Oklahoma Homestead Rights
Homestead rights have been an Oklahoma staple since before statehood and they play an every-day role for real estate transactions. This is the prime reason that spouses must sign on mortgages, deeds, etc. for property located in the State of Oklahoma.
At their most fundamental, Homestead Rights are a set of legal protections designed to safeguard a family’s primary residence from creditors in the event of financial hardship. Homestead rights in Oklahoma are outlined in Article 12 (Forced Sale Exemption) and Article 12-A (Ad Valorem Tax Exemption). Under Oklahoma law, there are actually three (3) individual rights we associate with the term “Homestead Rights:”
(1) Probate Homestead Right
One of the largest homestead rights allows a surviving spouse to remain in the homestead after the death of their spouse. This is codified in 58 O.S. Section 311 wherein it states “Upon the death of either husband or wife, the survivor may continue to possess and occupy the whole homestead, which shall not in any event be subject to administration proceedings, except as in this title provided . . . “ Essentially, this prevents a deceased spouses’ heirs from disposing of the property while a surviving spouse is still alive. Further, 58 O.S. 313 provides that any debts or liability contracted by the married couple cannot be executed against the homestead (unless they are secured claims or claims with collateral like a mortgage).
(2) Ad Valorem Tax Exemption
Oklahoma Law also provides for a Homestead Tax Exemption. There are many different requirements and exceptions to this exemption, but the main points are that 75% of the total square footage must be claimed as a homeowner’s principal residence. The residence can be up to 1 acre in an urban area and up to 160 acres in a rural area (to better protect farms). Finally, this exemption usually amounts to around $1000.00 dollars (but that is subject to change based on county).
*As a side note, homestead rights can also be claimed in bankruptcy proceeds and thereby exempting the residential homestead from creditors. However, if there is a mortgage on the property, exempting the property from bankruptcy DOES NOT exempt it some the mortgage and mortgage payments or foreclosure would resume.
(3) Alienation of Homestead
Found in Article 12 Section 2 of the State Constitution and Codified as 16 O.S. Section 4(a) and subsequent:
“No deed, mortgage, or conveyance of real estate . . . shall be valid unless in writing and subscribed by the grantors . . . No deed, mortgage, or contract affecting the homestead exempt by law . . . shall be valid unless in writing and subscribed by both husband and wife . . .”
This places a requirement that all documents encumbering or transferring an interest in a homestead property to be executed and signed by both spouses. In effect, this law prevents the forced sale of a property for the debts of just one spouse. Further, Oklahoma Case Law has followed this rule exactly in many, many cases: Montgomery v. Wise, 179 Okla. 247; Standard Savings & Loan Ass’n v. Acton, 178 Okla. 400; Atkinson v. Barr, 1967 OK 103 just to name a few.
It also be held by Oklahoma Courts that a document executed by only one spouse is Void ab inito (a fancy legal term that means invalid from the beginning) and therefore, it cannot be relied upon in any legal context. Further, Standard S&L Ass’n v. Acton also provides explicitly states that a husband, who profited from and who had knowledge of a mortgage signed only by the wife, was not stopped from declaring the mortgage void. The Court stated “in the absence of showing that Acton participated in this transaction. . . his mere acceptance from his wife at various times of a portion of the proceeds of the loan is not sufficient to constitute ratification or adoption [of the underlying mortgage].”
CONCLUSION
If you have questions regarding homestead rights in Oklahoma, please give us a call. We have handled quite our share of homestead issues and we would gladly assist you in defending your homestead rights!