For Santa Clarita first time home buyers it is a very exciting time, you have just finished escrow and are all moved in. Now the mail starts coming and you notice letters that appear to be from government agencies telling you that you need someone to help you to file a Declaration of Homestead. Your asking yourself 1. what is a Declaration of Homestead? and 2. there are more fees? I thought I was done with all the fees associated with buying a house in escrow! I believe in education, the more you know the better you can make an informed decision. So what is a Homestead and what does it Do?
A Homestead helps to protect you from losing your house to people you owe money. If you are sued for money in court and lose, the person who sued you will receive a judgment from the court. If you do not pay the judgment, they can try to collect the money you owe by garnishing
your wages or bank accounts, or by having your automobile or home sold to pay the debt. The Homestead law protects a certain amount of the value of your home from being taken to pay the judgment. There are 2 kinds of Homestead Exemptions: one is automatic and the other is declared.
Automatic Homesteads
Every homeowner has an automatic Homestead Exemption of at least $50,000 for his or her residence. This protection does not require the signing or filing of any papers or documents. The amount of the Exemption increases to $75,000 if at least one member of the family unit living in the house owns no interest in the house, as, for example, when a homeowner lives with his or her minor children. If a homeowner is 65 years or older, or is physically or mentally disabled, the amount of the Exemption is $125,000. The $125,000 Exemption also applies to persons 55 years of age and older if the person is (1) single and has a gross annual income of not more than $15,000, or (2) married and the individual and his/her spouse have a combined annual income of less than $20,000, and the sale is involuntary.
Declared Homestead Exemption
The homeowner can have a Declared Homestead Exemption as well as filing a Homestead Declaration form with the County Recorder in the county where the house is located. It is important to note that the amount of the Exemption does not change or increase when a Homestead Declaration is filed. A Declared Homestead offers extra protection in that it is not automatically lost when a homeowner moves. It will also protect proceeds of the sale exempted by the Homestead from creditors for six months after the house is sold, even if the homeowner voluntarily sold the house.
How Do I File A Declared Homestead?
It is easy to file a Declared Homestead by yourself. You do not need to pay someone to do it for you. Simply buy a Homestead Declaration form from an office supply store that carries legal forms. To fill out the form all you need is your name, the name of the co-owner, if any, and the legal description of the property, which can be found on your deed. Sign the form and have it notarized. Take or mail the form to the County Recorder’s office along with the required recording fees. What A Homestead Does Not Do A Homestead does not protect against the forced sale of a house by a bank, savings and loan or other lender holding a mortgage Deed of Trust on the home, or against the enforcement of a valid mechanic’s lien, or a judgment for child support or spousal support. Warning!
Homestead Filing Services
Many homeowners, especially those who have just purchased a home, receive mail from Homestead filing services. The letters often look like they are a government office and lead you to believe that you must file a Declared Homestead. Don’t be fooled. The law prohibits Homestead- filing agencies from making false or misleading statements or presenting themselves as a government agency. The law also prohibits them from charging more than $25 to file a Homestead Declaration or from collecting any fees until after they have recorded a Homestead Declaration.
Content derived from Los Angeles County Department of Consumer Affairs website, as a homeowner verify all information.
