{"id":3229,"date":"2020-09-03T17:41:00","date_gmt":"2020-09-03T17:41:00","guid":{"rendered":"https:\/\/socal.law\/?p=3229"},"modified":"2022-06-21T23:12:04","modified_gmt":"2022-06-21T23:12:04","slug":"california-bill-to-substantially-increase-the-homestead-exemption-goes-to-governor-newsom-for-signing-ab-1885","status":"publish","type":"post","link":"https:\/\/socal.law\/california-bill-to-substantially-increase-the-homestead-exemption-goes-to-governor-newsom-for-signing-ab-1885\/","title":{"rendered":"California Bill to Substantially Increase the Homestead Exemption Goes to Governor Newsom for Signing (AB 1885)"},"content":{"rendered":"\n<p>With all the craziness around eviction moratoriums, COVID-19, and election politics dominating the headlines, the California legislature quietly passed&nbsp;<a href=\"https:\/\/legiscan.com\/CA\/text\/AB1885\/2019\">AB 1885<\/a>&nbsp;(its Senate Corollary was&nbsp;<a href=\"https:\/\/leginfo.legislature.ca.gov\/faces\/billTextClient.xhtml?bill_id=201720180SB832\">SB 832<\/a>)&nbsp;<a href=\"https:\/\/legiscan.com\/CA\/research\/AB1885\">on Tuesday, September 2nd<\/a>.&nbsp; AB 1885 increases the California homestead to the greater of $300,000 or the&nbsp;countywide median sale&nbsp;price of a single-family home in&nbsp;the calendar&nbsp;year prior&nbsp;to the year in which the judgement debtor claims the exemption, not to exceed $600,000.&nbsp; &nbsp;As a frame of reference, the following are projections for a few of California\u2019s major metropolitan areas:<\/p>\n\n\n\n<ul><li>San Diego County:&nbsp; $600,000 (estimated $<a href=\"https:\/\/www.zillow.com\/san-diego-county-ca\/home-values\/#:~:text=The%20median%20price%20of%20homes,Carlsbad%20Metro%20median%20of%20%242%2C700.\">628,500<\/a>&nbsp;Median)<\/li><li>Los Angeles County:&nbsp; $600,000 (estimated $<a href=\"https:\/\/www.zillow.com\/los-angeles-county-ca\/home-values\/#:~:text=The%20median%20price%20of%20homes,Anaheim%20Metro%20median%20of%20%243%2C200.\">664,500<\/a>&nbsp;Median)<\/li><li>San Francisco County:&nbsp; $600,000 (estimated $<a href=\"https:\/\/www.zillow.com\/san-francisco-ca\/home-values\/\">1,444,000<\/a>&nbsp;Median)<\/li><li>Riverside County:&nbsp; $<a href=\"https:\/\/www.zillow.com\/riverside-county-ca\/home-values\/\">400,500<\/a><\/li><\/ul>\n\n\n\n<p>The&nbsp;homestead exemption&nbsp;protects&nbsp;the value&nbsp;of a homeowner\u2019s home&nbsp;in&nbsp;the&nbsp;event of a bankruptcy or a judgment creditor enforcing a judgment.&nbsp; The exemption provides that a specified portion of equity in a homestead, as defined, is exempt from the execution to satisfy such debts.&nbsp; However, the exemption does not protect against voluntary liens, such as a deed of trust or even a&nbsp;<a href=\"https:\/\/www.latimes.com\/business\/realestate\/la-fi-associations-20150426-story.html\">homeowner\u2019s association lien<\/a>.&nbsp; In addition,&nbsp;<a href=\"https:\/\/www.sambrotman.com\/blog\/everything-about-tax-liens-2\">federal and state tax liens<\/a>&nbsp;are generally not subject to any homestead protections.&nbsp; Depending&nbsp;on certain characteristics&nbsp;of the homestead\u2019s residents, the law currently prescribes that the amount of the homestead exemption is either $75,000, $100,000 or $175,000\u2014a stark difference from the potential $600,000 exemption now permitted under new AB 1885.<\/p>\n\n\n\n<p>Proponents of AB 1885 argue that the current homestead standards are designed for an era when properties were simply worth less. &nbsp;The California homestead exemption protected almost the full value of a median priced home 45 years ago; but, today the homestead exemption covers barely 15%.&nbsp; Also, many other states with much lower home costs have far higher exemption amounts, with 8 states providing their homeowners with an unlimited exemption.&nbsp; Finally, proponents argue that COVID-19 mandates higher exemptions because a higher exemption will allow for individuals, who would otherwise lose their homes, to access bankruptcy relief during this economic disaster.<\/p>\n\n\n\n<p>Creditors\u2019 rights advocates argue that increasing the homestead exemption six-fold for most Californians is unwarranted and the product of political pandering during a once in a lifetime pandemic.