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, there are a number of rules which must be satisfied in order to claim the unlimited protection.
DOMICILED IN FLORIDA FOR 2 YEARS
First, you must have resided in Florida for two years prior to filing your bankruptcy case in order to use the Florida exemptions. 11 U.S.C. §522(b)(3). If you did not reside in Florida for two years prior to filing bankruptcy, then you must use the exemptions of the State in which you lived for the majority of the 180-day period immediately preceeding the two-year period.
EXAMPLE: You were born and raised in New York. You moved from New York to Florida on January 1, 2018. You filed bankruptcy on August 1, 2019. You did not live in Florida for two years prior to filing bankruptcy, so Florida exemptions do not apply. But you lived in New York for the majority of the 180-day period immediately preceeding the two-year period (August 1, 2017 to August 1, 2019). So you may choose between New York and Federal bankruptcy exemptions. You may choose under these circumstances because New York law allows Debtors to choose between its exemptions and Federal exemptions.
FORUM-SHOPPING CAP ON HOMESTEAD EXEMPTION
You also must have owned the home for at least 1,215 days prior to filing the bankruptcy. 11 U.S.C. §522(p)(1). Otherwise, your Florida homestead exemption is capped at $170,350.00.
EXAMPLE: Your home sits on a ¼ acre lot in Tampa, 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.
ACREAGE LIMITATIONS
The home may not be larger than one-half of an acre if located in a municipality and not more than 160 acres located outside of municipality. Fla. Const. Art. X, §4(a)(1).
EXAMPLE: Your home sits on 15 acres in Pasco 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.
RESIDENCE OF THE FAMILY
You must reside at the home in order to use the Florida homestead exemption. Fla. Const. Art. X, §4(a)(1). However, the Florida homestead exemption also applies to a home at which your “family” resides. Id. As such, the Florida homestead exemption applies even when you do not live at the home provided your family resides there. And, you must have a legal obligation to support the individual residing in the home in order for the individual to qualify as a part of the “family.”
FLORIDA HOMESTEAD EXEMPTION FOR MOBILE HOMES
There is a separate Florida homestead exemption which 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.
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 Florida 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:
- Debtor’s intent to make it his or her home;
- Whether debtor has another residence;
- Whether debtor has continually inhabited the property;
- Whether debtor maintains at least a possessory right associated with the land; establishing a physical presence; and,
- Whether the property allows long-term habitation versus mobility.
BOATS AND VESSELS
A Florida 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.
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.
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 on the Coatee River. 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 bankruptcy courts in Florida 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.
- Purchased the motor home with the intent to use it as a residence;
- Used most of their assets to purchase it;
- Moved all of their property into the motor home;
- Only drove the motor home once – from the dealership to the recreational park;
- Motor home was placed on blocks and hooked up to utilities;
- Motor home was debtors’ sole residence;
- Motor home was no longer in operating condition;
- Motor home no longer had a valid license and registration;
- Debtors had a possessory right to the lot on which the motor home was parked; and,
- Motor home was set up for long-term habitation.
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 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.
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.
PROCEEDS FROM SALE OF HOMESTEAD
The proceeds from the sale of an exempt Florida homestead can be used to purchase another homestead provided you satisfy the following rules.
- Have good faith intent to reinvest in a new homestead;
- Does not commingle the sale proceeds with other money; and,
- Reinvests the proceeds in a new homestead within a “reasonable” time.
CONCLUSION
Application of the Florida homestead exemption can become very complicated. 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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