Major changes in Massachusetts Homestead Law

November 18, 2010 by DickH Posted in Current Events 3 Comments

By filing a Declaration of Homestead at the Registry of Deeds, a Massachusetts homeowner is able to protect the equity in his home from the laws of debt collection. The Homestead has been available for more than a century and there’s really no downside – it’s purpose is to prevent a family from being thrown out of its home for the payment of a debt. But a number of ambiguities have engulfed traditional homestead law, the most notable being whether you must file a new homestead after refinancing.

The Massachusetts state legislature recently completed work on a bill that would completely revise existing homestead law in a very positive way. The bill is on its way to the governor’s office where it will hopefully be signed. We’ll keep you posted on its progress.

This new law would grant all homeowners an automatic homestead exemption of $150,000. Any homeowner desiring more protection (and all existing homesteads are grandfathered in here) could file a written homestead declaration at the registry of deeds. This would provide $500,000 in protection.

While the law is quite comprehensive and will take some time to fully digest, it does clarify many previously ambiguous items. For example, the new law specifically states that a new mortgage (which is what you get when you refinance) does not void an existing homestead so there would be no need to record a new declaration. The law also makes clear that property held in trust may be the subject of a homestead.

This is just a sampling of the provisions of the new homestead law, the full text of which is available here. As soon as it is signed by the governor, we’ll let you know.

3 Responses to Major changes in Massachusetts Homestead Law

  1. Eleanor Rigby says:

    Hi Dick
    I am confused by this post. I have owned a home in Lowell since the 80’s/. It has been refinanced twice. I went to Lowell Deeds and did not find the second financial transaction.

    I printed out the declaration of homestead to get it in before any changes are made but there are a number of different books and pages listed on the lowell deeds website, the last being 2001.

    If I fill out the declaration using the last posted information am I covered?

  2. DickH says:

    First, I see no benefit to rushing to record a homestead solely to beat the new law. When the new law goes into effect, all existing homesteads will also be governed by the new provisions, none of which is negative or less beneficial to the homeowner than what currently exists.

    As for the existing homestead form which is available on the lowelldeeds website, the book and page requested refers to the deed by which you became the owner of the property, not to any subsequently recorded mortgages. Anyone who has questions about locating that deed can send me an email and I’ll help find it. Even if you use the wrong book and page number, it would not invalidate the homestead. Filing the form and giving the correct address of your personal residence are what’s important.

    The “do I have to record a new homestead after refinancing?” question is one that lacks a clear answer until this new law takes effect. Under existing homestead law, it’s clear that a new deed voids an existing homestead. For example, if you own the property individually, record a homestead, then record a new deed transferring the property to you and your spouse as joint owners, the homestead is void and you must record a new one. Technically, a mortgage is also a deed because it conveys an interest in the property to the lender. Following that logic, if a deed voids a homestead and a mortgage is a deed, then a new mortgage would also void the homestead. But that might just be a technicality because a slight majority of lawyers and judges I’ve spoken with believe the homestead does survive a new mortgage. My problem is that I’ve never been able to give folks a yes or no answer to that question. Under the new law, all ambiguity on this issue is removed.