Long reach of Massachusetts homestead law

The November 7, 2016 issue of Massachusetts Lawyers Weekly reports on a bankruptcy court decision that construed the automatic homestead exemption under Massachusetts law to extend to property outside the Commonwealth. In Re: Paul Reynolds St. James involved a man who filed Chapter 7 bankruptcy in Massachusetts. The debtor rented property in Massachusetts, but owned a condominium in Florida and at an evidentiary hearing, asserted that he intended to make the Florida condo his personal residence. Because he owned no real estate in Massachusetts, the debtor had never recorded a declaration of homestead at a registry of deeds.

The Bankruptcy judge ruled that when the Massachusetts legislature enacted the automatic homestead in 2011, there was nothing in the statute that limited its usage to real estate in Massachusetts. The judge held that this silence as to the statute's extraterritorial application, plus the Supreme Judicial Court's general rule that ambiguities in homestead law should be resolved in favor of the debtor, led him to conclude the Massachusetts automatic homestead could be used to protect real estate outside of Massachusetts from creditors, provided the debtor could prove that he either used or intended to use the out-of-state property as his primary residents.

The bankruptcy trustee disagreed with the decision and is contemplating an appeal.