Six Strategies Against a Homestead Claim
In Texas, and most states, the presence of a homestead claim in real property is a valuable quasi-property right. Only purchase money and federal and state tax liens can foreclose on real property subject to a homestead. There are, however, at least six (6) proven strategies to access real property claimed as homestead.
- Abandonment. The debtor has given up his homestead. If a homestead claimant is married, a homestead cannot be abandoned without the consent of the claimant’s spouse. TEX. PROP. CODE ANN. § 41.004. Temporary renting of a homestead does not change its homestead character if the homestead claimant has not acquired another homestead. Id. at § 41.003 If a debtor acquires and occupies a new homestead, he thereby abandons and loses his former homestead. Coury v. Prot, 85 F.3d 244, 254 (5th Cir. 1996). No one can have two homesteads at the same time.
- Alienation. The debtor has sold the property and has not reinvested the proceeds in a new homestead.
- Estoppel. The debtor has executed a homestead disclaimer to secure a loan for a non-homestead purpose.
- Judicial Estoppel. A court may preclude a party from asserting that a property is the party’s homestead.
- Death. The death of a claimant may terminate the homestead, although it will not terminate the family homestead when (i) the estate is insolvent and (ii) the claimant is survived by a spouse, minor child, or unmarried adult child remaining with the family. TEX. PROB. CODE ANN. § 279 (Vernon 2004).
- Bankruptcy. If the individual debtor fails to claim a homestead exemption in real property in his/her Schedule C, any exemption is lost.