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Unformatted text preview: . Amount of Protection – The home is protected against seizure and sale as long as the owner's equity does not exceed the allowed exemption of: • • • $30,000 for any person, except $45,000 for a member of a “family unit” $75,000 if the homestead declarant or the declarant's spouse is 65 years of age or older, or physically or mentally disabled and thus unable to work, and this is so stated in the declaration, or if the declarant is 55 years of age or older with a gross annual income of not more than $15,000 ($20,000 per year for a married couple). The proceeds from a forced or voluntary sale of a homestead must be reinvested in another home within 6 months, or proceeds are available to claims remaining after sale. CLAIMING THE EXEMPTION
The declarant must record the homestead in the county where the property is located. Effects – A recorded declaration of homestead: • Will be valid against eligible debts if recorded any time prior to the recording of the unsecured creditor's judgment. Dynasty School (www.dynastySchool.com) 5-51 REAL ESTATE FINANCE
• May be declared by either spouse on community, joint tenancy, or tenancy in common property, but not on separate property of the other spouse in which declarant has no ownership interest. Is not an encumbrance. • Required Information – Declarant must state the following. Any false statement invalidates a homestead. • • • • • Claimant is “head of family,” if such is the fact If married, name of spouse Whether 65 years of age (to obtain higher exemption amount) Resides on premises claimed as a homestead Description of premises Termination – A homestead is ended by three methods only: • • • Recording notice of “Abandonment of Homestead” Sale of homestead property Recording of a subsequent “Declaration of Homestead.” FORCED SALE OF A HOMESTEAD
If the owner's equity exceeds the exemption, a court may order the property sold to pay the claims of judgment creditors. Priority of Distribution – Money realized from the forced sale is allocated to outstanding claims in the following order. 1. 2. 3.
5-52 Cost of sale Taxes and assessments Se...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10