Unfortunately, no one is offering fifty acres and a mule to homesteaders any more, but the State of Nevada does offer an extremely generous homestead exemption to homeowners, which means that should you ever be in the unfortunate situation of owing money to creditors, you can prevent them from foreclosing on your home or seizing the equity in your home up to $550,000. The only requirements are that you be the owner of the property (even if the property is mortgaged or subject to a deed of trust) and that you use the property as your primary residence. All you need to claim your homestead is a recorded homestead declaration with the county recorder in the county in which your home is located. Importantly, a homestead declaration cannot be used to prevent the holder of a deed of trust or mortgage from foreclosing on the property.
Are there any catches to the homestead exemption that Nevada provides? Of course! If there weren’t, it wouldn’t be the law! First, as noted above, you have to be using property as your primary residence in order for the homestead exemption to stick. The Nevada Supreme Court has been extremely generous in its interpretation of “primary residence” in the past and has concluded, that, in general, so long as you consider a property in Nevada to be your primary residence, it is extremely difficult for a creditor to convince a court that it isn’t. That having been said, there some properties that probably can’t be protected by a homestead declaration, such as vacation rentals, timeshares, and land without a residence on it. Also, you can only have one property homesteaded at a time because you can only have one primary residence at a time.
Now, you may be thinking, “Yeah, yeah, but I don’t need to be protected from creditors. No one’s coming after me.” Fair enough, except that, if you wait until a creditor files a judgment lien against your house to record your homestead declaration, it’s too late. In order to be effective, you must record the homestead declaration prior to the recording of a judgment. Thus, even if there’s nothing on the horizon right now, it makes sense to record a homestead declaration now, just in case something comes up in the future.
The modern “homestead” declaration may not be as generous as fifty acres and a mule, but it’s still pretty good and, if you are a homeowner, you ought to take advantage of it.
Clifford Gravett lives in Mesquite and is an attorney with Bingham Snow & Caldwell. He is licensed to practice in Nevada, Arizona and Utah. He can be reached at (702) 346-7300, email@example.com, or 840 Pinnacle Court, Suite 202 in Mesquite.