&nbsp; While most opponents do not dispute that the homestead exemptions are outdated, they push for a graduated increase that is less severe and that takes age and disabilities into account.&nbsp;<\/p>\n\n\n\n<p>Regardless of your opinion, this bill is sitting on Governor Newsom\u2019s desk and is expected to be signed into law.&nbsp; If signed, the bill is likely to be effective on January 1, 2021; however, there may be procedural mechanisms for the Governor to make it effective immediately.<\/p>\n\n\n\n<p>If you\u2019d like to weigh in on this signature, now is the time. Send your emails to the governor at&nbsp;<a href=\"mailto:leg.unit@gov.ca.gov\">leg.unit@gov.ca.gov<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>With all the craziness around eviction moratoriums, COVID-19, and election politics dominating the headlines, the California legislature quietly passed\u00a0AB 1885\u00a0(its Senate Corollary was\u00a0SB 832)\u00a0on Tuesday, September 2nd.\u00a0 AB 1885 increases the California homestead to the greater of $300,000 or the\u00a0countywide median sale\u00a0price of a single-family home in\u00a0the calendar\u00a0year prior\u00a0to the year in which the judgement debtor claims the exemption, not to exceed $600,000.\u00a0 \u00a0As a frame of reference, the following are projections for a few of California\u2019s major metropolitan areas:<\/p>\n","protected":false},"author":6,"featured_media":3759,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,37,38],"tags":[60],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - 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SENIOR ATTORNEY, FOUNDER"}]}},"featured_image_src":"https:\/\/socal.law\/wp-content\/uploads\/2020\/09\/craig-marolf-uHwVOiIeS1o-unsplash-scaled.jpg","featured_image_src_square":"https:\/\/socal.law\/wp-content\/uploads\/2020\/09\/craig-marolf-uHwVOiIeS1o-unsplash-scaled.jpg","author_info":{"display_name":"Ajay Gupta","author_link":"https:\/\/socal.law\/author\/ajay-gupta\/"},"rbea_author_info":{"display_name":"Ajay Gupta","author_link":"https:\/\/socal.law\/author\/ajay-gupta\/"},"rbea_excerpt_info":"With all the craziness around eviction moratoriums, COVID-19, and election politics dominating the headlines, the California legislature quietly passed\u00a0AB 1885\u00a0(its Senate Corollary was\u00a0SB 832)\u00a0on Tuesday, September 2nd.\u00a0 AB 1885 increases the California homestead to the greater of $300,000 or the\u00a0countywide median sale\u00a0price of a single-family home in\u00a0the calendar\u00a0year prior\u00a0to the year in which the judgement debtor claims the exemption, not to exceed $600,000.\u00a0 \u00a0As a frame of reference, the following are projections for a few of California\u2019s major metropolitan areas:","category_list":"<a href=\"https:\/\/socal.law\/category\/news\/\" rel=\"category tag\">All Blog Posts<\/a>, <a href=\"https:\/\/socal.law\/category\/corporate-litigation\/\" rel=\"category tag\">Corporate Litigation<\/a>, <a href=\"https:\/\/socal.law\/category\/real-estate\/\" rel=\"category tag\">Real Estate<\/a>","comments_num":"0 comments","_links":{"self":[{"href":"https:\/\/socal.law\/wp-json\/wp\/v2\/posts\/3229"}],"collection":[{"href":"https:\/\/socal.law\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/socal.law\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/socal.law\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/socal.law\/wp-json\/wp\/v2\/comments?post=3229"}],"version-history":[{"count":1,"href":"https:\/\/socal.law\/wp-json\/wp\/v2\/posts\/3229\/revisions"}],"predecessor-version":[{"id":3231,"href":"https:\/\/socal.law\/wp-json\/wp\/v2\/posts\/3229\/revisions\/3231"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/socal.law\/wp-json\/wp\/v2\/media\/3759"}],"wp:attachment":[{"href":"https:\/\/socal.law\/wp-json\/wp\/v2\/media?parent=3229"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/socal.law\/wp-json\/wp\/v2\/categories?post=3229"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/socal.law\/wp-json\/wp\/v2\/tags?post=3229"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}