Long-Term Leasehold Interest May Qualify as Protected Homestead

On June 27, 2012, the Florida Second District Court of Appeals issued its decision in Geraci v. Ems, 93 So. 3d 384 (Fla. 2nd DCA 2012).  The issue before the Court was whether a person's long-term leasehold interest in his condominium could qualify as a "homestead" exempt from forced sale under article X, section 4 of the Florida Constitution.  The lower Court held that it could not qualify as a homestead as it was not a fee simple interest. The Court of Appeals reversed and held that such a condominium may qualify as a homestead.

The Court of Appeals explained that article X, section 4 of the Florida Constitution does not distinguish between the different kinds of ownership interests that are entitled to the homestead exemption against forced sale.  Cutler v. Cutler, 994 So. 2d 341, 344 (Fla. 3d DCA 2008). The Court reviewed that the Florida Supreme Court "has long since adopted the general rule that a fee simple estate is not necessary to this exemption." Bessemer Props., Inc. v. Gamble, 158 Fla. 38, 27 So. 2d 832, 833 (1946).   The Court further stated that any beneficial interest in land" may entitle its owner to the homestead exemption. In determining a homestead, the Court noted that a court must instead focus on the debtor's intent to make the property his homestead and his actual use of the property as his principal and primary residence.

The Court held that when a lessee's interest in a leasehold estate includes the right to use and occupy the premises for a long-term and the lessee uses the property as his principal and exclusive residence, such an interest is entitled to the Florida homestead exemption from forced sale.

(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases.