What does a Homestead Exemption Protect Property from in Florida?
In Florida, the homestead exemption does not have a property value limit. Having a homestead in Florida conveys numerous tax benefits on their owners. Therefore, many move to Florida from other states in order to receive those tax benefits as well as to protect their homestead property from forced sales. In Florida, your homestead property is protected from forced sale in cases of bankruptcy of the property owner as well as in certain litigation cases, when the court may place judgment liens on other non-exempt and non-homestead property of the losing party. However, sometimes a foreclosure on a homestead property can be different.
Does Homestead Exemption Protect from Foreclosure in Florida?
According to Article X, Section 4 of the Florida Constitution, homestead properties “. . . shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person”. In other words, homestead properties are protected from foreclosure in Florida, except in cases of satisfying tax debt or debt owed to an unpaid contractor working on that property. Homestead exemptions do not protect homestead property from foreclosure, if the property owners have taken out loans or a mortgage, used the homestead property as collateral and subsequently defaulted on those loans or the mortgage.
Therefore, even though your homestead property is protected from creditors, it is not protected from enforcement of liens that the property owner voluntarily placed on the property in cases when the property is used to secure debt. In other words, creditors in Florida may not sell an individual’s home in order to satisfy a debt. But a property can be foreclosed upon when the lien placed on the homestead property was made voluntarily by the property owner.
What is the Foreclosure Process in Florida?
In Florida, before foreclosing on a property, the creditor has to file a suit in state court. Subsequently, the debtor is served with the complaint and then has to defend the lawsuit. If he loses, the debtor will have a judgment of foreclosure entered against him by the court. Additionally, according to Fla. Stat. § 702.10, any holder of the lien against the debtor, can request to have their complaint go through an expedited process instead of the usual court proceeding in cases when the debtor does not have a real defense, or the case is uncontested.
A new law signed in 2013 makes foreclosure judgments final in Florida. Today, the only remedy the property owner has against foreclosures is pursuing the creditor for monetary damages. It is worth pointing out that, according to the new law, the creditor has an obligation to provide the promissory note to the court.