Whether a litigant is seeking to enforce a judgment or protect assets from creditors, it is important to be aware of the implications of a homestead estate. Also referred to as homestead protection, a homestead estate safeguards part of a person’s or family’s primary residence from attachment, seizure, execution on judgment, and levy or sale for the payment of most categories of debt. Massachusetts General Laws Chapter 188 provides for an automatic homestead estate worth $125,000 per residence, and a declared homestead amount of $500,000 per residence. In order to receive the latter, a homeowner must file a declaration of homestead in the Registry of Deeds in the county where the property is located. Elderly (defined as 62 or older) or disabled homeowners of any age are entitled to $500,000 of protection individually if they file a declaration of homestead; in circumstances where two elderly spouses each file such a declaration, the couple could be protected in the amount of $1,000,000.
Since 2011, the homestead statute has had a broad definition of “home.” Previously, the term was not defined by statute, but by the courts. In addition to the typical single family residence, G.L. c. 188 now includes in its definition of “home” the accessory structures surrounding a house, and the land on which it is located, multi-family properties of 2-4-unit dwellings, manufactured homes, condominiums, and in most cases the sale and insurance proceeds of such properties. Despite the law’s updated definition of its key term, courts are still settling disputes about whether or not a dwelling is eligible for homestead protection. For example, in March, a Massachusetts bankruptcy judge ruled that a single-family dwelling that was being used for both commercial and residential purposes qualified for homestead protection. In that case, Judge Melvin S. Hoffman noted that the “test for homestead eligibility is not whether the single family dwelling includes any commercial use but whether the commercial use predominates.” See In re: Walter D. Catton, Jr., No. 14-41468-MSH (March 5, 2015)..
While courts will generally interpret homestead law broadly in favor of homeowners, a declaration of homestead is not a panacea. There are certain categories of judgments and types of creditors that will still be permitted to pursue the sale of a property with a homestead estate in order to collect payment. For example, a mortgage holder can still foreclose on a homesteaded property; tax liens are impervious to a homestead declaration; and judgments to enforce overdue child support or spousal support will not be barred from collection due to a declaration of homestead.
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