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Rental of a Homestead

Author Laurie gaines
Participant Female

#1 | Posted: 18 Aug 2007 06:24 
Hello! We recently received notification that our homestead exemption has been denied because of renting. We travel a good deal on business, and often have people stay in the house while we are gone....some watch our dogs, some help out with utilities and some have paid rent. However, we always return to the home within a week or two, it is our ONLY home and the only property homesteaded. We have only accepted rental money because we are senior citizens on a fixed income and the house is empty anyway. We leave all personal property in the house and our intent is always to return; when we are gone on business we stay in a motor home. We meet all other homestead criteria. However, we also do NOT rent the entire dwelling....there are two rooms of the house that are not included in any rental. We have a hearing on August 30...can you help??

Author johnbsims3
Admin Male

#2 | Posted: 19 Aug 2007 08:49 | Edited by: johnbsims3 
Laurie,

Rental is considered abandonment of a homestead. In regards to partial rental, that alone is not a reason to deny homestead status. The keyword in the statute being 'entire'.

Do a search on 'rental' on this BBS and you may find case law and opinion. You can also search the terms 'travel' and 'abandonment' for more detailed information.
http://www.floridahomesteadservices.com

Author johnbsims3
Admin Male

#3 | Posted: 21 Aug 2007 08:55 
ABANDONMENT OF HOMESTEAD

Florida Stat. 196.061 Rental of homestead to constitute abandonment.--The rental of an entire dwelling previously claimed to be a homestead for tax purposes shall constitute the abandonment of said dwelling as a homestead, and said abandonment shall continue until such dwelling is physically occupied by the owner thereof. However, such abandonment of such homestead after January 1 of any year shall not affect the homestead exemption for tax purposes for that particular year so long as this provision is not used for 2 consecutive years. The provisions of this section shall not apply to a member of the Armed Forces of the United States whose service in such forces is the result of a mandatory obligation imposed by the federal Selective Service Act or who volunteers for service as a member of the Armed Forces of the United States.
History.--s. 1, ch. 59-270; s. 1, ch. 67-459; ss. 1, 2, ch. 69-55; s. 5, ch. 95-404; s. 8, ch. 96-397.
Note.--Former s. 192.141.

A recorded document, executed by those claiming a homestead exemption, giving up said homestead. Not applicable to all states and procedure must be according to local statutes.

Section 196.061, Florida Statutes," Rental of homestead to constitute abandonment", states in material part:

The rental of an entire dwelling previously claimed to be a homestead for tax purposes shall constitute the abandonment of said dwelling as a homestead, and said abandonment shall continue until such dwelling is physically occupied by the owner thereof. However, such abandonment of such homestead after January 1 of any year shall not affect the homestead exemption for tax purposes for that particular year so long as this provision is not used for 2 consecutive years.


Loss of Homestead

The rental of an entire dwelling previously claimed to be a homestead for tax purposes shall constitute abandonment of said dwelling as a homestead. Abandonment of such homestead after January 1st of any year shall not affect the homestead exemption for tax purposes for that particular year.
Section 196.061, Florida Statutes,"Rental of homestead to constitute abandonment", states in material part:
The rental of an entire dwelling previously claimed to be a homestead for tax purposes shall constitute the abandonment of said dwelling as a homestead, and said abandonment shall continue until such dwelling is physically occupied by the owner thereof. However, such abandonment of such homestead after January 1 of any year shall not affect the homestead exemption for tax purposes for that particular year so long as this provision is not used for 2 consecutive years.
After the property has been designated as a homestead, it continues to be impressed wit the homestead character, until the homestead character is lost by dissolution of the family relationship, a sale of the homestead, or its being abandoned as a homestead. Therefore, once it appears that property has been the homestead of a man and wife, any attempt to encumber of sell the property without conforming to the rules mentioned above would be invalid unless it can be proven that the property is no longer the homestead, due to some abandonment or termination of homestead rights. Abandonment of homestead is a question of fact to be determined on a case-by-case basis by a court or by a jury, and turns mainly on a question of intent of the parties to a transaction. Thus, if there is a temporary removal from the presumes, i.e. where a person is temporarily out of the country, moves temporarily for health purposes, or other such instances, there is no abandonment of the homestead, if it can be proved that the intent of the homestead claimants was to return to the property as their permanent homestead.
B. In a dispute between a homestead claimant and one who is attempting to put a lien on homestead property, the issue is frequently whether or not the homestead claimant has disclaimed his homestead rights, or would be estopped to raise this homestead claim. One of the basic principles is that a homestead claimant may not, merely by the fact of signing a written disclaimer of property as his homestead, preclude himself from later claiming the property as his homestead, even if this written disclaimer includes someone else to lend money against the homestead. Therefore, in such a case it would behoove the lender to make an examination of the occupancy of the property, and if the person is in fact residing in the property which is being mortgaged, a disclaimer signed by the person attempting to borrow money against homestead, would be invalid, if the claimant later contests that disclaimer and denies that the property was ever abandoned as his homestead.
http://www.floridahomesteadservices.com

