Texas Homestead Laws
Homestead Protection Laws in General
So-called "homestead protection laws," (or "homestead laws" see below) on the books in most states allow property owners to declare a limited piece of their property a "homestead" (based on either property value or acreage) and thus off limits to creditors. Basically, these laws protect real estate from forced sales, intended to prevent homelessness in certain situations. Texas homestead laws predate the state's admission into the union, but are also encoded into the state's constitution. Homestead laws are designed to protect small individual property owners -- such as homeowners -- from the everchanging economic climate of the United States. Often when the economy changes, small property owners are unable to meet the demands of their creditors. Homestead laws allow an individual to register a portion of his or her real and personal property as "homestead," thereby making that portion of the individual's estate off-limits to most creditors. The idea behind these homestead laws is the preservation of the family farm, home, or other assets in the face of severe economic conditions. The items and amounts of money that can be set aside as a homestead are varied. The rules governing which property can be registered as homestead property seem to adhere to regional patterns. Real property that may be subject to the homestead exemptions vary in value from a $300 exemption from judgments in Pennsylvania to a $200,000 exemption for persons over age sixty-two in Massachusetts. They vary in character from the District of Columbia's allowable homestead of $200 worth of tools, and, if a professional, $300 worth of furniture, and $300 in clothes per person, to Colorado's unlimited acreage or Texas's 200 acres. In each case, the property that may be homesteaded is designed to perpetuate the family's estate and improve its chances for survival in hard times. Limitations The homestead is a back-up and a type of insurance against unexpected catastrophe; it will not ordinarily protect you from a bad business deal or from ordinary bankruptcy. Nonetheless, because an unscrupulous person could manipulate the homestead protections as a shield from living up to his legal obligations, there is much case law on homesteads. Indeed, ordinary business and commercial creditors ordinarily may penetrate property set aside as homestead.
Texas Homestead Protections Among the Strongest in the Nation
Texas' homestead laws offer much more protection from creditors than homestead laws in most other states and are staunchly defended by the state's courts. They don't impose a dollar value on eligible property, limiting the size of the homestead to 10 urban acres or 200 rural acres. A Texas Justice's opinion in a 2011 appellate court case offers the following guidance:
"Indeed, a court must uphold and enforce the Texas homestead laws even though in so doing the court might unwittingly assist a dishonest debtor in wrongfully defeating his creditor."
What is a 'Homestead' in Texas?
In order to be considered a "homestead," the property must be owned by an individual (or jointly owned), but may not include property owned by a corporation or partnership. It must be a fixed item, such as a house or farm, and cannot include any "movable" asset such as a boat or mobile home. Otherwise, the homestead is limited only by acreage.
You may also be eligible for federal homestead protections when filing for bankruptcy protection. Generally, federal homestead exemptions protect a portion of your home equity from creditors.
Learn more about Texas homestead laws in the chart below. Code Section Const. Art. XVI, §51
Max. Property Value That May Be Designated 'Homestead'
Maximum Acreage (Urban) 10 acres
Maximum Acreage (Rural) 200 acres
Note: State laws are constantly changing. It is a good idea to Call Sherry Tavel at 281-354-8156 as well as conduct your own legal research to verify the state law(s) that may affect you.