Following a rough divorce up north a man sails his sailboat to Florida, docks the boat, and thereafter lives on the boat . He registers the dock address as his primary residence on his drivers license and in other government registrations. The man wants to know if his boat is protected as a Florida homestead similar to protection afforded mobile homes.
From time to time I get asked whether a homeowners association or a contractor can lien a Florida homestead. The answer is "yes." There are several exceptions to the protection against creditors' liens on your Florida homestead. Mechanics liens are an exception in the Florida constitution. If someone works to build or repair your home, or if a company provides materials for the construction or repair of your home, they are entitled to a lien on the homestead to secure payment. Homeowner Associations acquire a consensual lien similar to a mortgage. An HOA can foreclose its lien under the provisions of a new HOA Act effective July, 2007. A homeowner may lose his homestead if he does not pay HOA dues or does not pay for the construction or repair of his property.
Hank Evans, Esq. is one of the smartest real estate attorneys I ever met. Hank has been practicing real estate law for 35 years in Titusville, Florida, where he represents several banks and many large real estate developers. He called me recently to ask me an asset protection question, and I used the opportunity to ask Hank Evans about his experience with mortgage deficiency judgments during the real estate and credit recession. I expected that Hank would be an excellent source of information about bank's practices with regard to foreclosure and deficiency claims.
Continue Reading...Several of my clients who formed Nevis LLCs have told me that they have had difficulty opening bank accounts in the name of their LLC. Different banks have different obstacles. Common bank demands include registering the Nevis LLC as a foreign entity with Florida's Division of Corporations and getting a tax identification number even though the IRS does not recognize a single member LLC for tax purposes. Some other clients told me that they have opened financial accounts for Nevis LLCs through their stock broker and that these financial firms are much more accommodating. I am going to ask other asset protection attorneys for their recommendations of Florida banks who accept Nevis LLC accounts. I will post recommendations at a future time. Bank recommendations from a blog reader will be appreciated.
I often get calls or emails from people who are concerned about protecting their parents assets because their last surviving parent is being moved to an assisted living facility or nursing home. People are concerned primarily about their parents' homestead. Many elderly people own their homestead properties free and clear. The question is often whether the nursing home or medical providers can levy upon the homestead to collect medical debts after their parents move from the home.
Once again I address the issue of whether a debtor's asset, not exempt where he currently resides, becomes exempt by virtue of Florida residency. Or, if an asset is not exempt in another state can it become exempt by a debtor moving to Florida? In answering this question for a client I came upon an old bankruptcy case where an Arizona resident owned an annuity comprising lottery winning. This debtor encountered financial problems, moved to Florida, and filed bankruptcy shortly thereafter. The issue was whether the annuity issued in Arizona was exempt in the Florida bankruptcy.
I frequently hear from clients that they purchase a car with money borrowed from a parent, and that they hold title free and clear of all liens. When I explain that their creditors can get at their car even though they feel they owe their parents money they often propose that they now put a lien on the car in favor of their parents. Placing a lien on a car a significant time after the purchase can be deemed a fraudulent conveyance, and in bankruptcy, it could be reversed as a preferential repayment of a loan to an insider. If you are going to borrow money from a family member there are ways to make the transaction defensible against future creditor attack.
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