Part II: Can a co-op be homestead property?
In a comment posted here in connection with Phillips v. Hirshon (a recent 3d DCA opinion holding that a cooperative apartment may not be considered homestead property for the purpose of subjecting it to Florida Statutes regulating the descent of homestead property), Bradenton attorney Jeffrey S. Goethe discussed a case where he successfully argued that Florida's homestead creditor protections apply to cooperative apartments. The key to possibly reconciling these two divergent results is to recognize the divergent lines of case law that has evolved with respect to each of the three distinct facets of homestead law addressed in Florida's constitution:
- Article X, §4(c) for devise and descent
- Article X, §4(a) and (b) for exemption from forced sale
- Article VII, §6 for taxation
In a follow up to his comments, Jeff was kind enough to share a copy of the 11-page legal memorandum he filed in his case and agreed I could post it on the blog for the benefit of others (see here for copy).
Thanks again Jeff.
The Second DCA recently issued a PCA opinion with a citation to the Wartels decision. Although I had prevailed on the argument that Cooperative interests can be Article X, s. 4 homestead for purposes of creditor protection in a prior case at the trial level, the 2d DCA disagreed in this case. Although there was no opinion, the court may have been thinking about the distinction between statutory creditor protection under section 222.05, which specifically includes protection for leasehold interests, and Art. X, s. 4 creditor protection, which refers only to an interest in land. This distinction was addressed in a recent opinion by Judge Glenn in a bankruptcy decision - In re Lisowwski, 395 BR 771 (M.D. Fla. 2008). Almost every real estate practitioner I speak to says that a perpetually-renewable 99 year lease from a coop should qualify for protection under Article X, s. 4. Hopefully another court will take on the issue. It is a real trap for practitioners, not to mention the family member who thinks they inherited protected homestead, only to learn, after it is too late to plan, that the protection evaporated upon the death of the deceased owner.