Author Deb
Participant 

#4 | Posted: 28 Aug 2008 11:41 
If you are only going away for a couple weeks at a time and rent out the place from time to time during the periods you are gone.. I wouldn't sweat it. You should be able to keep your exemption I would think. If the home is your primary residence FOR REAL and you do actually live there for more than 6 months or so a year don't see the problem. If you have FL Driver's license and plates as well as utilities and other bills in your name you should have no problem showing ownership. If you are away for months at a time with the place shuttered up...I don't know if they would let you keep the homestead exp. statis or not.

Author johnbsims3
Admin Male

#5 | Posted: 23 Feb 2009 13:56 | Edited by: johnbsims3 
I keep getting alot of questions for clarification of the rental of a homestead. I hope this helps...

Pursuant to Section 196.061, Florida Statutes, for property to lose homestead through rental, it must first be actually rented for two consecutive years; and second, the entire dwelling must be rented for both years.

In order to lose homestead due to rental activity, there must: (1) be an
actual rental; and (2) the entire dwelling must be rented for two consecutive years.

In sum, if an individual does not engage in rentals of their entire dwelling, and maintains the indicia for permanent residence, homestead cannot be revoked.

Because homestead IS a Constitutional right, any ambiguities in the right to homestead are to be resolved in favor of the property owner.

Moreover, any exceptions to the grant of homestead (e.g. through rental) are to be strictly construed.

Florida law defines a "rental" as the granting of exclusive possession
and dominion over the property to a tenant. By contrast, a license agreement provides an individual with a privilege to enter upon the property. Under a license agreement, possession and ingress and egress are reserved by the owner. This distinction came to light recently in the case of Turner v. Florida State Fair Authority, 974 So. 2d 470 (2d DCA 2008).

Prior to the adoption of Section 196.061, there were several Florida
cases interpreting whether rental would terminate homestead. For example, the Florida Supreme Court restored homestead to an individual who engaged in seasonal rentals. City of Jacksonville v. Bailey, 159 Fla. 11 (Fla. 1947).

Similarly, the Second District Court of Appeal ordered that homestead be
returned where the property owner rented their home for short periods of
time and maintained their possessions in the home. Poppel v. Padrick, 117
So. 2d 435 (Fla. 2d DCA 1960). In both cases, the respective courts focused on whether the property owners manifested an intent to return.

The intent to return in both cases was gleaned from the fact that the property owners left their possessions in the premises and the leases were for short-terms. In both cases, homestead was restored.

The purpose of Section 196.061 is to terminate homestead when an
individual rents out their "entire" dwelling, and does so for two consecutive
years. In so doing, the Legislature harmonized the rental restriction with the indicia set forth in Section 196.015 and the case law that pre-dated Section 196.061. In other words, if the "entire dwelling" is rented out, the property owner has manifested an intent not to consider the subject property its residence. It follows that an owner who engages in the rental of their entire dwelling would not likely satisfy the indicia for homestead.

For example, if the entire dwelling is rented out for long durations of time, an individual could not utilize the address for the purpose of voter or vehicular registration.

The Constitutional right to homestead is not divisible in a single family
home.

Section 196.031(5), Florida Statutes. That Section states:
The exemption provided in this section applies only to those parcels classified and assessed as owner-occupied residential property or only to the portion of property so classified and assessed.

