38-41-201. Homestead exemption - definitions.
(1) Every homestead in the state of Colorado shall be exempt from execution and attachment arising from any debt, contract, or civil obligation not exceeding in actual cash value in excess of any liens or encumbrances on the homesteaded property in existence at the time of any levy of execution thereon:
(a) The sum of seventy-five thousand dollars if the homestead is occupied as a home by an owner thereof or an owner's family; or
(b) The sum of one hundred five thousand dollars if the homestead is occupied as a home by an elderly or disabled owner, an elderly or disabled spouse of an owner, or an elderly or disabled dependent of an owner.
(2) As used in this section, unless the context otherwise requires:
(a) "Disabled owner", "disabled spouse", or "disabled dependent" means an owner, spouse, or dependent who has a physical or mental impairment that is disabling and that, because of other factors such as age, training, experience, or social setting, substantially precludes the owner, spouse, or dependent from engaging in a useful occupation, as a homemaker, a wage earner, or a self-employed person in any employment that exists in the community and for which he or she has competence.
(b) "Elderly owner", "elderly spouse", or "elderly dependent" means an owner, spouse, or dependent who is sixty years of age or older.
Source: R.S. p. 385, 57. G.L. 1343. G.S. 1631. R.S. 08: 2950. C.L. 5924. CSA: C. 93, 23. L. 51: p. 522, 1. CRS 53: 77-3-1. C.R.S. 1963: 77-3-1. L. 73: p. 916, 2. L. 75: Entire section R&RE, p. 1444, 1, effective July 14. L. 81: Entire section amended, p. 1828, 1, effective May 21. L. 91: Entire section amended, p. 384, 6, effective May 1. L. 2000: Entire section amended, p. 717, 3, effective May 23. L. 2007: Entire section amended, p. 879, 7, effective May 14. L. 2015: (1) amended, (SB 15-283), ch. 301, p. 1241, 6, effective July 1.
Cross references: For the legislative declaration in the 2007 act amending this section, see section 1 of chapter 226, Session Laws of Colorado 2007.
The unambiguous language of subsection (1) dictates that it applies only to real property located within this state. Thus, debtors cannot use the statute to exempt their home in another state. In re Withington, 594 B.R. 696 (Bankr. D. Colo. 2018).
I. General Consideration.
II. Effect of Exemption.
I. GENERAL CONSIDERATION.
Law reviews. For article, "Executions and Levies on Tangible Property", see 27 Dicta 143 (1950). For note, "A Discussion of Garnishment and Its Exemptions", see 27 Dicta 453 (1950). For note, "Colorado Homestead Now Assertable Against Heirs", see 25 Rocky Mt. L. Rev. 84 (1952). For article, "Trusts and Estates", see 30 Dicta 435 (1953). For note, "The Homestead Rights of Minor Children in Solvent Estates", see 25 Rocky Mt. L. Rev. 370 (1953). For article, "Marital Property Interests", see 27 Rocky Mt. L. Rev. 180 (1955). For article, "Homestead v. Mechanic's Lien", see 40 Den. L. Ctr. J. 2 (1963). For comment, "The Effect of Certified Realty on Mortgage Foreclosure in Colorado", see 52 U. Colo. L. Rev. 301 (1981). For comment, "The Effect of Certified Realty Corp. v. Smith on Mortgage Foreclosure in Colorado", see 52 U. Colo. L. Rev. 301 (1981). For article, "Election to Sue on a Mortgage Note in Lieu of Foreclosure", which discusses avoidance of judgment liens in bankruptcy, see 13 Colo. Law. 621 (1984). For article, "The Statutory Right of Redemption from Foreclosures", which discusses how the statutory right of redemption from foreclosures is modified by the homestead exemptions, see 13 Colo. Law. 793 (1984). For article, "Colorado Homestead Statutes: Exemption or Allowance?", see 17 Colo. Law. 827 (1988).
