The Massachusetts Homestead Protection Act is one of the biggest no- brainers for any homeowner in Massachusetts to take advantage off.
Quite simply, an estate of homestead is protection for a persons residence from most creditors. The declaration of homestead protects the equity in your home for up to $500,000 in the event you are sued. In other words, if you are sued, $500,000 of your equity could not be touched by an attachment and subsequent levy on execution of sale. Unfortunately today we live in a litigious sue happy society. The chances of getting into an accident and someone suing you can not be overlooked!
The Homestead form is filed at the registry in the county that your home is located in. All that is required is the preparation and recording of a Declaration of Homestead and the payment of a state recording fee. The total cost is typically around $100 to prepare and record the instrument. You could ask your attorney to prepare this document for you or possibly even the lenders attorney if you don’t have legal representation with your home purchase.
If you are married it only needs to be filed by one person and the other spouse is protected as well. You will typically see this document filed at the registry with all the rest of the closing papers on the purchase of a home.
There are some things that the homestead declaration does not protect against.
The following are exempt from the Homestead Law:
- Federal, state and local taxes, assessments, claims, and liens;
- Mortgages used to purchase the residence, and in the case of the elderly homestead, first and second mortgages held by financial institutions or others;
- An execution issued from the Probate Court to enforce its judgment that a spouse pay for the support of a spouse or minor children;
- Where buildings on land not owned by those declaring of a Homestead estate are attached, levied upon or sold for the ground rent of the lot whereon they stand;
- Upon an execution issued from a court of competent jurisdiction to enforce its judgment based upon fraud, mistake, duress, undue influence or lack of capacity;
- Debts contracted prior to the acquisition of the homestead.
The protection only extends to one primary residence. You can not have homestead protection on multiple properties.
There are some changes that have been proposed that would change how the mechanics of how the Massachusetts Homestead Protection works.
The new bill was filed on January 2nd 2010 and is known as House Bill No.1584. Below is a summary of the changes:
Automatic Homestead. The bill as proposed would automatically provide protection up to $125,000 of home equity for all homeowners, regardless of whether the homeowners have filed a declaration or not. Homeowners who record a homestead declaration would still receive protection of their equity up to $500,000.
Signature. A flaw in the homestead protection statute is that only one of the owners may file a homestead in any home. Under the current statute, joint owners, including spouses, currently have to decide which of them is more likely to have liability for a claim that is not covered by insurance or who is more likely to get sued. The proposed Bill would allow both spouses to file, even if only one spouse is named on the title.
Second Homestead. Under the new Bill, a second homestead filing would relate back to the date of the first filing. This would protect against liability incurred between the two filings that could compromise the second declaring parties equity.
Trust. Completely changing the current statute, the Bill would provide protection to beneficiaries of trusts that hold title to the residence, provided that the home is, in reality, the beneficiaries’ principal residence.
Transfer of Title Between Spouses and Co-owners. Currently, spouses or co-owners who transfer title between themselves without explicitly retaining homestead rights inadvertently terminate their right to protection. Under the new homestead protection act, transfers among family members will not terminate a previously declared homestead even if the homestead is not reserved in the deed.
Home Sale Proceeds. Under the current homestead protection law there is no protection for homeowners who sell their home and do not immediately reinvest the proceeds in a new principal residence. With the new revision proceeds from the sale of a home would be protected for up to a year and two years for casualty/insurance proceeds.
Mortgage. Lastly, the Bill would prohibit mortgage lenders from requiring homeowners to terminate their homestead rights in order to secure a mortgage.
Whether these new modifications take place or not, having Massachusetts Homestead protection is one of the wisest investments any home owner can make!
UPDATE ~ As of December 2010 the Massachusetts Homestead amendment has passed. The highlights of the bill as described above are the automatic homestead protection up to $125,000 without having to file a homestead document at the local registry, homestead remaining valid if the home is transferred to another family member, homestead remaining in force under a refinance, as well as providing additional protection for home owners who receive insurance proceeds from fire or other damages.
The homestead protection act also now provides coverage for those who have put their home in a trust. Lastly, closing attorneys in mortgage transactions must now provide borrowers with a notice of availability of a homestead.
About the author: The above Real Estate information on the Massachusetts Homestead Protection Act was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at firstname.lastname@example.org or by phone at 508-435-5356. Bill has helped people move in and out of many Metrowest towns for the last 24+ Years.
