As most creditor’s discover, Texas homestead laws can be,
well, complicated. The basic rule is sound: a debtor and his/her family can
have only one Texas homestead. But when the debtor owns more than one piece of real
property, or the debtor and his/her spouse own multiple pieces of real
property, how can the creditor determine which property is the homestead under
Texas law?
There are always a few exceptions, but in general, section
41.005 of the Texas Property Code governs the debtor’s voluntary homestead
designation. Essentially, the debtor
must file a signed designation, acknowledged in the manner required for
recording instruments, in the real property or official records of the Texas county
in which all or part of the property is located. The designation must contain
certain information, particularly a description sufficient to identify the
property designated as homestead. See
Tex. Prop. Code § 41.005(c). It is always advisable for a creditor to check the
official records held by the County Clerk’s office to determine whether any
instrument filed in that county meets the statutory criteria for designation of
the debtor’s homestead.
Alternatively,
the debtor may file an application for homestead exemption with the appraisal
district for the county in Texas in which the property is located. See Tex. Prop. Code §
41.005(e). However, where the debtor has designated one property using this
method and has also designated another property as his homestead by filing that
instrument in the county clerk’s official records, the designation filed in the
Texas official real property records will prevail over the debtor’s application for tax
exemption. See Tex. Prop. Code § 41.005(e).
Article by Cynthia Veidt, Austin Attorney
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