In Florida, the home of a resident of this state (“Homestead”) is truly his or her castle, a castle that is impenetrable by creditors. The Florida Constitution exempts Homestead property
from levy and execution by judgment creditors. Florida courts have liberally expanded definitions of Homestead property which includes more than just a single family house. Condominiums, manufactured homes, and mobile homes are also afforded Homestead protection. The Constitution defines Homestead as one’s principal place of residence up to one-half acre within a municipality and up to 160 contiguous acres in any county in Florida.
There are important exceptions to Florida’s Homestead protection. To qualify for Homestead protection, a debtor must be a permanent Florida resident and the Homestead property must be his primary place of residence. Property purchased as a future residence is unprotected until the property is occupied as a principal residence.
The recent economic downturn has led to numerous battles between county property appraisers desperate to preserve revenue and homeowners desperate to generate additional income from their properties.
A new battle ground has emerged as to the extent to which property appraisers can revoke the constitutional right to Homestead where property owners rent out their Homestead properties.
It had been commonly understood that property owners who rent their Homestead property for long periods of time forfeit the benefit of Homestead. The underlying rationale for the termination of Homestead due to long-term rentals is that the owner’s long-term rental activity, coupled with his or her implied absence from the property, signifies the owner’s intent to reside elsewhere. Therefore, the owner’s departure and residence elsewhere, combined with the conversion of his or her home into a commercially oriented use (a rental), reveals an “intent” to abandon the Homestead./p>
By contrast, there are occasions when property owners do not intend to abandon their residence through rental. For example, numerous Floridians rent out their homes for short periods of time and may even remain on the premises during the course of these rentals. These short- term or seasonal renters are now finding themselves forced to defend their right to their Homestead exemption, even when they still consider their home to be their permanent residence.
Florida courts have traditionally emphasized that a determination of Homestead abandonment is made on a case-by-case basis. However, The Florida Legislature attempted to codify and clarify the rental statute as follows: The rental statute requires the existence of a lease agreement; second, the rental must be of the “entire dwelling.” The rental of the entire dwelling constitutes an abandonment of the right to Homestead. However, the rental statute is ambiguous and does not provide homeowners with adequate guidance.
Given the current economic climate, in which Floridians may, in some instances, be compelled, to offer their homes for short-term or seasonal rentals in order to keep their homes, it would seem unjust to require the burden to fall on the homeowner after they have already established Homestead. Rather, it would seem more appropriate to set specific guidelines for property appraisers so they are better equipped to make a determination that the property owner actually intended to abandon their Homestead through rental. Thus, legislative clarification is needed and we hope that such clarification would simply re-enforce the deference given to homeowners by the Florida Supreme Court’s jurisprudence in which the established right to Homestead has been questioned.
Cav. Piero Salussolia , Esq.
Cav. Piero Salussolia, Esq.
Avv. Gemma A. Caterini (admitted only in Italy).
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