Can a Rented Duplex Qualify for Homestead Protection in Florida?

The answer is no. The homestead protection does not cover the rented portion of a duplex in Florida if the duplex is located in the city.

prior to 1968, the Florida Constitution protected the residence and business house of the owner, but a 1968 amendment deleted the reference to “business house.” Although a minority of prior bankruptcy decisions protected the entire duplex where the units were not divisible, the majority of prior bankruptcy cases denied homestead protection to rental units attached to the residence.

A recent bankruptcy decision in the Middle District of Florida dealt with the claimed exemption of a debtor’s duplex situated within a municipality. The two units are not legally divisible. The bankruptcy court denied homestead protection of the duplex. T

The court recognized that this ruling may force the debtor to lose the house and speculated that the Florida Legislature may not have contemplated this unfortunate result when drafting and enacting the 1968 amendment to the Constitution. Nevertheless, the court found that denial of homestead protection of that part of the property rented for income is mandated by the law.

The ruling may have been different if the debtor’s duplex was located outside a municipality because, as stated above, courts have previously protected businesses on homesteads located in the county.

Secondly, all the cases cited by the bankruptcy court were prior bankruptcy decisions, and state courts may reach a different conclusion when homestead protection of duplexes is considered outside of the bankruptcy context.