Constitutionality. This section does not violate the uniformity clause of 8 of art. VIII, U.S. Const. or supremacy clause, art. VI, cl. 2, U.S. Const. In re Parrish, 19 B.R. 331 (Bankr. D. Colo. 1982); In re Robinson, 44 B.R. 292 (Bankr. D. Colo. 1984).
Primary purpose of article is to place the property designated as a homestead out of the reach of creditors while occupied as a home, and this is so even though the designation of the property as a homestead occurred after the debt was contracted and immediately before the creditor had attached or levied upon the property, and though the debtor had no other property liable for his debt. Barnett v. Knight, 7 Colo. 365, 3 P. 747 (1884); Haas v. De Laney, 165 F. Supp. 488 (D. Colo. 1958).
The design of this section is to secure to the householder a home for himself and family, regardless of his financial condition, whether solvent or insolvent. Woodward v. People's Nat'l Bank, 2 Colo. App. 369, 31 P. 184 (1892); In re Nye, 133 F. 33 (8th Cir. 1904).
The policy of the state is to preserve the home to the family, even at the sacrifice of just demands, for the reason that the preservation of the home is deemed of paramount importance. McPhee v. O'Rourke, 10 Colo. 301, 15 P. 420 (1887); Univ. Nat. Bank v. Harsh, 833 P.2d 846 (Colo. App. 1992).
Spirit of homestead laws preserves right of occupancy. The spirit and the letter of our homestead laws preserve a right of occupancy for those who stand in the relation of head of the family. In re Wallace's Estate, 125 Colo. 584, 246 P.2d 894 (1952).
Two governing principles underlie all homestead legislation: First, the beneficient design of protecting the citizen householder and his family from the dangers and miseries of destitution consequent upon business reverses or upon calamities from other causes; and, second, the sound public policy of securing the permanent habitation of the family, and cultivating the local interest, pride, and affection of the individual, so essential to the stability and prosperity of a government. Barnett v. Knight, 7 Colo. 365, 3 P. 747 (1884); Weare v. Johnson, 20 Colo. 363, 38 P. 374 (1894).
Benefits of this section are extended to every householder, without qualification, except as to the value and occupancy. Dallemand v. Mannon, 4 Colo. App. 262, 35 P. 679 (1894).
This section does not create an interest in land. The Colorado homestead has been referred to as an "exemption," and nothing more. United States v. Morgan, 554 F. Supp. 582 (D. Colo. 1982).
Federal tax lien foreclosure not barred. This section does not operate to bar foreclosure of the federal government's tax lien. United States v. Morgan, 554 F. Supp. 582 (D. Colo. 1982).
Scope of protection. This section extends certain protection to the premises set apart by the owner as a homestead for his or her family so long as he or she desires to occupy the same as a home for the family, and it protects the same against proceedings by execution and attachment, but it does not appear that further exemption or protection was intended. Wright v. Whittick, 18 Colo. 54, 31 P. 490 (1892).
The words "arising from any debt, contract, or civil obligation" are sufficiently broad and comprehensive to embrace any and all forms of indebtedness, including judgments. Woodward v. People's Nat'l Bank, 2 Colo. App. 369, 31 P. 184 (1892).
Section does not rest upon equitable principles. In no way does this section rest upon the principles of equity, nor in any way yield thereto. McPhee v. O'Rourke, 10 Colo. 301, 15 P. 420 (1887); Helkey v. Ashley, 113 Colo. 175, 155 P.2d 143 (1945).
Exemption statutes are to be liberally construed, so as to promote the humane policy of such legislation, but the courts cannot by construction annex to such statutes consequences not fairly within their purview or intent. Barnett v. Knight, 7 Colo. 365, 3 P. 747 (1884); McPhee v. O'Rourke, 10 Colo. 301, 15 P. 420 (1887); Martin v. Bond, 14 Colo. 466, 24 P. 326 (1890); Weil v. Nevitt, 18 Colo. 10, 31 P. 487 (1892); Wright v. Whittick, 18 Colo. 54, 31 P. 490 (1892); Brooks v. Black, 22 Colo. App. 49, 123 P. 131 (1912); Haas v. De Laney, 165 F. Supp. 488 (D. Colo. 1958).