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Bill thanks for the excellent summary on the benefits of the Mass Homestead Protections laws. It sure does make sense to have this protection given the cost to get it!
I am still confused.. If I buy a house with my spouse and he files a homestead, because only one person can, and then I am sued can that cause us to loose the house , or are we both covered?
Hi Nancy – Under Massachusetts Homestead protection you and your husband would both be covered.
ok so now a twist.. we own the house together, but it is my primary residence with the children.. he moved to connecticut and established residency there. Is the homestead still valid.. thank you
Nancy although I am not a lawyer, I would see no reason why your Homestead protection would not still be valid.
Does a declaration of homestead protect oneself from a judgement stemming from a professional liability. For example: You’re a chiropractor, podiatrist or such; your malpractice insurance has lapsed or let’s say there was a ten day gap between policies. During that time of lapsed malpractice insurance – a patient claims you hurt them, they get a judgement against you … would the declaration of homestead protect the equity in your home for up to $500,000 in the event you are sued for a professional act/liabilty?
Robert – I would consult an attorney to get a definitive answer but my belief is that it would.
A friend of mine thought that Homestead Protection needs to be renewed every three years – is this true?
Hi Christine – No homestead protection does not need to be renewed every three years.
Dear Sir: Is the Homestead Act Coverage 500,000 for 2 people or $1,000,000 for 2 people? If you have an umbrella policy, if a lawsuit should occur, who would represent you first, Homestead Act or Umbrella policy?
Hi Bobbie – The coverage under the homestead protection act would be up to $500,000. Your 2nd question would be best answered by an attorney but the homestead protection affords you protection of the equity in your home. The umbrella may protect you further.
I hold liability insurance for a sideline private practice and would like to secure my savings and retirement home purchase through the Homestead Act. As the home was purchased as part of a Federal Exchange 1031 program, it will be rented out for 3 years. In the meanwhile, I live in a rental apartment. Can I take advantage of the Homestead Act anyway?
Therese – I believe you can as you don’t have another primary residence but you should check with an attorney to be sure.
I’ve just refinanced my home that I have a homestead on. Will I have to get another homestead?
Hi Chris – No you should not need to re-file another Homestead. I have heard of some lenders asking for the Homestead to be released but that is because they do not understand that mortgages are not affected by Homesteads.
My son is 17 and is being charged for damages to several vehicles in a used car lot. He is being tried as an adult. My home is in a homestead. If they decide to come after me for the damages can they go after my home equity?
Heidi the Homestead Protection will protect the equity in your home if someone tries to sue you in this instance as long as the homestead was on the property before the accident took place.
You stated that this is a PROPOSED bill, has it been passed yet? And if it has, when?I had a title search done recently and the homestead act my first husband and I had on the house was only in his name. I own the house in only my name now and have since remarried. I am told that the homestead act we had on the house is now null and void since it was in my first husbands name only. Is that true or would this new law change that status?
Carole the Homestead Protection Act was updated a few months ago. I am not sure of the answer to whether you are ok under the modified statute for Homestead protection. I would consult an attorney for clarification.
I am deep in credit card debt, I am in collections for several accts. I have payment plans on them except 1, which wouldn’t accept my plan, there was a decision ( never saw the paperwork) it was left in my mud room, now there was an execution & i recvd a letter from sheriff dept stating they have seized my property. I have a homestead act when i purchased, but refinanced 14 months later. Is my declaration still valid? And they ” Seize” my home or property? Can they threaten to do so if they cant? Thanks for any help. Mr Worried
Paul I believe your homestead exemption was not wiped out when you refinanced. Are they seizing your home because you have not paid your credit cards or your mortgage? This is something you will want to speak with a Real Estate attorney about.
I have been sued and there has been a judgement levied against me. The court has allowed a lien t be put on my house to securte the judgemnent. I had a Homested in place prior to the judgement and subsequent lien.
Would the judgement and prevent me from selling my home. My home is worth more than the $500K protection provided by the homested.
Hi Dennis – Yes I believe the lien would prevent you from selling your home because you would need to remedy the lien. I would suggest speaking with an attorney for a legal matter like this.
Hi,I filed a homestead in CA. in 1998.Then I moved out and rented my house it for several years.I moved back in 3 years ago and it is again my primary residence.
My question is;should or do I need to refile a new homestead declaration? I am 55 years old and my ex wife of 19 years ago served me with a breach of contract for me not removing her name from the Bank papers.
