Leasing Portion of Homestead Land To Third Party Does Not Impair Exemption

I came upon another interesting court decision concerning Florida homestead. In this bankruptcy case a debtor owned a property in the county less than 160 acres. The debtor placed two mobile homes on the property. He lived in one mobile home and he rented the other mobile home and surrounding land to a third party for about $400 per month. Both mobile homes were attached to sewer and water lines. The debtor claimed the land and both mobile homes as exempt under Florida’s homestead provisions. The bankruptcy trustee objected to the exemption of that portion of the property used by the tenant and his rented mobile home. The bankruptcy judge overruled the objection and sustained the exemption of all of the debtor’s property.

The court noted that prior judicial decisions protected portions of homestead land used for the owner’s commercial purposes. Those cases did not address a situation where the owner rented part of the homestead land as well as a mobile home thereon. The bankruptcy court found that the debtor’s lease of part of his homestead property did not disqualify any part of his homestead exemption. The judge said that the result may be different if the homestead was located within a municipality because the Constitution limits the exemptions in a city to the owner and the owner’s family. The case is 08-3203-3F3 In re Oullette

posted by Jonathan Alper, bankruptcy and asset protection attorney, Orlando, Florida