Homestead Protection… Are You Sure?
One of the benefits of living in Florida is your homestead protection from creditors. But if that “creditor” is a former spouse, then Florida Constitution Article 10 §4, which exempts homestead property from forced sale, may not provide that protection.
Why? Because where fraud or reprehensible conduct is involved, an equitable lien may be imposed even against homestead property. Simply stated, Florida courts adhere to the proposition that homestead exemption laws cannot be used as instruments of fraud.
Getting an equitable lien isn’t simple. And yes it takes a court to make findings and to award an equitable lien on the homestead property so it can then be subject to a forced sale. This means a sheriff would conduct a judicial sale, controlling the time and manner of the sale and establishing the sale price. Or a separate foreclosure action would be pursued to satisfy the mortgage company first and then payment of the equitable lien. It also means that the house can’t quietly be sold with the titled owners skipping off with the proceeds to buy another house somewhere else, because now the equitable lien shows up in any title search needed for any subsequent sale.
An equitable lien is not easily awarded. It requires you to initiate a court action for contempt and that you prevail. The court must make findings of past due support and support arrears. The court must also find a pattern of egregious conduct represented by significant nonpayment of support for a period of time. Prior orders of contempt for nonpayment of support helps establish the pattern of egregious conduct. The court needs to determine that actions were taken equivalent to divesting funds to avoid the ability to pay support arrears. It requires that the only source for payment of those arrears is the homestead property.
But, you say the homestead is jointly titled with a new spouse? So what! If a court finds transfers of assets to the new spouse during the time that support arrears were accumulating followed by the purchase of a new homestead, all while court ordered support is not being paid, then the court may find assets were divested to avoid a court order. That can result in the finding of reprehensible, fraudulent and egregious behavior for an equitable lien to be slapped on the house.
So, if you have been found in contempt for nonpayment of court ordered support and have arrears that you are not paying, your house may be subject to a judicial sale.
If you have been awarded arrears from contempt orders, have been chasing those arrears and can’t find any other source to satisfy those arrears, you may be eligible for an equitable lien against your former spouse’s homestead.