How Can Florida Homestead Laws Help You Short Sale with Judgment Liens?

By
Real Estate Broker/Owner with Rulnick Realty, Inc.

Florida homestead judgments

If you are selling your Destin Florida home as a short sale, and get an approval, all is wonderful, right? Not necessarily, especially if there are judgments against you from other creditors filed in the State of Florida.  For example, you may owe $25,000 on a charged-off credit card, have a defaulted car loan, small business loan, or a foreclosure from another property.  In order to sell your short sale home, you would have to get your creditor to release its lien from the property being sold. 

How do you end up with a lien on your Destin property from an unpaid loan, in the first place?  According to the website of Jonathan Alper, Florida Attorney who specializes in asset protection, “ In Florida, a judgment creditor files its judgment with the Florida government in Tallahasseee, and that judgment then becomes a lien on all the debtor's Florida real estate.”

So, what do you do if you have this $25,000 judgment, and it’s getting in the way of closing your Destin short sale?  If you cannot come to terms with the creditor, and your property is your homestead, you may be able to use Florida Statute 222.01 to have them remove their lien.

Florida homestead judgmentsFlorida Statute 222.01, Methods of Setting Apart Homesteads and Exemptions says, in summary:

1.You can exempt your homestead property from forced sale by filing a written Notice of Homestead describing the property and recording it in the circuit court.

 

2. The clerk will mail of copy of your notice to your judgment lienor.

 

3. The creditor has 45 days 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”.  If no action is taken, the judgment will not be considered attached to the homestead property, and the status will remain such for 180 days. So you can complete the sale of your homestead.

 

If the judgment pertains to taxes, assessments, mortgages on the property itself, mechanics liens, or “other obligations” contracted for the real property, you cannot use this Notice of Homestead to remove the lien.

 

Florida has a great protection for owners of homestead property.  If you are in a short sale situation, and need to apply the Notice of Homestead to remove a judgment, please consult with a Florida attorney and a Destin short sale specialist.

 

It's Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.

Call toll-free 1-877-487-9639 or local 850-650-7883 ext 204

Email Wendy: itswendy@rulnickrealty.com

Destin FL Real Estate

Destin Short Sales & Pre Foreclosure Help.

Read Wendy's Destin Real Estate Blog

Wendy is a short sale and pre-foreclosure specialist and has been featured in "Kiplinger Personal Finance Magazine" and "Florida Realtor Magazine". Call Wendy Rulnick, Broker/Owner, to list and sell your home or condo on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County-  Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. 

Posted by

"It's Wendy... It's Sold!"

Wendy Rulnick, Broker/Owner Rulnick Realty, Inc.

Call Wendy Rulnick 1-850-650-7883 ext 204

email itswendy@rulnickrealty.com

www.rulnickrealty.com property searches and community info

 

Wendy Rulnick is the marketing choice for sellers on the Emerald Coast who want to list and get their homes and condos sold in Destin, Sandestin, Bluewater Bay, Santa Rosa Beach, 30-A, Watercolor, Seaside, Rosemary Beach, Seacrest Beach, Kelly Plantation, Regatta Bay, Destiny and more.

Rulnick Realty

 

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Gabe Sanders 06/27/2011 12:06 AM
Topic:
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Groups:
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Tags:
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Rainmaker
827,601
Kay Van Kampen
RE/MAX Broker, RE/MAX Solutions - Springfield, MO
Realtor®, Springfield Mo Real Estate

Great information for sellers in Florida.  Removing liens are sometimes not easy.

Jun 20, 2011 02:06 PM #1
Rainmaker
592,421
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

Great subject!

Sounds a bit familiar.

Keep up the good work, Wendy!

Bill

Jun 20, 2011 03:57 PM #2
Rainmaker
494,485
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Kay - I think it's a little used method in Florida.

Bill - I don't know if they have similar laws in other states.

Jun 21, 2011 01:25 AM #3
Rainmaker
434,213
Dick and Dixie Sells
Sells Real Estate, LLC - Trinity, FL
Realtors, Tampa Bay Florida Homes For Sale

Great information, Wendy on our Florida Homestead laws. It might come in handy one day so I am filing this one away in our bag of tips and tricks.

 

Jun 21, 2011 01:31 AM #4
Rainmaker
1,137,891
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Good stuff Wendy. I was just reading an article about this yesterday. Florida homestead law is a good thing.

Jun 21, 2011 01:53 AM #5
Rainmaker
494,485
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Dick and Dixie - Thanks.  I have to add my crack title agent and one of my sharp sellers clued me into this.

Bryant - I think this will come in handy often!

Jun 21, 2011 01:59 AM #6
Ambassador
1,227,465
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

That is really great information for your FLorida home sellers--good idea for a post.

Jun 21, 2011 02:16 AM #7
Rainmaker
592,421
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

Wendy,

I'm hurt! 8>(

You didn't read Murder Short Sales And Real Estate

Most states have some form of "Homesteading" with varying degrees of protection.

Every home buyer should "Homestead" at the time of purchase or today if they didn't.

More relevant if a home owner is in trouble, before it becomes public knowledge and all their creditors want additional security they should "Homestead!"

"Homesteading" even just before listing as a short sale stops last minite nuisance* stoppers from blocking your short sale.

If the home is still owner occupied Homestead it!

Some day I'll tell you the story of a $500.00 les pendance filed the day before closing stopped a $50,000,000.00!

Bill

Jun 21, 2011 03:39 AM #8
Rainmaker
494,485
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"
Melissa - Thank you. I think it will help if the seller has continuously lived in the property until filing of the notice, which is what the statute says, but I am not an attorney. They might know ways around that. Bill - I read your post, great work! I am sure your story should end up in an article one day?
Jun 21, 2011 11:53 AM #9
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Rainmaker
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