Homestead Sweet Homestead? How Code Enforcement Liens Should Be Treated Under the Constitutional Homestead Exemption.

• Author: Walker, Victoria Cecil
• Position: Real Property, Probate and Trust Law

The term "cherry picking" is defined as pointing to data that appears to confirm one's opinion while ignoring contradictory data. (1) The use of this selection method is indeed prevalent in the legal field. One example is in the area of homestead property law. Caselaw regarding the imposition of code enforcement liens against homestead property has long been cherry-picked by those who seek to defeat their imposition. The premise behind the constitutional homestead exemption is to protect what society has deemed most sacred: The home. Concurrently, the competing protection of creditors who impose liens against the homestead is, of course, imperative. This article focuses on the municipal or county code enforcement lien and identify the "cherries" in the caselaw that are often wrongfully interpreted or relied upon in attempts to defeat the lien's validity.

The constitutional provision at issue can be found in Fla. Const. art. X, [section]4, which provides in pertinent part:

(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by the nature person: (1) a homestead ...;

The application of this homestead exemption in the context of code enforcement liens begins with the case of Demura v. County of Volusia, 618 So. 2d 754 (Fla. 5th DCA 1993).

In this case, the appellants filed a quiet title action seeking to remove the county's code enforcement lien they believed was clouding the title of alleged homestead property. (2) The court cited the constitutional provision and F.S. [section]162.09(3), which prohibits the foreclosure of a code enforcement lien on homestead property. (3) The cherry that is often picked from this case is the court's finding that the constitutional provision "goes much farther" than the statute in that "no such lien exists as to such homestead property." (4) While this statement could lead one to conclude that code enforcement liens cannot be imposed or recorded against homestead property, a continued reading of the case shows otherwise.

The court's opinion goes on to explain in the very next sentence that because no such lien can exist on homestead property, the mere recording of the code enforcement board order imposing the lien cannot cloud title on the property. (5) Note, the court did not dispute the recording of the order itself. Thus, when the court said "no such lien exists," the court was referring to the lien's existence in theoretical terms, not literal terms. With that said, the court determined that an action to quiet title was not the proper remedy for removing the cloud as there was no cloud to remove by virtue of the property being homestead, assuming that it was. (6) The court allowed the lien to remain recorded on the property and noted that the better remedy was for appellants to first seek a declaratory judgment that the property was, in fact, homestead property. (7) Once that fact was established, then appellants could sell the property free of the lien as the lien has no effect against subsequent purchasers. (8) However, if appellants failed to invest the proceeds of the sale into another homestead within a reasonable period of time, those proceeds would lose homestead protection and, thus, could be reached by the county to satisfy the lien. (9) Conversely, if appellants retained ownership of the property, but the property lost its homestead status, then the code enforcement board order that was recorded could be enforced as a lien against the property. (10)

To put it simply, the Demura court opined that a code enforcement lien recorded against homestead property theoretically ceases to exist, and is, thus, unenforceable, unless homestead protection ceases to exist. Once that happens, the recorded lien becomes enforceable. It's important to note the court did not rule that if the property is indeed homestead, then the county's recorded lien should be released.

The Florida Supreme Court would later uphold this rule of law in Ilkanic v. City of Ft. Lauderdale, 705 So. 2d 1371 (Fla. 1998), and cite Demura for the proposition that the homestead exemption only prohibits the forced sale of homestead property and does not prohibit the imposition of a lien. The court applied Demura to the...