The deed was recorded properly,but we both overlooked the loan part.I have plenty of equity and the so called breach is the divorce settlement.The divorce was done by her and her attorney never addressed the transfer of loan papers.Even though she failed to state in the dissolution of divorce that her name was to be removed from the loan.I am being held responsible and now in a suit where as I am having to defend myself from a breach that was never in the settlement.
Thank you very much if you have time to put me in line to reply.Sincerely,Steve
Steve I would recommend you speak with an attorney in California as I have no idea is the laws in Massachusetts are the same. A homestead declaration has nothing to do with a divorce at least not in Massachusetts. The homestead law is for protection against creditors.
Because the Homestead law has been changed do I need to renew it if I already had it on my house or am I covered by the original filing?
Hi Jane – You don’t need to do a thing. The new Massachusetts Homestead Protection automatically is upgraded for whoever had one in place!
When we originally bought our home in MA we had a homestead done at the time of closing. We refinanced a few years ago and the homestead was removed by the lender, something we didn’t even realize was going to be done until we got to the closing. Can we put a homestead on our home now?
Do we need to have a lawyer do this for us or is it something that can be done on our own?
Hi Patty – You certainly can get Homestead Protection now and you do not need a lawyer to do it. You just need to get the Homestead form and record it at the registry of deeds for the county in which you are located.
I bought my home and filed for Homestead protection before I got married. Now that I’m married is my wife protected or am I only protected? Does my wife automatically become an owner of the house now that were married? Thanks for your help have a best day.
Hi Anthony – Under the Massachusetts Homestead Protection Act as it is currently written both you and your wife would have protection under the law.
We have had the homestead act for 15 yrs. If husband is convicted of a criminal offense, is there any exclusions.
Brenda it is my understanding that if a homestead exemption is in place and you are sued, regardless if it is a criminal case or not the homestead will protect the equity in the home.
My ex-wife and I own a home together where she resides with our 17 yr old child. She has a homestead on the home. Am I allowed to have my half of the home protected under the homestead act , former or current version? Thank you
Joe as far as I know the equity is protected for both parties under the homestead act.
I bought my house in 2005 and never bothered getting a homestead… On June, 2010 a judgement of execution was attached to my home for a $23,000 bank loan that has been converted into a credit card. Now that the law was passed, do I automatically have the $125,000 homestead on my home and will this protect my home from that execution judgement? Will the creditor be able to sell my property? Please help. Thanks.
Hi Keila – Unfortunately the Massachusetts Homestead Protection Act does not protect you for debts/judgments placed on the property prior to the execution and recording of the document. I would consult with an attorney.
When I initiated a living revocable trust several years I was told by the lawyers that I would have to opt out of the Homestead Act in order to include the property in the trust which would eliminate my heirs from probate court. I decided not to include in trust. Do the new Homestead laws allow me to include my home in my trust & still be covered by the Homestead Act?
Connie my understanding is the Massachusetts homestead protection act now includes the provision for having a home in trust. I would consult with an attorney in any legal matters such as this.
In 2008 I made application for the Mortgage Relief Act and was accepted. I homesteaded my property in 2007 before application for the Relief Act. Is my Homestead still exempt?
Hi Tiffany – A homestead does not protect you from anything related to the mortgage on your home.
I have a homestead act on my only residence since 2003. In 2009, i could not afford to keep paying my credit card from capital one. On April 14, 2011, i received a notice from the Plymouth county sheriff dept stating that capital one placed a levy on my home. from what i understand, the act protects your home from being attached from a credit card debt. so did the sheriff of Plymouth county make a mistake by putting a levy on my property. if so, how do i remove the levy…
Karen given the scenario you describe it does not sound like the credit card company has the ability to get to the equity in your home. I would speak to an attorney to advise you of your situation.
My husband and I are separated and own 2 seperate properties, he lives in one as, I in the other with our children. He filed a homestead with his residence and I was told I did not need to file one for the other residence, that his protects his heirs. Is this true?
Jen this is an excellent question and one that you should really ask an attorney. My best educated guess is that you would NOT have protection because you are talking about two separate properties.
We have a life estate trust on a 2 family. Under the homestead act in Massachusetts since this is a 2 family would it be covered under the $500.000 …or is it $250,000 because it is a 2 family…Thank you Diane
Diane you should be covered for $500,000 under the homestead act if this is your primary residence.
