Eric Feichthaler

Dear Mr. Feichthaler:

I am in the process of selling my home, and on the day before closing the title agent told me that I have a judgment against me from an old credit card debt. With interest, it is over $20,000! I need those funds for the purchase of my next home, and the title agent says I have to pay it. I thought if I said the property was my homestead that creditors couldn’t lien my property? What do I do?

— Cathy B.

Dear Cathy:

Although not common, this issue occasionally arises in the title transactions we handle as well. This issue should have been discovered much earlier, when the title commitment was completed. Title commitments should be provided well before the closing date so matters like this can be resolved prior to closing. De-pending on the timing and circumstances of the judgment, you have several options.

First, you are correct that liens and judgments cannot attach to your homestead unless you consent to the lien, such as a mortgage or a stipulated judgment. However, for you to be able to clear your home of this title issue, the Florida Statutes provide a legal procedure that allows a creditor to challenge whether the property is, in fact, homestead. This procedure takes at least 45 days, and, if followed properly, the property can be sold without the lien, and the title policy will insure the property for the new owner, if the creditor makes no objection. With your facts, the closing should have already taken place. It may be in your best interests to contact the judgment holder and attempt to negotiate the amount of the debt to a lower amount, which could lead to an efficient resolution than the 45 days needed for the homestead notice procedure. If you can reach an agreement with the creditor, they can release the lien against the property as part of the closing and be paid at that time.

The first step will be to work with your buyer to see if they will extend the closing while you work out this issue. Then, depending on how you wish to proceed, you can contact the creditor or an attorney to follow the statutory procedure to clear the cloud on title.

I wish you luck and a successful closing.

Eric P. Feichthaler has lived in Cape Coral for over 35 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Museum of History, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at eric@capecoralattorney.com, or 239-542-4733.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.