I have had several calls within the last two weeks from people about to refinance their house who find that a judgment lien has shown up on their title report as an encumbrance on their homestead. The callers want to know why and how a creditor can place a judgment lien on their homestead which they thought is exempt from creditor liens.
Creditors do not place liens on selected properties. 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. The lien is not selective, but instead is an indiscriminate blanket lien. The state registry of judgments does not distinguish homestead property. The debtor must take affirmative steps to rid his homestead of the blanket judgment lien.
Florida statutes provide a procedure to remove judgment liens from homestead in advance of a sale or refinance. Florida Statute 222.01(2) provides a procedure to send a form notice to the judgment creditors claiming homestead exemption. The creditor 45 days after notice to contest the claim of homestead. If the creditor cannot prove the property is not the debtor’s homestead then the lien is removed and the house can be sold or refinanced. This procedure cannot be used to remove certain liens which are not protected by the homestead law such as liens for taxes and liens for labor or materials to repair or improve the homestead.