[CLBS] float home/homestead

Thu Jul 18 10:11:28 MDT 2013

I am just not sure I can get any more insightful than I just did.  Need a deep thinker and a good writer.  

-----Original Message-----
From: Matthew T. Christensen [mailto:mtc at Angstman.com] 
Sent: Thursday, July 18, 2013 10:10 AM
To: Randal French; Catherine Dullea; clbs at admws.idaho.gov
Subject: RE: [CLBS] float home/homestead

As an "insightful practitioner" himself - sounds like Randy just volunteered to write an article for the newsletter.  :)

MTC

Matthew T. Christensen
Attorney and Counselor at Law

ANGSTMAN JOHNSON 
Attorneys and Counselors
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-----Original Message-----
From: CLBS [mailto:clbs-bounces at admws.idaho.gov] On Behalf Of Randal French
Sent: Thursday, July 18, 2013 10:06
To: Catherine Dullea; clbs at admws.idaho.gov
Subject: Re: [CLBS] float home/homestead

Very tough questions.  Look at the decisions allowing a homestead exemption on a mobile home, Rogers, 225 BR 755 (Bankr. D. Idaho 1998) and a motor home, Peters, 168 BR 710 (Bankr. D. Idaho 1994) for guidance as to exempting a homestead without a legal description.  I think those decisions rested on the debtor actually occupying the mobile home or motor home, not intending to reside there later.

If Debtor does not occupy the property, then the Debtor would seem to need the equivalent of the filing of a notice of declaration of homestead identifying the intent to reside on the homesteaded property.  I.C. 55-1004.  That also references a homestead declaration for a mobile home located on land not owned by debtor, and allows a homestead from and after delivery of a declaration as described in section 55-1006.  55-1006 still calls for recording, not delivery, of a homestead declaration.

You might look at other states whether people may more commonly live on houseboats, like Calif and Florida, maybe Washington and Oregon.  That might provide some insight.

Even if you can exempt the floathome, the trustee may demand the rents.  Gugino has done so in this area.  If you could rather quickly get the property abandoned, §554, that might limit the damage.  The trustee may oppose that effort because even though the exempted asset is of inconsequential value to the estate, §554(a), the rents are of value.  An argument may be that after the time period for objecting to a claim of exemption runs, if there is no objection, then should the property be considered "removed" from the estate, as I recall some courts having characterized the effect of an exemption.  The problem is that the assets may be removed from the estate only to the extent that the equity in the asset is less than the amount of the exemption.  You can exempt a home and have no objection to the exemption, but if there is equity above the exempt amount the trustee can still sell the home and keep equity above the exemption.  That being the case, it is hard to say that the 
 asset, as opposed to the exempt equity, was removed from the estate.

If the estate does not assume the lease within the statutory time, the lease is deemed rejected.  365(d)(1).  Leases of real property includes any rental agreement, §365(m), presumably including a month to month agreement.  Is there an argument that a trustee should be prohibited from receiving rent from a rejected lease agreement?  Does the inclusion in 541(a)(6) of rents of or from property of the estate provide an independent basis for collecting rents even if the lease is rejected?  Sounds like a basis for a good article for the bk section newsletter for an insightful practitioner.

Good luck.

-----Original Message-----
From: CLBS [mailto:clbs-bounces at admws.idaho.gov] On Behalf Of Catherine Dullea
Sent: Tuesday, July 16, 2013 3:35 PM
To: 'Bankruptcy list'
Subject: [CLBS] float home/homestead

Listmates:
Potential chapter 7 client owns a "float home".  It is not a boat, it's a house that floats and it is relatively permanently moored at a marina.  It is hooked up to sewer, water, electricity, phone, etc.  Client doesn't currently live in the float home and has it rented out.  He does intend to live there again, and if it were real property I'd know just how to protect it, with a recorded homestead declaration.  But he doesn't own the real property and I don't think the Kootenai County Recorder would record a homestead declaration without a legal description.  

1.    How do I protect this asset as his homestead without him having to
evict his tenants and move back in?
2.    If I can do that, is the Trustee entitled to the rent he's collecting?
If so, for how long?

--Katie Dullea

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