The right to homestead exemption is not given by the bankruptcy law, but exists, if at all, by virtue of state laws, and the bankruptcy court will allow whatever exemption the state law allows. Edgington v. Taylor, 270 F. 48 (8th Cir. 1920).
There is only one homestead exemption per a specific piece of real property. In re Lambert, 34 B.R. 41 (Bankr. D. Colo. 1983); In re Pruitt, 829 F.2d 1002 (10th Cir. 1987); In re Bryant, 221 B.R. 262 (Bankr. D. Colo. 1998).
And it attaches to the property. In re Bryant, 221 B.R. 262 (Bankr. D. Colo. 1998).
The homestead exemption may not be claimed by one joint owner to the exclusion of the other joint owners. In re Pruitt, 829 F.2d 1002 (10th Cir. 1987); In re Bryant, 221 B.R. 262 (Bankr. D. Colo. 1998); In re Steinke, 522 B.R. 331 (Bankr. D. Colo. 2014).
Exemption under this section attaches automatically upon occupancy of real property as a home by the owner or the owner's family. Univ. Nat. Bank v. Harsh, 833 P.2d 846 (Colo. App. 1992).
Full homestead exemption is applied before any determination is made with respect to any specific joint owner's equity that may be subject to the claims of creditors in a bankruptcy case. In re Dickinson, 185 B.R. 76 (Bankr. D. Colo. 1995).
Homestead exemption policy applies to leased and owned homes. The public policy of a homestead exemption, to secure to the householder a home for himself and family regardless of financial conditions, whether solvent or insolvent, applies with equal force whether the home is occupied under a lease for a term of years or under a fee ownership. In re Hellman, 474 F. Supp. 348 (D. Colo. 1979).
The homestead exemption is available to homeowners and to nonhomeowners alike. In re Parrish, 19 B.R. 331 (Bankr. D. Colo. 1982).
Who may claim exemption. One who does not have title or any claim to real property does not have a right to claim a homestead exemption on such real property. In re Hambric v. Centennial Glass, Inc., 32 B.R. 49 (Bankr. D. Colo. 1983).
Debtor cannot claim a homestead exemption because he did not own real property. What he received upon the death of his mother was an undivided one-third interest in her probate estate, which happened to include a piece of real property. His rights in the probate estate became the property of the bankruptcy estate and at that time he was not an owner of real property. In addition, neither on the date of the filing of his bankruptcy nor on the date he became entitled to his share of the probate estate did the debtor occupy the real property as his primary residence or home. In re Meachen, 217 B.R. 877 (Bankr. D. Colo. 1998).
Although debtor was part owner of home and persons occupying the home were his family, he was not entitled to claim a homestead exemption since he at no time contributed toward the payment of the mortgage, taxes, insurance, maintenance, or utilities nor did he give any pecuniary consideration for his interest nor did he contribute to living expenses of his family who lived in the home. In re Rodriguez, 38 B.R. 297 (Bankr. D. Colo. 1984).
Bankruptcy debtor was not entitled to claim the exemption where he had only an undivided one-half interest in the property, and his joint tenant was not a bankruptcy debtor. In re Robinson, 44 B.R. 292 (Bankr. D. Colo. 1984).
Debtor entitled to claim only half of homestead exemption in property owned with spouse who did not join in debtor's bankruptcy filing. In re Steinke, 522 B.R. 331 (Bankr. D. Colo. 2014).
Co-defendant entitled to full homestead exemption because the other defendant, a trust, was legally incapable of occupying the residence and claiming the exemption. Univ. Nat. Bank v. Harsh, 833 P.2d 846 (Colo. App. 1992).
Former husband, as a co-owner of the property, entitled to half of homestead exemption even though he no longer resided in the property. In re Dickinson, 185 B.R. 76 (Bankr. D. Colo. 1995).
