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Can You Sell Your Home If You Have A Judgment Against You?

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Can You Sell Your Home in Florida If You Have A Judgment Against You?

Helping Clients with Real Estate Matters Since 1994

The purpose of the homestead exemption in Florida is to protect the family and enable the owner of the homestead to sell the property if necessary to meet financial needs. A property’s status as exempt homestead property is established by the owner’s actual intention to live permanently on the property, coupled with actual use and occupancy of the property.  In those situations where the owner has a judgment against him/her, Florida Statute 222.01(2) provides a procedure that prevents the lien from attaching to the homestead allowing the homeowner to sell or refinance the home.

According to the statute, the property owner (who has to be a natural person and not a corporation or LLC) sends a notice to the judgment creditor(s) claiming the property to be protected using the homestead exemption. The creditor then has 45 days after receipt of the notice to contest the claim of homestead. If the creditor cannot prove the property is not the debtor’s homestead then the lien does not attach to the homestead and the house can be sold or refinanced. This procedure cannot be used to remove certain liens that are not protected by the homestead law such as liens for taxes and municipal assessments, liens for labor, services or materials to repair or improve the homestead.

Read: Shared (Joint) Ownership Can Be a Big Problem If a Creditor Stakes a Claim Against Your Real Estate

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READ THE LAW | FLORIDA STATUTE: CHAPTER 222.01 (2019) – METHOD OF SETTING APART HOMESTEAD

Florida Statute Relating to a Homestead and Exemptions (Which includes a form Notice of Homestead):

222.01 Designation of homestead by owner before levy.—

(1) Whenever any natural person residing in this state desires to avail himself or herself of the benefit of the provisions of the constitution and laws exempting property as a homestead from forced sale under any process of law, he or she may make a statement, in writing, containing a description of the real property, mobile home, or modular home claimed to be exempt and declaring that the real property, mobile home, or modular home is the homestead of the party in whose behalf such claim is being made. Such statement shall be signed by the person making it and shall be recorded in the circuit court.

(2) When a certified copy of a judgment has been filed in the public records of a county pursuant to chapter 55, 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 may file a notice of homestead in the public records of the county in which the homestead property is located in substantially the following form:

NOTICE OF HOMESTEAD

To:  (Name and address of judgment creditor as shown on recorded judgment and name and address of any other person shown in the recorded judgment to receive a copy of the Notice of Homestead).  

You are notified that the undersigned claims as homestead exempt from levy and execution under Section 4, Article X of the State Constitution, the following described property:

(Legal description)  

The undersigned certifies, under oath, that he or she has applied for and received the homestead tax exemption as to the above-described property, that   is the tax identification parcel number of this property, and that the undersigned has resided on this property continuously and uninterruptedly from   (date)   to the date of this Notice of Homestead. Further, the undersigned will either convey or mortgage the above-described property pursuant to the following:

(Describe the contract of sale or loan commitment by date, names of parties, date of anticipated closing, and amount. The name, address, and telephone number of the person conducting the anticipated closing must be set forth.)  

The undersigned also certifies, under oath, that the judgment lien filed by you on   (date)   and recorded in Official Records Book XXX, Page XXX, of the Public Records of XXX County, Florida, does not constitute a valid lien on the described property.

YOU ARE FURTHER NOTIFIED, PURSUANT TO SECTION 222.01 ET SEQ., FLORIDA STATUTES, THAT WITHIN 45 DAYS AFTER THE MAILING OF THIS NOTICE YOU MUST FILE AN ACTION IN THE CIRCUIT COURT OF    COUNTY, FLORIDA, FOR A DECLARATORY JUDGMENT TO DETERMINE THE CONSTITUTIONAL HOMESTEAD STATUS OF THE SUBJECT PROPERTY OR TO FORECLOSE YOUR JUDGMENT LIEN ON THE PROPERTY AND RECORD A LIS PENDENS IN THE PUBLIC RECORDS OF THE COUNTY WHERE THE HOMESTEAD IS LOCATED. YOUR FAILURE TO SO ACT WILL RESULT IN ANY BUYER OR LENDER, OR HIS OR HER SUCCESSORS AND ASSIGNS, UNDER THE ABOVE-DESCRIBED CONTRACT OF SALE OR LOAN COMMITMENT TO TAKE FREE AND CLEAR OF ANY JUDGMENT LIEN YOU MAY HAVE ON THE PROPERTY.

This XX day of XXX, 20XX.

(Signature of Owner)  

(Printed Name of Owner)  

(Owner’s Address)  

Sworn to and subscribed before me by XXXX who is personally known to me or produced XXXXXX  as identification, this XX day of XXXXX, 20XX.

Signature of Notary Public

(3) The clerk shall mail a copy of the notice of homestead to the judgment lienor, by certified mail, return receipt requested, at the address shown in the most recent recorded judgment or accompanying affidavit, and to any other person designated in the most recent recorded judgment or accompanying affidavit to receive the notice of homestead, and shall certify to such service on the face of such notice and record the notice. Notwithstanding the use of certified mail, return receipt requested, service shall be deemed complete upon mailing.
(4) A lien pursuant to chapter 55 of any lienor upon whom such notice is served, who fails to institute an 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. This subsection shall not act to prohibit a lien from attaching to the real property described in the notice of homestead at such time as the property loses its homestead status.

(5) As provided in s. 4, Art. X of the State Constitution, this subsection shall not apply to:

(a) Liens and judgments for the payment of taxes and assessments on real property.
(b) Liens and judgments for obligations contracted for the purchase of real property.
(c) Liens and judgments for labor, services, or materials furnished to repair or improve real property.
(d) Liens and judgments for other obligations contracted for house, field, or other labor performed on real property.