Is a debtor entitled to a homestead exemption if the house is located on agricultural land where state law prohibits having a residence?
According to the Eleventh Circuit, the debtor is nonetheless entitled to a homestead exemption, at least in Florida. Once again upholding the liberal interpretation of the homestead exemption, the decision is an important victory for debtors. Were the result otherwise, debtors could lose their homes if, for example, there were no certificate of occupancy.
Living on Agricultural Land
The debtor owned 14 acres of undeveloped land in an unincorporated area near Miami. In 2008, he purchased a trailer home, moved it onto the property and added a large, concrete patio. In 2013, he moved into the trailer home and had lived there ever since.
Armed with an unsatisfied Illinois judgment for about $225,000, creditors perfected a judgment lien on the property in 2015.
The 14 acres were zoned and taxed as agricultural land. In 2016, the county notified the debtor that living in the trailer home on agricultural land violated county ordinances. One month later, the debtor filed a chapter 13 petition and claimed a homestead exemption under Florida law.
The judgment lien creditors objected to the homestead exemption because the land was neither zoned nor taxed for residential use. Bankruptcy Judge Robert A. Mark of Miami overruled the objection in late 2017.
Upholding Judge Mark
When Judge Mark was upheld in district court, the creditors appealed to the Eleventh Circuit, where they lost again in an unpublished, per curiam opinion on August 19.
Most of the circuit’s opinion is a recitation of Judge Mark’s analysis. The appeals court ended its own opinion by ruling in favor of the debtor based on the court’s own reasons “and the other reasons given in the bankruptcy court’s well-reasoned memorandum opinion.”
The objecting creditors turned the appeal into a pure question of law because they conceded that the debtor actually lived in the property at all times and intended for it to be his permanent residence. Judge Mark found “no support” for the creditors’ “narrow interpretation of the [Florida] constitutional homestead protection.”
The circuit court upheld Judge Mark largely based on an 1882 decision by the Florida Supreme Court. Drucker v. Rosenstein, 19 Fla. 191 (Fla. 1882). There, the state’s high court said that the homestead exemption is valid even if the person is living in a tent or a cabin. “[S]uch occupation,” the state court said, “would give to it the character of a homestead and protect it under the statute from forced sale.” Id. at 198.
The Eleventh Circuit said that nothing in Drucker required the trailer to be permitted or built according to applicable law and building codes.
In a footnote, the circuit court said that the case did not involve a motor home or recreational vehicle that can be used for transportation and is not affixed to the real property.
Is a debtor entitled to a homestead exemption if the house is located on agricultural land where state law prohibits having a residence?
According to the Eleventh Circuit, the debtor is nonetheless entitled to a homestead exemption, at least in Florida. Once again upholding the liberal interpretation of the homestead exemption, the decision is an important victory for debtors. Were the result otherwise, debtors could lose their homes if, for example, there were no certificate of occupancy.
Living on Agricultural Land
The debtor owned 14 acres of undeveloped land in an unincorporated area near Miami. In 2008, he purchased a trailer home, moved it onto the property and added a large, concrete patio. In 2013, he moved into the trailer home and had lived there ever since.
Armed with an unsatisfied Illinois judgment for about $225,000, creditors perfected a judgment lien on the property in 2015.
The 14 acres were zoned and taxed as agricultural land. In 2016, the county notified the debtor that living in the trailer home on agricultural land violated county ordinances. One month later, the debtor filed a chapter 13 petition and claimed a homestead exemption under Florida law.
The judgment lien creditors objected to the homestead exemption because the land was neither zoned nor taxed for residential use. Bankruptcy Judge Robert A. Mark of Miami overruled the objection in late 2017.