I placed a homestead on my home in 1995. In 2010 Capitol one placed a execution on my home for a credit card that went into collection. I thought the homestead act protected against a lein. Do i need to pay Capitol one to get the lein off? and does this mean when i sell the home or refinance i need to pay capitol one????
Raymere the Homestead Protection Act prevents a creditor from forcing you to liquidate your home to satisfy a debt. It does not stop a creditor from placing a lien on your property. If you owe the money then it is still your obligation to repay it.
My husband and I have gone as far as filing out the paperwork and getting it notarized. My question is where do you go to file it?
Tina you will file the Homestead declaration in the registry of deeds for the county in which you are located.
My husband and I are looking into homestead insurance because we pay our bills, but I am unemployed and have not found a job so far and am running out of time. If I do not get a job in time, I want to protect our home from creditors if it comes to that point. We have a 718 credit score, so we pay our bills, but if I do not get a job we will not be able to pay some of our creditors.
Will our home be protected, we are an older couple and we have a 12 and 19 years children we are all very scared at this point. I even went back to school to enhance my resume as an Executive Assitant.
May the equity in your home would be protected to the extent that a creditor could not force you to sell your home to pay them back. This would apply to creditors you owed money to after the homestead was placed. It will not protect you against a lender who holds the mortgage to your property or a creditor who has placed a lien on the home prior to you filing for Homestead. I would speak to a lawyer about your specific situation.
I have a letter from a Attorneys stating a judgment against us. We do have a Homestead filed in Massachusetts. They have not put a lien against our home as of yet. I don’t know what I can do to protect our home from this. Do I have to get a declaration and do i still have time? Thank you.
Joseph what you wrote does not make much sense. You write that you have a homestead filed and then go on to ask if you need to get a homestead and do you still have time? Do you have a Massachusetts Homestead Declaration or not? The Homestead will only protect you from not being forced to sell your home for the equity you may have. You do can still file for a homestead if you have not done so already.
Does the homestead protection act effect property tax at all?
Jeremie there is no effect that I am aware of as far as the Massachusetts Homestead Protection act and taxes.
Does The Homestead Act also protect your money? I am covered by The Homestead Act.
Fred the Massachusetts Homestead Protection Act protects the equity in your home from creditors. It does not protect other assets.
Does the $500,000 coverage also include what money you have or only what the house is worth?
Fred it is the equity in your home. It has nothing to do with anything else.
Hi Bill, I’ve got a question for you. Do liens filed by a condo association or HOA count as “first and second mortgages held by financial institutions or others;” which are exempt from the homestead protection? Can an HOA foreclose on a homestead protected Condo for a lien?
Bob this is a very good question. My best guess is that they could not force a sale with Homestead protection in place but to be sure I would consult with an attorney.
Hi Bill I have a question. I filed for homestead on 11/14/11 it was recorded on 11/15/11. A creditor put a levy on my home on 12/8/11 and it recorded 12/9/11. What does this mean? One day I came home and the sheriffs department stuffed the papers in the door. Can creditors put a lien on your home for $5000? I don’t really know to much about this. I am doing a lot of reading on it. I will pay them back when I start working again. I just wanted to know is this something to worry about right now or do I have time to repay?
Hi Maria – with Massachusetts homestead protection in place up to $500,000 of your equity is protected from creditors. If the loan was made to you before the homestead was put on your home then you do not have protection. If the loan was made after then your equity is protected and they can not force you to sell your home to collect the debt.
Hi,Bill I have a question. When I bought my house on 2008 I had put homestead protection but in the same year I got a 5000.00 loan.1 yr later I refinanced my home and lost my homestead protection. That same year I lost my job and I couldn’t paid my loan. So this year (2011), I decided to put a homestead again on the property just in case they put a lien on my home. Could the homestead protect me from a lien even if the loan was done in 2008 . Thank you
Mary the question becomes whether of not you had homestead protection before the loan was granted to you. If the loan was done first then you have no protection from that creditor from collecting the debt.
Hi Bill it is Mary again. I have another question for you. When I got the loan I did have homestead protection. But in 2009 I refinanced my home so homestead was removed. In 2011 I reapplied for homestead protection again . Could I be protected still from any creditor. Even if the Homestead was on and off . Thank you!
Am I protected by Homestead, if I sign a document after-the-fact, allowing a bank to hold the equity in our principle residence as collateral for a business loan taken by my spouse and his partners.
