunny place for shady people, debtors can bask in the sun in their multi-million dollar water-front residences while creditors are scrambling to see if there are any other assets that they can levy.

Sweeney Law, P.A. Regularly Represents Individuals in Protecting Their Homestead Residence from Creditors

Brendan A. Sweeney, Esq., of Sweeney Law, P.A., The Florida Debt Warrior, regularly represents individuals that are seeking to protect their assets from creditors. Brendan A. Sweeney, Esq., has been recognized as a Florida Legal Elite Rising Star Attorney in Consumer Law in 2014, 2015, 2016 and 2017, and is a member of the National Association of Consumer Advocates. If you have creditors seeking to levy upon your assets then please contact Sweeney Law, P.A. at 954.440.3993 immediately to protect your rights. www.sweeneylawpa.com

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