By its terms, the foregoing Section initially refers to subdivided
parcels and then more generally in the second clause to a "portion of
property." Put simply, this Section applies where a property contains
multiple parcels such as a duplex where the owner resides in one unit and
rents another.
http://www.floridahomesteadservices.com

Author Eleanor McAdams
Participant 

#6 | Posted: 1 Jul 2011 07:35 
Please clarify, I rented out my property last year on a month to month basis as I did not know if I was going to move back. I left in July of 2010. I just found out that I have been assessed a penalty on the 2010 tax term as a Homestead Penalty. Is this legal?
EM

Author johnbsims3
Admin Male

#7 | Posted: 1 Jul 2011 09:57 | Edited by: johnbsims3 
If your home was abandoned for another primary residence, then yes, it is. Similarly, the Second District Court of Appeal ordered that homestead be
returned where the property owner rented their home for short periods of
time and maintained their possessions in the home. Poppel v. Padrick, 117
So. 2d 435 (Fla. 2d DCA 1960). In this case, the court focused on whether the property owners manifested an intent to return.
http://www.floridahomesteadservices.com

Author Eleanor McAdams
Participant 

#8 | Posted: 1 Jul 2011 10:22 
The rental of an entire dwelling previously claimed to be a homestead for tax purposes shall constitute abandonment of said dwelling as a homestead. Abandonment of such homestead after January 1st of any year shall not affect the homestead exemption for tax purposes for that particular year.
Section 196.061, Florida Statutes,"Rental of homestead to constitute abandonment", states in material part:
The rental of an entire dwelling previously claimed to be a homestead for tax purposes shall constitute the abandonment of said dwelling as a homestead, and said abandonment shall continue until such dwelling is physically occupied by the owner thereof. However, such abandonment of such homestead after January 1 of any year shall not affect the homestead exemption for tax purposes for that particular year so long as this provision is not used for 2 consecutive years.

This is from your article above. I do not understand why this does not apply to me as the penalty is being applied to the 2010 tax year.
EM

Author johnbsims3
Admin Male

#9 | Posted: 1 Jul 2011 10:24 
It probably does, but the property appraiser won't follow the law. They are desperate for money and will fight for it, including ignoring well settled law hoping that you won't or can't afford to fight them in court.
http://www.floridahomesteadservices.com

Author Eleanor McAdams
Participant 

#10 | Posted: 1 Jul 2011 10:34 
The tax man referred me to statue 196-161 (1) (b) are you familiar with this statue?
EM

Author johnbsims3
Admin Male

#11 | Posted: 1 Jul 2011 10:41 
Yes. very. What does that have to do with you, or do I not have the full details? This is in reference to a non-permanent residency.
http://www.floridahomesteadservices.com

Author Eleanor McAdams
Participant 

#12 | Posted: 1 Jul 2011 10:46 
As per my previous inquires this is what the tax man told me they were basing the penalty of my homestead on. I appreciate all you help in this matter and wish you the best of luck in all you do. I will inform people of your sight as is it a great help.
EM

Author johnbsims3
Admin Male

#13 | Posted: 1 Jul 2011 10:48 
Thank you. Let us know how we can help!
http://www.floridahomesteadservices.com

Author NICK DIETZ
Participant Male

#14 | Posted: 17 Aug 2011 11:16 
According to the statutes, the PA can remove your homestead status for renting your "entire" homestead property during periods in two consecutive years. If you can show that your "entire" property was not included in the rental, then you should prevail just on that basis. Remember, PAs are scrounging for money, so they are being overzealous and making homeowners squirm. Read the article in the Florida Bar Journal online, The Loss of Homestead Through Rental by Mark A. Rothenberg and Kara L. Cannizzaro, especially about the "renting" versus "licensing". Be sure to create "licensing agreements" instead of "rental agreements" in the future in order to avoid the PAs wrath and keep your homestead safe.
FREE ADVICE AVAILABLE ... WORTH EVERY PENNY!

Author johnbsims3
Admin Male

#15 | Posted: 17 Aug 2011 11:17 
Nick, You are absolutely correct! Thank you!
http://www.floridahomesteadservices.com

Author Nicole Katz
Participant 

#16 | Posted: 29 Dec 2011 05:04 
John, would you have any information about cases in Volusia County where homestead status was removed for short term rental? Thank you.

Author johnbsims3
Admin Male

#17 | Posted: 3 Jan 2012 09:59 
NO, but there are many throughout the state...
http://www.floridahomesteadservices.com

Questions and Answers Florida Homestead Services - Florida Homestead Exemption Act Forum / Questions and Answers /
Rental of a Homestead
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