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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.

  1. 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.
  2. Alienation. The debtor has sold the property and has not reinvested the proceeds in a new homestead.
  3. Estoppel. The debtor has executed a homestead disclaimer to secure a loan for a non-homestead purpose.
  4. Judicial Estoppel. A court may preclude a party from asserting that a property is the party’s homestead.
  5. 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).
  6. Bankruptcy.  If the individual debtor fails to claim a homestead exemption in real property in his/her Schedule C, any exemption is lost.
Sarah Grace Chastain