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If you live in the state of California should you have a Recorded Homestead Protections?

Posted on Oct 6, 2011 by in Active Rain | 0 comments

If you live in the state of California should you have a Recorded Homestead Protections?

California law automatically provides Homestead Protection regardless of whether you actually record a Homestead on your primary residence or not. If you do not record the homestead declaration you could be risking portion of your proceeds from a voluntary sale of your home. What that means is, if there judgments to creditors recorded on your home the proceeds will go to the creditor or creditors rather than you the owner.

house & money

On the other hand if you have a recorded i.e.: declared homestead the law is clear that the proceeds of the sale can be used to purchase another home (up to the dollar limit of the homestead law).

dollar house

Keep in mind neither the automatic homestead nor the declared homestead will protect a homeowner from the loss of his or her home to a secured creditor. That means the Lender who financed the original purchase and or the lender who gave a second mortgage loan will be paid off first. Also if a contractor or subcontractor who filed a valid claim of a mechanic’s lien will also be paid off before you get your proceeds.

Since Title Companies generally take the position that only the courts can determine the validity of a Homestead and typically will not ignore liens and judgments based on a Homestead, I would strongly advise and encourage you, that if you expect to encounter financial trouble in the sale of your home you should consult an attorney for advice on the filing as well as prior to Listing and Selling your home.

Endre Barath's blog

If you are a consumer who is considering buying or selling a home, investment real estate, vacation homes, or beach properties in Southern California, Los Angeles, Century City, Westwood, West Hollywood, Beverly Hills, Culver City, Marina Del Rey, Venice or Malibu. Feel Free to give me a call at 310.486.1002 email me at or visit one of my websites at Your Pet Friendly Realtor. I contribute a portion of my commission to Local Animal Rescue Organizations.


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