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» Understanding the Texas Homestead Exemption
Understanding the Texas Homestead Exemption
Texas homestead law is commonly misunderstood by judgment creditors in Texas who simply desire to collect money that the courts have said is due. In my experience I find that judgment creditors just do not understand the reason why a debtor can get away with not paying a legal judgment whilst living in an expensive residence which can not be confiscated to pay the judgment.
Let's take a quick look at Texas homestead law and I will make an effort to spell out the protections in place.
Texas Homestead Exemption is in the Texas Constitution
The primary factor to grasp about the Texas homestead exemption is that it is embedded in the Texas Constitution. Article XVI, § 50 of the Texas Constitution plainly exempts a debtor's homestead from forced sale to satisfy a debt. There are, on the other hand, exceptions. But, those exceptions are very specific. They are:
1. A purchase money debt
2. Taxes owed
3. An owelty of partition imposed against the property either by court order or by written agreement of all the owners of the property
4. The refinancing of a lien against the homestead
5. Labor and material used to construct enhancements under a written contract signed by both spouses if owned as a family homestead
6. Certain approved home equity loans
7. A reverse mortgage, or
8. The conversion and refinance of a personal property lien secured by a manufactured home to a lien on real estate.
What this means is that only those debts that fit into these 8 classifications of exceptions are debts for which a creditor can take a debtor's homestead under Texas law. When you have a general civil money judgment against a Texas debtor, your debt does not fit within one of these exceptions so you are unable to force a sale of your judgment debtor's homestead to pay your judgment. In other words, the Texas homestead exemption shelters a Texas resident's home from a general civil money judgment.
Precisely how Does Texas Homestead Law Characterize the Homestead?
Even though you will definitely not have the ability to force the sale of your judgment debtor's homestead to pay your general civil judgment, it is still essential that you recognize how Texas defines the homestead. Understanding guidelines of Texas homestead law will help you look out for property you can confiscate and sale to pay your judgment.
So, what is the homestead in Texas?
The Texas Constitution creates a distinction between two types of homesteads. There is a rural homestead and an urban homestead. A rural homestead is defined as "not in a town or city." See Texas Constitution art. XVI, § 51.
The Rural Homestead
A rural homestead in Texas can be one tract of land or many parcels of land. Also there is no restriction on the number of parcels of rural property that your judgment debtor can claim as homestead. However, there is a limit on the number of acres he may claim in those multiple parcels of property. If your judgment debtor has a family, he can claim a rural homestead up to 200 acres. If, however, your judgment debtor is a single adult, he is limited to 100 acres for a rural homestead. See Texas Constitution art. XVI, § 51; Texas Property Code § 41.002 (b).
One point regarding Texas homestead law that is typically confusing to judgment creditors is the residence requirement to claim a Texas homestead exemption for a rural homestead when there are numerous non-contiguous parcels of land being claimed as a rural homestead. Ultimately, your judgment debtor is required to live on the premises to claim it as a rural homestead. On the other hand, he does not have to live on all the parcels as long as the additional tracts are used for the support of his family. See Fajkus v. First National Bank, 735 S.W. 2d 882, 884 (Tex. App. -- Austin 1987, writ denied).
The Urban Homestead
To qualify as an urban homestead in Texas, your judgment debtor can have more than one lot but they have to adjoining lots. But, the lots can not amount to more than 10 acres of land. This 10 acre limitation applies regardless of whether it is a family homestead or a single adult homestead. Texas Constitution art. XVI, § 51; Tex. Prop. Code §
41.002 (a). There are a few additional requirements that your judgment debtor must meet before he can declare a Texas homestead exemption for an urban homestead. Basically, the following must be trust at the time the designation as a homestead is made:
1. The property must be within the limits of a municipality or a platted subdivision.
2. The property must be serviced by police and fire protection; and
3. The property must have at least three of the following services provided by a municipality - electric, natural gas, sewer, storm sewer, and water.
See Texas Property Code § 41.002 (c) (1) andamp; (2).
Texas Homestead Exemption is an Absolute Safeguard
Homestead law in Texas supplies an absolute blanket of protection around your judgment debtor's homestead. The only exceptions are for the debts specified at the beginning of this article. That absolute blanket of protection means that as a judgment creditor holding a general civil money judgment against a Texas judgment debtor you have little recourse against your judgment debtor's homestead as a method of collecting your judgment.
But, as a judgment creditor you do want to be persistent in your inspection of any Texas homestead exemption claims your judgment debtor makes. What you should pay particular attention to whether your judgment debtor is declaring more property than is authorized both for a rural homestead or an urban homestead. If he owns much more property than is permitted in the homestead exemption in Texas, you are allowed to seize and sell the land that is not protected by homestead law in Texas.
Article Source: Articles For Knowledge Sharing
About the Author
Harvey L. Cox is a Texas attorney and founder of the Texas Judgment Collection Center. For more information, go to http://TexasJudgmentCollection.com.
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Date: Wed, 5 Dec 2012 -
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