THE SECOND DISTRICT COURT OF APPEALS HOLDS THAT RENTING ROOMS IN A HOME DOES NOT DESTROY CONSTITUTIONAL PROTECTION FROM CREDITOR CLAIMS.
Anderson v. Letosky, — So.3d — (Fla. 2d DCA 2020), 2020 WL 2745559
Decedent died owning a four-bedroom home. At the time of his death, three of the bedrooms were rented to tenants and Decedent lived in the fourth bedroom. The decedent had $38,000 in judgment liens that a creditor was attempting to enforce against his estate. Decedent’s son filed a petition with the probate court seeking a judicial determination that Decedent’s entire home was protected homestead and exempt from creditor claims. The creditor argued that 75% of the value of the home should not be protected so it could be used to pay the creditor. The trial court agreed with the creditor. The appellate court reversed and held that the entire house was a protected homestead even though three rooms were rented.
The court cited First Leasing & Funding of Florida, Inc. v. Fiedler, 591 So. 2d 1152 (Fla. 2d DCA 1992), which suggested a two-part analysis to determine whether the homestead exemption would extend to an entire property when the owner/debtor rented out some portion of it: 1) whether the owner/debtor’s residence is a fraction of the entire property and 2) whether the property is severed (by using an imaginary line can the residence be severed from the rest of the property?).
Other Florida cases held that in the case of a duplex or triplex, the owner/debtor’s residence was a fraction of the property that could be severed using an imaginary line leaving each tenant with a fully-functioning property meaning homestead protection would extend to only that portion of the property in which the owner/debtor resided; however, in the case of a single-family home where bedrooms are rented but common areas are shared, courts have found the property is not severable and therefore all of it retains its homestead character.