Besides clarifying several long-standing ambiguities in the law which I wrote about last month, the new law contains a number of new, very consumer-friendly sections. In addition to creating an automatic homestead exemption for all homeowners in the amount of $125,000, the new bill also protects the proceeds of the sale of a home that was covered by a homestead. Here's what the bill says:
Section 8. (a) If a home that is subject to an estate of homestead is sold, whether voluntarily or involuntarily, taken or damaged by fire or other casualty, then the proceeds received on account of any such sale, taking or damage shall be entitled to the protection of this chapter during the following periods:
(1) in the event of a sale, whether voluntary or involuntary, or a taking, for a period ending on the date on which the person benefited by the homestead either acquires another home the person intends to occupy as a principal residence or 1 year after the date on which the sale or taking occurred, whichever first occurs; and
(2) in the event of a fire or other casualty, for a period ending on: ( i ) the date upon which the reconstruction or repair to the home is completed or the date on which the person benefited by the homestead acquires another home the person intends to occupy as a principal residence; or (ii) 2 years after the date of the fire or other casualty, whichever first occurs.