Married individuals living apart in jointly owned properties are each entitled to claim a homestead as exempt. The filing of a joint petition in bankruptcy, however, effected a severance in the joint tenancy of the debtors in each of the properties, with the result that an undivided one-half interest in the husband's estate became the property of the wife, which property became property of the wife's bankruptcy estate, and vice versa. Thus the trustee is entitled to one-half of the homestead exemption and one-half of the remaining equity in each property. In re Pastrana, 216 B.R. 948 (Bankr. D. Colo. 1998).
Exemption need not be prorated among two or more cotenants where there is no danger that full protection will be claimed by one joint owner-occupant to the exclusion of other owner-occupants. Univ. Nat. Bank v. Harsh, 833 P.2d 846 (Colo. App. 1992).
Pre-paid rents and security deposits. The homestead exemption applies to pre-paid rents and to security deposits which can be applied to rent. In re Quintana, 28 B.R. 269 (Bankr. D. Colo. 1983).
Liens used to calculate exemption. In determining which liens will be used to calculate a homestead exemption, the court uses only those liens or encumbrances which existed prior to the placement of the homestead right on the property, which exemption is established automatically from the date of the property owner's occupancy (except with respect to liens which arose prior to July 1, 1975), and liens with respect to which the debtor has expressly waived the homestead exemption. Lincoln v. Cherry Creek Homeowners Ass'n, 30 B.R. 905 (Bankr. D. Colo. 1983).
Attorney's liens. Homestead exemption statute includes attorney's liens within its ambit and the attorney's lien does not attach to the homestead. If the debtor has any net equity remaining after the sale of the property in question, the creditor's attorney's lien attaches to that net equity and his claim is unsecured for any amount over that sum. In re Dickinson, 185 B.R. 840 (Bankr. D. Colo. 1995).
Attorney's charging lien under former 12-5-119 (now 13-93-114) is not subject to a homestead exemption that may be claimed upon sale proceeds of an exempt homestead under this section or 38-41-207. A proceeding to enforce an attorney's charging lien is not a levy upon property under either a writ of execution or a writ of attachment. In re Benbow, 496 B.R. 605 (Bankr. D. Colo. 2013).
A debtor may not claim any portion of the proceeds from any real property to which an attorney's charging lien attaches as exempt property under the Colorado homestead exemption. In re Benbow, 496 B.R. 605 (Bankr. D. Colo. 2013).
Full exemption attached to residence of widow who owned an undivided one-half interest in property where remainder of property was owned by her deceased husband's trust, and trust was legally incapable of occupying the residence and claiming the exemption. Univ. Nat. Bank v. Harsh, 833 P.2d 846 (Colo. App. 1992).
Homeowner exemption applies to debtor who owned and occupied the residence at time of filing bankruptcy, despite her simultaneous plans to move from residence. In re Raymond, 132 B.R. 53 (Bankr. D. Colo. 1991).
Debtor could not claim homestead exemption where he and his wife did not show that they had ever occupied the property, he was incarcerated in another state, and his wife resided in that other state, despite the couple's stated "vague intention to return" after debtor's release from prison. Old Republic Nat'l Title Ins. v. Kornegay, 2012 COA 140, 292 P.3d 1111.
Debtor's truck is not a homestead within the meaning of subsection (1)(a). The truck is not associated with land. It is not permanently or semipermanently installed on real property. It is not located in a residential area or mobile home park. Instead, it was designed to be self-propelled and move. The debtor and the truck are on the road in long-distance hauling operations throughout the country twenty to twenty-five days per month. Since most of the debtor's business is outside of the state, the debtor and the truck typically are in the state only four or five days each month. In re Romero, 533 B.R. 807 (Bankr. D. Colo. 2015), aff'd, 579 B.R. 551 (D. Colo. 2016).
Debtor's recreational vehicle is a motor home, not a manufactured home, and is not subject to the protections of the homestead exemption. In re Galvin, 583 B.R. 262 (Bankr. D. Colo. 2018).
Equity in duplex. The rental part of a duplex does not impair the owner's right to exempt the equity in the entire structure, and the debtor is entitled to claim any equity in the property considered as a whole. Wells v. West Greeley Nat. Bank, 29 B.R. 688 (Bankr. D. Colo. 1983).
