Homestead Protection in Massachusetts

Under Massachusetts Law effective in 2011, every homeowner is granted an "automatic homestead exemption" that protects up to $125,000 of equity value in the home. Read full text of homestead law.

If the homeowner "declares a homestead." the exemption amount is $500,000.

Section 5 of the new law sets out the requirements for declaring a homestead. The Homestead Declaration must by signed and acknowledged under penalty of perjury by each home owner who will be benefited by the homestead. The written declaration must contain the following information:
(1) each owner to be benefited by the homestead, and the owner’s non-titled spouse, if any, shall be identified;
(2) the declaration shall state that each person named therein occupies or intends to occupy the home as their principal residence;
(3) if the home is co-owned by a married couple, whether in their names only or as co-tenants with others, and the home is the principal residence or is intended to be the principal residence of both spouses, a declaration under section 3 shall be executed by both spouses; and
(4) if the home is owned in trust, only the trustee shall execute the declaration.

If you have already declared a Homestead that satisfied the old law, your existing Declaration is not affected by the new law. "All existing estates of homestead in effect on the effective date of this act shall continue in full force and effect notwithstanding the repeal of" the old law.

However, your existing homestead should be reviewed to make sure it provides protection to you, and all members of your family. The new law has specific points that address home ownership and personal and family circumstances such as disability and marriage. Call us if you would like to review your circumstances as they apply to the new law.

Section 3 of the new law explains the circumstances that do not protect the home from attachment, seizure, judgment and levy. As in the past, the Homestead declaration does not exempt the homeowner from the mortgage on the home itself. Taxes, liens recorded before the homestead was created, and court judgments involving support and other circumstances are also not covered. Read text of Section 3 for the list of situations not covered by a Homestead Declaration.

In all mortgage transactions occurring after March 15, 2011, the closing attorney or settlement agent must provide the mortgagor with notice of the right to declare homestead protection, receipt of which shall be acknowledged in writing by the mortgagor. The notice shall include, but not be limited to, a summary of the differences between the automatic homestead protection and the enhanced benefits acquired by making a declaration of homestead.

It will no longer be possible to declare a Homestead Exemption as part of the deed document that is recorded when you buy a house. The law requires that a separate document be filed. The Registries of Deeds charge a filing fee of $35 to record each Declaration document.

Section 4 of the new Homestead law explains how creditors can loan money to people, and require that the borrower "subordinate" their Homestead protection. The subordinated loan cannot exceed $20,000, and the loan agreement must contain a written acknowledgement that the borrower understands they are giving up the homestead protection. These waivers of protection cannot be used by credit card companies or loans made in anticipation of a paycheck, tax refund or insurance settlement.