Homestead Protection Of Small Interest In Lake Access Property
The protected Florida homestead includes up to 160 acres of contiguous property. Consider a debtor who owns several parcels with separate legal descriptions. The parcels can be divided and sold separately. All the parcels are geographically touching, or contiguous. The debtor owns and resides in a house on just on of the several parcels. In that case, all of the debtor’s land is protected by his homestead exemption.
Last week a client described his ownership of a half acre lot on which he resided. In front of his house runs a street which is owned by his homeowners community. Across the street is a vacant lot adjoining a lake. The lake is owned by 10 people as tenants in common. Each of the ten owners is entitled to use the vacant lot for lake access only. The deed to the access lot provides that none of the owners can sell, assign, or encumber their 1/10 interest without also selling their home. The client wants to know if his interest in the lake access lot is protected as homestead.
This arrangement is unusual. In most cases such as this the HOA would own the lake access lot and each of the 10 homeowners would have an easement. In this arrangement, I do not believe the client’s 1/10 interest as tenants in common is exempt under his homestead protection because the access lot is not truly contiguous. However, a court could rule that it is “practically contingent.” Academically, I think his interest is protected because a creditor could not recover money from a levy on the debtor’s access interest. The 1/10 interest has no value to anyone other than one of the 10 homeowners.
Just to be sure, if the client sells this house he might include in the sales contract an allocation of a very small amount of the sales price to the lake access lot in the event a title company believed that a judgment lien attached to the separate lot. As a practical matter, the lake access interest is not protected as homestead but is protected by deed restriction.
With regard to homestead protection for a landowner, what about where a landowner owns 160 acres or less (let's say 100 acres for example)and he and his wife own a home on the 100 acres. The majority of the property (95 acres) is used for agricultural purposes and their home, workshop, barn is located on the remaining 5 acres. For estate planning purposes, the proeprty was split up into three parcels: 55 acres, 45 acres, and the 5 acres containing the home. The 60 acres is titled only in wife's name, 40 acres in only husband's name, and 5 acres in both names. As currently titled, will the 5 acres be the only part of the 100 acres to receive the protections of the Florida homestead laws?