What are My Homestead Rights?

Illinois law established your homestead rights with 735 ILCS 5/12-901, which reads as follows:

Every individual is entitled to an estate of homestead to the extent in value of $15,000 of his or her interest in a farm or lot of land and buildings thereon, a condominium, or personal property, owned or rightly possessed by lease or otherwise and occupied by him or her as a residence, or in a cooperative that owns property that the individual uses as a residence. That homestead and all right in and title to that homestead is exempt from attachment, judgment, levy, or judgment sale for the payment of his or her debts or other purposes and from the laws of conveyance, descent, and legacy, except as provided in this Code or in Section 20-6 of the Probate Act of 1975. This Section is not applicable between joint tenants or tenants in common but it is applicable as to any creditors of those persons. If 2 or more individuals own property that is exempt as a homestead, the value of the exemption of each individual may not exceed his or her proportionate share of $30,000 based upon percentage of ownership.

What the heck does that mean? Well, if you own or lease a property as your principal residence and live in that property, you have a homestead right in that property. This right protects you, even if you don't hold title to the property, from the actions of your title-holding spouse. Meaning your spouse can't sell or mortgage the house out from under you if you get into a fight.

Even if you are not on title to your marital residence, your individual homestead right is worth half your spouse's right, so $7,500. A married/civil union couple can claim up to $15,000 of tax credits in the property taxes via their homestead rights. Additionally, they can protect $15,000 each in equity from debtors, so up to $30,000 for a married/civil union couple. Your lender will require you to waive your homestead rights when you sign a mortgage. This is not unusual. The lender is reserving its right to collect the full amount of the outstanding loan balance in a potential foreclosure case.

If you have questions about your homestead exemption or any other real estate matters, please do not hesitate to contact me.