Great Blog from local Buyer Broker Claudette Miller. This is the best $35 you can spend and if you are not offered a Declaration of Homestead at your closing you need to ASK. Here is the link to Claudette's original article to leave comments and ask questions http://alturl.com/voqvh . Thanks Claudette for the great blog and update!
Protecting Your Home with the Massachusetts Homestead Act
Protecting Your Home with the Massachusetts Homestead Act
In your quest for the perfect home you have taken all of the appropriate steps so far, including:
- Property search and home visits.
- Comparative market analysis to arrive at an appropriate value.
- Due diligence regarding the neighborhood and zoning.
- Negotiating to get the best price.
- A home inspection to assure you of its structural soundness.
In Massachusetts, there is one more item to add to your list. It's called a "Declaration of Homestead."
What is a Declaration of Homestead?
Massachusetts home buyers have a valuable mechanism that is available to them to protect their home purchase. According to Massachusetts General Laws, you have a right to file for protection of your property equity under The Homestead Act. This allows you protection of up to five hundred thousand dollars ($500,000) of the value of your residence against attachment, seizure or execution or judgment from unsecured creditors.
To qualify, the property must be your principal residence. Exemptions to the Homestead protection are: debts for taxes, mortgages used to purchase the home, debts incurred prior to signing the homestead, and debts from the court pursuing child support payments.
This protection is signficant. If you have filed a Declaration of Homestead and you happen to be in automobile accident with insufficient insurance to cover your home, you will not be exposed to the extent of $500,000. It also protects you in the case of dog bites, drowning in pools, slips and falls and professional liabilities. While it is not substitute for home insurance, the Homestead protection is effective after any liability insurance is used to pay for any judgments that are related to a particular incident.
You may file for protection whether you are a sole owner, joint tenant, and tenant by the entirety or tenant in common, and the original act stated that only one owner of a home or one family was eligible for protection on your residence. The word "family" would include a parent and a child or children, a husband and wife and their children or a sole owner.
Home owners who are 62 years of age or older and persons who are disabled are protected to the extent of $500,000 each. Therefore, if two disabled persons or persons above the age of 62 reside in the same home, they should each file a Declaration of Homestead.
Updates to the Massachusetts Homestead Protection Act
As of March of this year, the following updates have been added to the Homestead Protection Act:
- There is an automatic protection of up to $125,000 in home equity without filing.
- The act allows both spouses to file - previously only one could file.
- The new rules clarify that there is no need to re-file after refinancing.
- It also provides coverage for homes that are kept in trusts.
At your closing your attorney will provide you with the necessary paperwork to file for Homestead Protection. The fee for filing is a mere thirty-five dollars ($35.)
For the all of the protection it affords you, a Declaration of Homestead is clearly a bargain.
"Protecting Your Home with the Massachusetts Homestead Act"
This post was written by
Claudette Millette, Broker, Owner, The Buyers' Counsel - (508) 881-6230
An Exclusive Buyer Brokerage serving the Greater Metrowest area
MLS Property Search With No Registration Required
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