BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 433|
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CONSENT
Bill No: SB 433
Author: Harman (R)
Amended: 4/10/07
Vote: 21
SENATE JUDICIARY COMMITTEE : 5-0, 3/27/07
AYES: Corbett, Harman, Ackerman, Kuehl, Steinberg
SUBJECT : Homestead exemptions
SOURCE : Conference of Delegates of California Bar
Associations
DIGEST : This bill extends the automatic homestead
exemption to cases where the judgment debtors separated or
former spouse, but not the debtor himself or herself,
resides in the homestead, until the entry of judgment or
legally enforceable agreement dividing the community
property.
ANALYSIS : Existing law requires the Legislature to
protect, by law, a certain portion of the homestead and
other property, from forced sale.
Existing law contains both an automatic and a declared
homestead exemption that serve to protect a portion of
equity in a debtor's home from creditors.
Existing law states that the automatic homestead exemption
applies to the principal dwelling in which the judgment
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debtor, or spouse, continuously resided from the date of
attachment of the judgment creditor's lien until a court
determination that the dwelling is a homestead.
Existing law protects dwellings that qualify under the
automatic homestead exemption by:
1.Exempting them from a court ordered sale, provided that
criteria relating to the amount received are not met.
2.Exempting proceeds of a forced lien sale, or the value
received from damage, destruction, or acquisition for
public use, in the amount of the homestead exemption.
Existing law provides that if the judgment debtor and their
spouse reside in separate homesteads, only one of the
homesteads is exempt. Existing law states that "spouse"
does not include a married person upon an entry of judgment
of legal separation, unless those persons reside in the
same dwelling.
This bill entitles a judgment debtor, not currently
residing in the homestead, to an automatic homestead
exemption if their separated or former spouse continues to
reside and exercise control over possession of the
homestead. This bill ends that entitlement upon the entry
of judgment or other legally enforceable agreement dividing
the community property between the judgment debtor and the
separated or former spouse, or as specified by court order.
This bill specifies that nothing in this bill shall entitle
the judgment debtor to more than one exempt homestead.
Notwithstanding subdivision (d) of Section 704.710, for
purposes of this article, "spouse" may include a separated
or former spouse consistent with this subdivision.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 4/10/07)
Conference of Delegates of California Bar Associations
(source)
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ARGUMENTS IN SUPPORT : According to the author's office,
when spouses decide to either separate, or to seek a
divorce, one spouse often moves out, while the other
continues to reside in the family residence. Pursuant to
Section 704.710 of the Code of Civil Procedure, the
automatic homestead exemption only applies when the
judgment debtor, or spouse, has continuously resided in the
dwelling from the time of attachment of the creditor's lien
to the court determination that the dwelling is a
homestead. The author maintains that:
. . . the "out-spouse" loses his or her entitlement to
an exemption . . . upon entry of a judgment of
legal separation because they are no longer physically
living in the dwelling. In many cases, the division of
community property does not occur until well after
entry of a judgment decreeing legal separation or
dissolution of the marriage. It is unfair to the
spouse that is not residing in the property to have
their homestead rights terminated even though they
continue to have a community property ownership
interest in the dwelling. This result is particularly
unfair where the judgment debtor has vacated the
property in order to avoid physical abuse.
The Conference of Delegates of California Bar Association
writes, "In most cases where spouses separate or are in
the process of obtaining a divorce, one spouse vacates
the family residence and the other spouse continues to
occupy the property. Under subsection (d) of this
statute, however, the 'out-spouse' loses his or her
entitlement to an exemption under this Article upon entry
of a judgment of legal separation because they are no
longer physically living in the dwelling. In many cases,
the division of community property does not occur until
well after entry of the judgment decreeing legal
separation or dissolution of the marriage. It is unfair
to the spouse that is not residing in the property to
have their homestead rights terminated even though they
continue to have a community property ownership interest
in the dwelling. This result is particularly unfair
where the judgment debtor has vacated the property in
order to avoid physical abuse."
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RJG:cm 4/10/07 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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