Legal Question in Real Estate Law in California

Re: Homestead declaration

"Homestead" as used nowadays in California refers to the exemption of a portion of a homeowner's equity from seizure to satisfy debts. There are two kinds of homestead, and neither one provides complete protection. Here are the basics:

First, there is the "automatic" homestead or "dwelling house exemption" which is available without the necessity of any pre-filing by the debtor. Then, there is the "declared homestead" which requires the pre-filing with the county recorder of a declaration of homestead naming the homestead owner, a street address or legal description of the premises covered by the declaration, and a statement that the premises is the principal dwelling of the claimant and that the claimant actually resides there on the date of filing.

The protection afforded by the two is similar and overlapping, but not identical. In general, the amount of exempted (protected) equity is only $50,000, but in certain cases the amount can be $75,000 or $125,000. If you are represented by counsel in the lawsuit against you, ask your attorney which level you qualify for.

Also note that the homestead exemption will not protect equity in excess of the exempted amount, and thus a sale can still be forced to tap any excess equity; also, the exemption affords little if any protection on mortgage loan defaults or other pre-existing liens on the property.