Legal Question in Real Estate Law in California

Re: Homestead right

Thanks for your question. I think you meant that you need an explanation of California's Homestead Exemption Act. There is also a historical Homestead Act, from the last century, which is interesting in regards to background, but which is superceded by current law.

Here's a comprehensive explanation of the homestead act. (Sit down and get comfortable, this is going to take a while):

California has a bifurcated homestead law. California's Code of Civil Procedure (C.C.P.) �� 704.710 to 704.850 concerns the state's "automatic homestead exemption." C.C.P. �� 704.910 to 704.995 covers the "declared homestead exemption."

The protection provided by the automatic homestead exemption is separate and distinct from the protection afforded by a declared homestead. In re Mulch, 182 B.R. 569 (N.D. Cal. 1995). To use this automatic exemption, there must be a forced sale of the debtor's property.

It must be emphasized that this type of homestead exemption exists is the absence of any recorded homestead declaration. In re Morse, 11 Cal. 4th 184, 900 P.2d 1170, 44 Cal. Rptr.2d 62D (1995); In re Sanford, 8 B.R. 761 (N.D. Cal. 1981); In re Wilson, supra.

The construction of the law applies to declared homesteads as well. See, e.g., In re Jones, 106 F.3d 923 (9th Cir. 1997); In re Shelley, 184 B.R. 356, afl'd, 109 F.3d 639 (B.A.P. 9th Cir. 1995); Haaland v. Corporate Management, Inc., 172 B.R. 74 (S.D. Cal. 1989). A declaration of homestead protects property up to the level of exemption. Tassone v. Toyar, 33 Cal. Rptr.2d 786, 28 Cal. App.4th 765 (1994). The current exemption amounts are:

1) $50,000, unless the judgment debtor or his/her spouse who resides in the homestead is described in paragraph 2 or 3;

2) $75,000, if the judgment debtor or his/her spouse who resides in the homestead is at the time of the attempted sale of the homestead a member of a family unit, and there is at least one member of the family unit who owns no interest in the homestead or whose only interest in the homestead is a community property interest with the judgment debtor;

3) $125,000, if the judgment debtor or his/her spouse is a person 65 years of age or older; or a person physically or mentally disabled and as a result of that disability is unable to engage in substantial gainful employment; or a person 55 years of age or older with a gross annual income of not more than $15,000 if single or $20,000 if married, and the sale is an involuntary sale.

C.C.P. � 704.730. California has different levels of exemptions for different people. However, a declaration of homestead must be made and recorded to gain the benefits of the declared homestead laws. See, e.g., In re Amiri supra; In re Wilson, supra.

I hope that this clears up your questions, and I invite you to call me at 714-568-1560, if you have any further questions.