Form-of-the-week: Declaration of Homestead – Form 465

A declaration of homestead is a recorded statement designating a particular dwelling as the owner’s principal place of residence. The declaration gives a homeowner priority rights to preserve the equity in their home from loss, due to a creditor’s foreclosure on a judgment lien recorded junior in time to the declaration, in the dollar amount of the homestead exemption the owner qualifies to claim. [Calif. Code of Civil Procedure §§704.910,704.995; See first tuesday Form 465]

For a homeowner to qualify for a declaration of homestead:

  • the home must be occupied as their principal residence at the time a judgment is recorded against them; and
  • if married, at least one spouse must continually reside in the home until the court determines their home is a homestead.

The recorded homestead declaration includes:

  • the name of the homeowner declaring the homestead;
  • a description of the property homesteaded; and
  • a statement that the declared homestead is the principal dwelling in which the homeowner resides on the date the homestead is recorded. [CCP §704.930(a)]

Related article: Brokerage Reminder: The declaration of homestead – Home equity preservation

The declaration is signed, notarized, and recorded before it is effective. [CCP §704.930]

The homestead declaration may be signed and recorded by any one of several individuals, including:

  • the owner of the homestead;
  • the owner’s spouse; or
  • the guardian, conservator, attorney in fact, or a person otherwise authorized to act for the owner or the owner’s spouse. [CCP §704.930(b)]

A homestead may also be declared by anyone who has an interest in the property and resides there.

Further, the vesting of title to an individual’s personal residence may also be vested as a revocable inter vivos (living) trust or other type of title holding arrangement established for the benefit of the homeowner. [Fisch, Spiegler, Ginsburg & Ladner v. Appel (1992) 10 CA4th 1810]

Additionally, a declaration of homestead in no way restricts the homeowner’s ability to voluntarily sell, lease, or further encumber his homesteaded property. [CCP §704.940]

Properties on which a declaration of homestead can be recorded include:

  • a real estate dwelling (and its outbuildings);
  • a mobilehome established as real estate;
  • a condominium;
  • a planned development;
  • a stock cooperative; or
  • a community apartment project together with the land it rests on.

Homeowners qualify for one of three dollar amounts of net equity homestead protection:

  • a $75,000 equity for an individual homeowner with no dependents;
  • a $100,000 equity for a head of household; or
  • a $175,000 equity for homeowners who are age 65 years or older, disabled, or age 55 years or older with an annual income of less than $15,000 or a combined gross annual income of no more than $20,000 if married. [CCP §704.730]

A recorded homestead declaration does not appear in credit reports or alter the homeowner’s credit score and ability to borrow funds. Title companies disregard recorded homestead declarations, except in litigation guarantee policies.