Real Estate Law Chapter 18

Family Homestead amount is $_______.

$100,000 -The debtor must live in the property with his or her spouse or with at least one other person who has no ownership interest in the residence.

Age 65+ or disabled homestead amount is $____

$175,000 -debtor or spouse 65+, or be physically or mentally disabled such that he or she cannot engage in gainful employment -Also covers people 55+ who earn less than $15,000 a year ($20,000 if married)

Regular homestead amount is $______

$75,000

Assume a homeowner has no outstanding debts. Assume that homeowner filed a homestead in 1985, when the amount was $45,000, and never refiled each time the homestead amounts were increased. If this same person were to record a homestead now, the amount would be $75,000. What is the amount of the person's original homestead worth now: A) $75,000 B) $45,000 C) $45,000 plus 2% per year increase from 1985 D) Invalid as homestead must be renewed to remain effective

(A)

If you are single, aged 21, and purchasing you first house, a lower-income home, the amount of your homestead would be: A) $75,000 B) $50,000 C) $100,000 D) $175,000

(A)

If you are single, aged 21, and purchasing your first house using the proceeds of an inheritance, for $2,000,000, all cash, your homestead amount would be: A) $75,000 B) $100,000 C) No homestead when purchasing home over $1,000,000 D) No homestead, since too much equity

(A) The amount is $75,000, a single person's homestead. It is immaterial if your home is your first or your last, or the amount of the purchase price

Which of the following will terminate a homestead? A) Taking a four year vacation B) Moving and living in an apartment, while renting out the house C) Marrying and living in a home with a single person homestead D) All of the above

(B) One of the requirements of a homestead is to live on the homestead property.

If you are wheelchair bound, totally unable to work, and decide to homestead your home that has a mortgage of $200,000 on a house that has a fair market value of $210,000, the amount of your homestead would be: A) $75,000 B) $100,000 C) $175,000 D) No homestead as your property is not worth enough

(C)

The amount of a family homestead, when the husband and wide reside is: A) $50,000 B) $75,000 C) $100,000 D) $175,000

(C)

To be valid, a homestead must: A) Be recorded B) Describe the property C) Both of the above D) Neither (A) nor (B)

(C) A homestead must be recorded to be valid. Further, it must contain a description of the homestead property so that creditors will know which parcel is exempted.

The amount of a homestead for a person aged 77 is: A) $75,000 B) $100,000 C) $175,000 D) $150,000 (amount of two homestead amounts combined)

(C) The amount for a person over age 65 is $175,000. (The same as for a person who is disabled and unable to work.)

Which of the following is true about claiming a homestead on a house? A) Can be claimed by a child if the parents do not claim B) One can be claimed by child, and another one claimed by parents C) Cannot be claimed by a child, only by parents D) Can be claimed by anyone, but only on behalf of the parents

(C) The homestead can only be claimed by either a husband or wife, and then only for their benefit. Children and others have no rights to file on their behalf

Once a homestead is recorded, it generally protects against any future recorded liens, except which of the following liens are always superior to and have priority over even a recorded homestead: A) mechanics liens B) Deeds of trust C) Federal tax liens D) All of the above are always superior to homesteads

(D) All 3 are senior to homesteads, even when recorded years after the homestead

What are the two types of homesteads?

1) Declared Homestead: -created by filing a document declaring the property homestead 2) Dwelling house exemption: -Homeowner files after a creditor tries to sell the property to enforce a judgement. -The creditor must give special notice and opportunity for a homeowner to file a special homestead (called a dwelling house homestead), which has the same effect as a declared homestead.

What is the selling Procedure?

1. At least 140 days must pass between the time the creditor first notifies the homeowner of an intent tot sell (levy on) the home and the time of the actual sale 2. During this time, the homeowner must be served with a document containing specified statutory language that tells the owner that he can still file a homestead and what the effects of not filing a homestead are.

Termination of Homestead:

1. Formal declaration executed and recorded. Declaration of Abandonment. 2. Record a new homestead on a different property

Creation of a homestead must have:

1. Identity of declarant. And age if important 2. State declarant is a resident. law requires declarant lives on premises as principal residence, automatic dwelling house exemption not because people may be divorced 3. Describe property 4. Signed by Declarant

What are 3 exceptions to the previous statement?

1. mechanics liens are always senior to homesteads no matter when filed 2. Deeds of trust signed by husband and wife, or unmarried claimant, are always senior to homesteads no matter the date of creation 3. Federal tax liens are always senior to homesteads no matter the date of creation. NOT STATE BUT FEDERAL

There are ______ different homestead amounts.

3

(T/F) The homestead is limited to houses situated on less than 20 acres and costing not more than twice the cost of an average home in California.

False No dollar or land size limitations

(T/F) An unrecorded mortgage executed by the homeowner in 1995 is junior to a homestead recorded in 1990.

False One of three exceptions to normal priorities

(T/F) If a homeowner, who has homesteaded a house, goes on a two-year vacation, the homestead is abandoned.

False Temporary absence, not abandonment

What is the 90% limitation?

Law requires that a creditor cannot even sell the home without obtaining a bid for the home that is equal to the greater of (1) 90% of the homes fair market value as determined by the court before the sale (2) an amount over and above all liens and encumbrances on the property and the homestead amount

What is a homestead?

The homestead protects a portion of a debtor's family home from creditors. It is designed to keep them from a force sale

(T/F) Once recorded, homesteads are generally senior to all subsequently recorded judgments, liens, and encumbrances.

True

(T/F) The homestead exemption provides an equity protection over and above all liens, regardless of the value of the home

True

(T/F) The amount of a homestead for a retired man, age 70, living alone, is $175,000.

True $175,000 for age 65 or older

(T/F) If the fair market value of a home is $170,000 and the husband and wife file a homestead, against which there is only a $70,000 deed of trust, a creditor may not attach any of the homeowner's equity

True $70,000 + $100,000 = $170,000 protection