The Connecticut General Assembly
OFFICE OF LEGISLATIVE RESEARCH
August 8, 1997 97-R-0940
TO:
FROM: George Coppolo, Chief Attorney
RE: Homestead Laws
You asked whether Massachusetts has a homestead law that protects private homeownership in civil lawsuits. You also asked whether Connecticut has a similar law.
SUMMARY
Massachusetts has a homestead law that protects a person=s principle residence up to a certain amount from the reach of creditors under certain circumstances. Connecticut also has such a law, but the Massachusetts law provides a much broader protection, especially for elderly and disabled homeowners. Neither law establishes an absolute barrier to a forced sale all of the house to satisfy debts under all circumstances. Rather, each law protects the homeowner=s equity in the house up to a certain amount.
In Massachusetts, a debtor may exempt $100,000 in the principle family residence from most debts. For a debtor who is 62 or older, or disabled, the exemption is $200,000. The exemption is not available for taxes, debts arising prior to the purchase of the home or the creation of the exemption, first mortgages, judgment debts to support a spouse or child, or debts for ground rent if the debtor does not own the underlying land (Mass. Gen. L. Ch. 188, ∋ et. seq.).
In Connecticut, a debtor may exempt $75,000 in the principle family residence from most debts. The exemption is not available for taxes, mortgages, or other statutory or consensual liens (CGS ∋∋ 52-352a and 352b). Thus, if the equity exceeds $75,000 the homeowner may be forced to sell the house and pay the debt with amounts exceeding the $75,000 equity amount.
Each state=s law protects the debtor=s primary residence up to a certain amount for most types of debts. But the laws differ in many respects. Connecticut=s protection automatically applies; in Massachusetts, the homeowner must acquire it by having it reflected in the deed or by recording a declaration on the land records. Massachusetts provides for an enhanced protection for elderly or disabled; Connecticut=s protection is uniform. Massachusetts protection, which goes back over 100 years, is in the form of an estate in land; thus the homestead protection is treated as an interest in land; Connecticut=s protection is merely a shield against creditors.
Massachusetts=s protection survives the homeowner=s death and protects his or her minor children; Connecticut=s protection does not survive the owner=s death.
CONNECTICUT
Connecticut=s law exempts the homestead of an individual up to a value of $75,000 from (1) attachment; (2) post judgment collections; and (3) the reach of creditors in a bankruptcy case if the debtor chooses to use Connecticut exemptions instead of federal exemptions. The value that the law protects is the fair market value of the land and home minus the amount of any statutory or consensual lien that encumbers it. The law defines Αhomestead≅ as owner occupied real estate used as a primary residence. The exemption is limited to liens for any obligation or claim arising after September 30, 1993.
If a husband and wife jointly own the home and they each declare bankruptcy or are subject to the same judgment creditor, the exemption on the homestead would double to $150,000 since each would be able to assert the $75,000 protection, according to bankruptcy expert Attorney Neil Ossen.
The act does not protect homeowners from mortgages or other liens that they consent to. The equity the homestead law protects is the fair market value minus statutory or consensual liens regardless of when they arise. In other words, the homestead exemption cannot be used as a defense in a foreclosure on voluntarily agreed to mortgages and other consensual liens on the property or against foreclosure of a statutory lien such as a lien for unpaid real estate taxes.
MASSACHUSETTS
Right to Acquire A Homestead
A homestead estate may be acquired by an owner or owners of a home or by one who has a right to possess it by lease. To qualify, they must occupy or intend to occupy it as a principal residence. A homestead estate may be acquired only on one principal residence. A homestead estate may benefit the owner and his family which the law defines as either a parent and children, or a husband and wife and their children.
An individual or a couple can acquire a homestead estate up to $100,000. In order to get this homestead protection, either the deed concerning title must specify that it is the new owner=s homestead or, after acquiring title, the owner must file a declaration with the registry of deeds for the county or district in which the property is situated. The owner must sign the declaration and he must acknowledge it is his free act and deed.
Property that is protected by a homestead exemption is exempt from the reach of creditors except for (1) taxes, (2) debts contracted prior to the property being protected as a homestead (3) first mortgages or other debts contracted to purchase the property, (4) spousal or child support orders, or (5) money owed for ground rent if the homeowner does not own the underlying land.
Homestead for Elderly and Disabled
The homestead of a person who is 62 or older or disabled may be protected up to $200,000 instead of $100,000. Unlike the regular homestead protection, this protection is for each spouse who qualifies. Thus, a married couple can protect their homestead up to $400,000. In order to get this protection the elderly or disabled person must file a written, signed, and acknowledged declaration with the registry of deeds for the county or district in which the property is located.
In addition, where disability is claimed, the person must file with his disability declaration either an original or certified copy of a disability award letter issued by the U.S. Social Security Administration or a letter signed by a Massachusetts licensed physician certifying that the person meets the Social Security Administration disability definition.
The elderly or disability homestead exemption protects the homeowner from all attachments or judgments except (1) federal, state, and local taxes; (2) first and second mortgages; (3) debts, encumbrances, or contracts that existed prior to the filing of the declaration; (4) spousal or child support orders; and (5) ground rent where the elderly or disabled person does not own the underlying land.
An elderly or disabled person=s homestead exemption can be terminated during his lifetime by conveying the property by a deed, or by recording a signed and acknowledged release in the registry of deeds for the county or district where the property is located.
Use by Spouse or Minor Children
When a court has entered a judgment that a spouse is living apart from the homestead owner for justifiable cause, or a court has awarded custody of the minor children to a person other than the owner, the court may grant the spouse or minor children, or both, the right to use and live in the homestead. Once the court order giving the spouse or children this right has been recorded in the registry of deeds for the county or district where the land lies, the owner may not dispose of the homestead until the court revokes the judgment.
Continuation After Death
The homestead protection existing at the owner=s death continues for the benefit of the surviving spouse and minor children if one of them occupies the premises until the death or marriage of the spouse or, in the case of children, until the youngest unmarried child is 18.
Termination of Homestead Protection
The homestead estate may be terminated during the owner=s lifetime by either: (1) a deed conveying the property signed by the owner and his or her spouse, which does not specifically reserve the homestead or (2) a release, signed and acknowledged by the owner and his or her spouse, recorded in the registry of deeds for the county or district in which the property is located.
Sale of Spouse=s or Children=s Rights
The surviving spouse and the guardian of the minor children, if he has received court authorization, may join in the sale of a homestead estate. If there are no minor children the spouse may sell the estate; conversely, if there is no surviving spouse the guardian of the minor children may sell if authorized by the court. The purchaser may possess and occupy the premises and have the homestead protection for as long as the surviving spouse or children might have been protected if they had not sold the premises.