Do Liens Transfer to A New Homestead?
A few weeks ago I received an email inquiry about the effect of a judgment lien on the writer's ability to sell their homestead and buy a new homestead. The writer was concerned that a money judgment would prevent him from selling his homestead and buying a new homestead. The writer wanted to know if the lien would transfer to the new homestead. The answer is "no" for several reasons.
In the first place, a money judgment should not be a lien on the homestead. Sometimes by mistake a title search on the homestead will pick up a prior money judgment as all judgments recorded are a lien on all the debtor's property, subject to homestead exemption. Before the writer even considers the transfer of sale proceeds to a new homestead, the current home could not be sold unless the lien is removed. There are procedures in the Florida statutes to assert homestead exemption to clear liens when the owner is trying to sell or refinance a homestead property. This procedure will be necessary to provide title insurance to the buyer and his mortgage lender. The lien will be released prior to the sale as homestead is asserted, and there will be no lien to "transfer" to a new residence.
posted by Jonathan Alper, asset protection and estate planning attorney, Orlando, Florida
