Anyone who owns real estate and occupies it, or intends to occupy it, as a primary residence in Massachusetts needs to take advantage of the protections of the homestead law. The homestead statute, set forth in Chapter 188 of the Massachusetts General Laws, protects primary homes from being taken away by unsecured creditors.
The current law, which took effect in 2011, provides an automatic estate of homestead of $125,000 for primary residences. This protection occurs automatically by operation of law and without having to record a homestead declaration. But by taking the extra step of recording a declaration with the registry of deeds, the protection is dramatically increased to up to $500,000, or even up to $1,000,000 for anyone who is elderly (defined as age 62 or older) or disabled.
What this basically means is that, for a minimal recording fee ($35.00 to $37.00 depending on the county), a written homestead declaration exempts up to $500,000 of the equity in your property from attachment, seizure, and sale for payment of debts to third parties.
Of course, there are notable and obvious exceptions to this exemption. A homestead declaration will not protect you from:
- The lender that financed your mortgage loan
- Federal, state, or local taxes and betterment assessments
- Court-ordered spousal or child support
- Executions, or attachments recorded against the property prior to the recording of the declaration of homestead (subject to the automatic $125,000 exemption)
In order to take advantage of the law, a declaration of homestead needs to be filled out and signed by each owner (the grantees on the deed to the property), and listing their occupying spouse if the spouse is not already listed on the deed. The declaration must be notarized and recorded with the registry of deeds for the county where the home is located. The good news is that, if you have previously recorded a homestead declaration, the new statute extends the protection for you without having to re-file anything. And while the previous version of the statute did not specifically grant homestead protection to trust beneficiaries, the updated law does so. In that case, the trustee signs the homestead declaration and lists the trust beneficiaries who occupy the property as their primary home, thus covering them fully.
At Brooks & Crowley, we handle dozens of real estate closings every month throughout Massachusetts, and we want everyone to have this extra protection. This is why, when we handle your real estate closing, we always include the drafting of the homestead for no additional fee (you only pay the registry recording charge). And if we did not handle your closing but you want to file a homestead declaration, we’ll be happy to assist you for a nominal fee. If you have any questions about this or any other real estate issues, feel free to contact us.