A Florida homestead, once established, may be abandoned in which event the property’s homestead protection from creditors is lost. There are many Florida court cases which have discussed the tests of whether an owner has “abandoned” their homestead. Temporary absence or a forced absence from a homestead generally is not abandonment. One important abandonment test is whether the homestead owner has rented the house under a long-term lease to a third party. Rental is consistent with abandonment.
Two Florida attorneys wrote an interesting article in the current Florida Bar Journal about rental and homestead abandonment. The authors discussed how renting a homestead affects the owner’s homestead tax deduction. Their article equally is relevant to renting and homestead abandonment for creditor protection.
The article points out that Florida statutes include a “rental statute” that states that the rental of an entire dwelling constitutes an abandonment of the right of homestead. The authors distinguish the definition of rental from the legal concept of “license”. They argue that the rental statute is not triggered when an owner permits a third party to use a homestead pursuant to a license and where no residential tenancy is created. When a property is rented, they state, the lessee has an exclusive right of use and possession for a period of time. Licenses permit use but they are revocable upon short notice and reserve the owner a co-terminus right of entry and possession.
The authors argue that a homestead owner could move away from his homestead and grant a third party a license to use the property without causing legal abandonment pursuant to the rental statute. They suggests using a license agreement that clearly disclaims the creation of a tenancy. Florida residents who want to “rent” their homestead during a temporary absence might consider asking an attorney to draft a license agreement in lieu of a standard residential lease if they are concerned about maintaining homestead creditor protection during their absence.