Waiver in deed of trust not waiver to all creditors. The waiver of the homestead right contained in a deed of trust does not constitute a waiver to all creditors. Frank v. First Nat. Bank, 653 P.2d 748 (Colo. App. 1982).
Condominium owner waived right to assert homestead exemption prior to a condominium association's assessment lien due to a condominium declaration which was in existence before owner took title. Whispering Pines W. Condo. v. Treantos, 780 P.2d 26 (Colo. App. 1989).
Junior lien creditor may redeem from a public trustee's sale without complying with the homestead exemption statute. Howell v. Farrish, 725 P.2d 9 (Colo. App. 1986).
Applied in Drake v. Root, 2 Colo. 685 (1875); In re Youngstrom, 153 F. 98 (8th Cir. 1907); Jasper v. Bicknell, 68 Colo. 308, 191 P. 115 (1920); Whitlock v. Alliance Coal Co., 73 Colo. 205, 214 P. 546 (1923); Vassek v. Moffat County Mercantile Co., 87 Colo. 153, 285 P. 939 (1930); Craig Lumber Co. v. Ramey, 108 Colo. 516, 119 P.2d 608 (1941); Wise v. Thomas, 117 Colo. 376, 188 P.2d 444 (1947); Michels v. Clemens, 140 Colo. 82, 342 P.2d 693 (1959); Thomas v. Hysom, 167 Colo. 218, 446 P.2d 911 (1968).
II. EFFECT OF EXEMPTION.
When property exempted from levy of execution. If the property in question has not been subjected specifically to the judgment lien by the levy of an execution before it was withdrawn as a homestead, it was exempted from the levy of the execution. To construe the statute otherwise would defeat its obvious intention. Woodward v. People's Nat'l Bank, 2 Colo. App. 369, 31 P. 184 (1892); Patterson v. Serafini, 187 Colo. 209, 532 P.2d 965 (1974).
Homestead exempt from judgment lien. This section provides that the homestead shall be exempt from "execution and attachment", and if it is exempt from execution, it must of necessity be exempt from the lien of the judgment, as a judgment lien that cannot be enforced is of no avail. Woodward v. People's Nat'l Bank, 2 Colo. App. 369, 31 P. 184 (1892); Weare v. Johnson, 20 Colo. 363, 38 P. 374 (1894); Jones v. Olson, 17 Colo. App. 144, 67 P. 349 (1902); White v. Hartman, 26 Colo. App. 475, 145 P. 716 (1915); Sterling Nat'l Bank v. Francis, 78 Colo. 204, 240 P. 945 (1925); City Center Nat. Bank v. Barone, 807 P.2d 1251 (Colo. App. 1991).
Section operable against creditor for material used to improve property. There is no proviso in this section against its operating against a creditor for material used in improvements upon the property before it was designated as a homestead. McPhee v. O'Rourke, 10 Colo. 301, 15 P. 420, 3 Am. St. R. 579 (1887).
Void deed will not invalidate homestead entry as exemption. That the deed from husband to wife, upon the record of which she makes a homestead entry, was, as to creditors, fraudulent and void, is no defense to, and will not avoid the validity or efficiency of, such homestead entry as an exemption, is forever settled in this state. McPhee v. O'Rourke, 10 Colo. 301, 15 P. 420 (1887); Tibbetts v. Terrill, 44 Colo. 94, 96 P. 978, 104 P. 605 (1908); Brooks v. Black, 22 Colo. App. 49, 123 P. 131 (1912).
Trustee in bankruptcy in same position as creditor. As regards the sale of real property belonging to a bankrupt, the trustee in bankruptcy is in the same position as a creditor, and must comply with state law so far as is necessary to preserve the state exemption which is guaranteed the bankrupt. Baker v. Allen, 34 Colo. App. 363, 528 P.2d 922 (1974).
If bank could not assert a lien against the property while party retained title, it cannot assert the same lien against party's grantees, provided the transaction was bona fide. City Ctr. Nat. Bank v. Barone, 807 P.2d 1251 (Colo. App. 1991).