Mary by what you described it does not sound like you have Homestead protection as the creditor put on the attachment while you had no protection.
Hi Nancy – I don’t see why you wouldn’t be but I would consult with an attorney to be certain.
If a married couple has a homestead in the husband’s name and he then dies, is the wife still protected by the homestead, or does she need to file a new homestead?
Tom the wife would be protected under the homestead law.
I’m in the process of trying to get a loan modification.
If I get it how will that effect my homestead declaration
I live in Massachussetts.
Hi Bob – Modifying your loan will have no bearing on the homestead protection.
i own a 3 family house in massachusets and a condo i live in with a homestead act. If i am sued at the 3 family property, can they touch my condo at all?
Hi Joe – under the homestead act the equity in your condo would be protected from a lawsuit.
Bill, My elderly mother-in-law has my sister in law living with her. My sister in law and her daughter, my niece, are very irresponsible. My sister in law lets her daughter drive her car that my mother in law unknowingly cosigned for. My niece has been involved in many accidents in this car. We are deathly afraid that someone will sue my sister in law. My mother in laws house is in my husband’s name because we were afraid she would loose it due to my sister in laws bad credit etc. Is the best way to protect the house by putting it into a homestead act? My sister in laws name is on nothing now, just my husband’s. Thank you for your help.
Patricia the homestead protection is one of the cheapest forms of insurance you can ever purchase. I think it makes sense for every home owner to have it!
I have recently purchased a restaurant with some down payment and a loan of $100,000 from the seller. I signed the agreement with my personal security. I was wondering if the restaurant doesn’t work out and if I walk away from it, the seller might be able to go after my home. Can Homestead protect me with this? Of if it can, is it too late to take Homestead? From what it says above that The following are exempt from the Homestead Law, the last one says “Debts contracted prior to the acquisition of the homestead.”
Jean if you have a loan for your business already in place against the house the homestead is not going to protect you. If that is not the case the Homestead Protection will guard against someone suing you and collecting the equity in your home up to $500,000.
I just wrote a brief blog post about the recent Massachusetts bankruptcy court homestead decision:
Interesting information Nick on Homestead and ownership interests.
I had a homestead on a two family that I lived in until 2011. During that time I had a business that I owned go under with substantial personal credit card debt. One of the creditors attached a lien to this property in 2010, and another is threatening to do so now for a debt from 5 years ago. Since I was living in the home at the time the first CC attached the lien, am I protected from that, and secondly since the debt for the 2nd creditor was accumulated in that time as well, do I have any protection. I transferred the Homestead in 2011 to another property.
Hi Matt – In a legal matter such as yours my advice would be to speak to a Real Estate attorney. Most would be familiar with the homestead protection act.
I received a writ of execution on judgement of credit card debt. The levy is on my home. I have homestead. Do I have to file a claim of exemption or is it automatic?
Bruce as far as I know with Homestead protection you can not be forced to sell your home for a collection of debt as long as it occurred after protection was issued.
I filed a Declaration of Homestead back in 2012. I had a credit card go into collection years before I did this, of course they tacked on an absurd amount of interest and now it’s triple what it was when I first opened it. I just got an execution in the mail today saying that they “seized and took all the right, title and interest which the within named judgement debtor(s) XXX (my name) on XXX date. (2 days ago)… in and to the following described real estate and is bounded and described as follows, viz:” then it goes on to describe my property, which they took from public record. This credit card collection company has filed this with the MA land records and now it’s on record. Does this mean that they now “own” my home or does the Homestead Act protect me from this type of execution even though it was filed after the credit card went into collection?
Henry – the homestead protection act is not going to protect you if the debt took place before you filed for protection.
My name is June. I am inquiring about the Homestead Protection act.
Both of my parents are now deceased and they have a home in their name, myself and my siblings want to protect our home.
There is a lien on the property, will the Homestead be a good way to start to protect the home?
Hi June – I think having a homestead is always a good idea. One thing to be clear though is it does not protect against a lien that is already on the property.
Hi, thanks for the info. I am still need a little clarification, though. My husband owns our home. We have a few small ($2000 and less) credit cards that we recently stopped paying (6 months or so) we will be selling our house and plan to pay most of our debt off. Is it still possible to find a lien on the title even with homestead act in place?
Ruth – yes a lien can be put on the home with the homestead in place, you just can’t be forced to sell your home for the creditor to get paid.
I learned a lot great information