{"id":116,"date":"2016-07-07T01:57:13","date_gmt":"2016-07-07T01:57:13","guid":{"rendered":"http:\/\/pontevedralaw.com\/l\/?p=116"},"modified":"2021-05-19T10:35:51","modified_gmt":"2021-05-19T14:35:51","slug":"floridas-homestead-act-provides-added-protection-of-proceeds","status":"publish","type":"post","link":"https:\/\/pontevedralaw.com\/l\/2016\/07\/07\/floridas-homestead-act-provides-added-protection-of-proceeds\/","title":{"rendered":"Florida\u2019s Homestead Act Provides Added Protection of Proceeds"},"content":{"rendered":"

On April 28, 2016, the Florida Supreme Court affirmed the Fourth District Court of Appeals decision in JBK Associates, Inc. v. Sill Bros, Inc.<\/span>, 160 So. 3d 94 (Fla. 4th DCA 2015).  In its decision, the Court held that the proceeds from the sale of a person\u2019s homestead remain protected if they are placed in a type of safe investment account that does not garner any significant amount of earnings and exists for the purpose of reinvestment into a new homestead.  JBK Associates, Inc. v. Sill Bros, Inc.<\/span>, No. SC15-977 (Fla. April 28, 2016).<\/p>\n

In Florida, a person\u2019s homestead is \u201cexempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon,\u201d except for certain debts: \u201cthe payment of taxes and assessments thereon, obligations contracted for house, field or other labor performed on the realty.\u201d  Art. X, \u00a74, Fla. Const.  Further, this provision \u201cis to be liberally construed in favor of protecting the homestead.\u201d  Orange Brevard Plumbing & Heating Co. v. La Croix<\/span>, 137 So. 2d 201, 203-04 (Fla. 1962) (holding in part that Florida\u2019s homestead exemption has been interpreted to provide protection not only for the physical homestead property, but also for both the cash and non-cash proceeds from a voluntary sale of the homestead as well).  However, three requirements must be met in order to ensure the protection of the proceeds: \u201c(1) there must be a good faith intention, prior to and at the time of the sale, to reinvest the proceeds in another homestead within a reasonable time; (2) the funds must not be commingled with other monies; and (3) the proceeds must be kept separate and apart and held for the sole purpose of acquiring another home.\u201d  Orange Brevard<\/span>, 137 So. 2d at 206.  Additionally, the proceeds of the home are not exempt if they are not reinvested in another homestead or if they are held for the general purposes of the debtor.  Id<\/span>. (emphasis added).<\/p>\n

In its decision, the Court determined that allowing funds to be placed into secure investment accounts serves a practical purpose.  \u201cIn today\u2019s economic climate, in which traditional bank accounts do not garner any significant amount of interest earnings, we do not believe placing the proceeds from the sale of a homestead in the type of safe investment account at issue here demonstrates an intent so different from reinvestment in a new homestead within a reasonable time as to violate Orange Brevard<\/span>.\u201d  JBK Associates, Inc. v. Sill Bros, Inc.<\/span>, No. SC15-977 at 5.  The Court further emphasized that the money was placed in a Wells Fargo account with the express purpose to reinvest the sale proceeds into a new homestead (the account was named \u201chomestead account\u201d).  Id.<\/span><\/p>\n

Accordingly, the Court\u2019s decision not only provides additional protection of the proceeds from the sale of a person\u2019s homestead, but it also gives much needed guidance to potential sellers.  In short, in order for a seller to keep his or her proceeds protected under the Florida Constitution, there must be good intention to reinvest into another homestead, the proceeds must not be commingled with any other funds, and the account where the funds are to be placed must be a secure investment account with the purpose to reinvest the funds into a new homestead.  By complying with these guidelines, the proceeds from the sale of an individual\u2019s homestead should remain protected from any judgment creditors.<\/p>\n","protected":false},"excerpt":{"rendered":"

On April 28, 2016, the Florida Supreme Court affirmed the Fourth District Court of Appeals decision in JBK Associates, Inc. v. Sill Bros, Inc., 160 So. 3d 94 (Fla. 4th DCA 2015).  In its decision, the Court held that the proceeds from the sale of a person\u2019s homestead remain protected if they are placed in […]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[33,18,39,20],"class_list":["post-116","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-florida-homestead-act","tag-hunter-faulkner","tag-jbk-associates-inc-v-sill-bros-inc","tag-land-use-and-development"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/pontevedralaw.com\/l\/wp-json\/wp\/v2\/posts\/116","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pontevedralaw.com\/l\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pontevedralaw.com\/l\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pontevedralaw.com\/l\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/pontevedralaw.com\/l\/wp-json\/wp\/v2\/comments?post=116"}],"version-history":[{"count":3,"href":"https:\/\/pontevedralaw.com\/l\/wp-json\/wp\/v2\/posts\/116\/revisions"}],"predecessor-version":[{"id":330,"href":"https:\/\/pontevedralaw.com\/l\/wp-json\/wp\/v2\/posts\/116\/revisions\/330"}],"wp:attachment":[{"href":"https:\/\/pontevedralaw.com\/l\/wp-json\/wp\/v2\/media?parent=116"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pontevedralaw.com\/l\/wp-json\/wp\/v2\/categories?post=116"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pontevedralaw.com\/l\/wp-json\/wp\/v2\/tags?post=116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}