(1) Exemption from sale; exceptions. Every homestead and the dwellings and buildings used therewith, to a value fixed by the General Assembly but not less than $1,000, to be selected by the owner thereof, or in lieu thereof, at the option of the owner, any lot in a city or town with the dwellings and buildings used thereon, and to the same value, owned and occupied by a resident of the State, shall be exempt from sale under execution or other final process obtained on any debt. But no property shall be exempt from sale for taxes, or for payment of obligations contracted for its purchase.
(2) Exemption for benefit of children. The homestead, after the death of the owner thereof, shall be exempt from the payment of any debt during the minority of the owner's children, or any of them.
(3) Exemption for benefit of surviving spouse. If the owner of a homestead dies, leaving a surviving spouse but no minor children, the homestead shall be exempt from the debts of the owner, and the rents and profits thereof shall inure to the benefit of the surviving spouse until he or she remarries, unless the surviving spouse is the owner of a separate homestead.
(4) Conveyance of homestead. Nothing contained in this Article shall operate to prevent the owner of a homestead from disposing of it by deed, but no deed made by a married owner of a homestead shall be valid without the signature and acknowledgement of his or her spouse.
(1977, c. 80, ss. 1, 2.)
Cross References. - As to exempt property, see G.S. 1C-1601 et seq.
As to conveyances by husband and wife, see G.S. 39-7 et seq.
History Note. - The provisions of subsection (1) of this section are similar to those of Art. X, § 2, Const. 1868. The provisions of subsection (2) are similar to those of Art X, § 3, Const. 1868. The provisions of subsection (3) are similar to those of Art. X, § 5, Const. 1868. The provisions of subsection (4) are similar to those of Art. X, § 8, Const. 1868, as amended in 1944.
Legal Periodicals. - For comment as to whether North Carolina really has a homestead exemption, see 2 Wake Forest Intra. L. Rev. 53 (1966).
For note on the non-purchase security agreement as a relinquishment of the personal property exemption, see 15 Wake Forest L. Rev. 708 (1979).
For article on debtors' exemption rights under the Bankruptcy Reform Act, see 58 N.C.L. Rev. 769 (1980).
For note on enforcement of separation agreements by specific performance, see 16 Wake Forest L. Rev. 117 (1980).
CASE NOTES
I. Homestead Exemption Generally.
II. Exemption for Benefit of Children.
III. Exemption for Benefit of Spouse.
IV. Conveyance of Homestead.
I. HOMESTEAD EXEMPTION GENERALLY.
Editor's Note. - Many of the cases cited below were decided under corresponding provisions of the Constitution of 1868.
The right to a homestead is guaranteed by the Constitution. Williams v. Johnson, 230 N.C. 338, 53 S.E.2d 277 (1949).
Homestead and Personal Property Exemptions Distinguished. - The homestead exemption is permanent unless there is a reallotment by reason of an increase in value. But the personal property exemption is to be reassigned whenever, at subsequent dates, executions are levied. The reason is that the realty is fixed and stable, whereas the articles of personal property may be increased or diminished in quantity between the levy of executions. Gardner v. McConnaughey, 157 N.C. 481, 73 S.E. 125 (1911).
Power to Increase Value of Homestead Exemption. - The Constitution expressly vests in the General Assembly, not in the courts, the exclusive power to increase the value of the homestead exemption. Seeman Printery, Inc. v. Schinhan, 34 N.C. App. 637, 239 S.E.2d 744 (1977), appeal dismissed, 294 N.C. 442, 241 S.E.2d 844 (1978).
Comparison of former section with present subsection (1) of this section reveals that the major difference is that under the former the homestead could not exceed $1000 in value, while under the present Constitution the homestead shall be to a value fixed by the General Assembly but not less than $1000. Seeman Printery, Inc. v. Schinhan, 34 N.C. App. 637, 239 S.E.2d 744 (1977), appeal dismissed, 294 N.C. 442, 241 S.E.2d 844 (1978).
Present Possessory Interest Necessary for Homestead Exemption Claim. - In this State, a homestead exemption may not be claimed in property in which the claimant has no present possessory interest at the time the claim is made. In re Hudson, 4 Bankr. 337 (Bankr. E.D.N.C. 1980).
Ownership Interest Required. - Under North Carolina law, an individual must have an ownership interest in residential property in order to claim a homestead exemption in the property. Hollar v. United States, 184 Bankr. 25 (Bankr. M.D.N.C.), aff'd, 188 Bankr. 539 (M.D.N.C. 1995), aff'd, 92 F.3d 1179 (4th Cir. 1996).
Extent of Exemption of Dwelling House. - The constitutional and statutory enactments relating to the homestead exemption cannot be so construed as to permit exemption of an entire usable dwelling house, regardless of its value. Seeman Printery, Inc. v. Schinham, 34 N.C. App. 637, 239 S.E.2d 744 (1977), appeal dismissed, 294 N.C. 442, 241 S.E.2d 844 (1978).
Effect of Allotment Useless to Debtor which Impairs Value of Remaining Property. - Where the debtor requested that the allotment of his homestead begin at a point at the front door of his dwelling, with the result that the entire area allotted was located in the hallway adjacent to the front door of the house, the fact that the allotment was useless to the debtor and impaired the value of the remaining property available for satisfaction of the creditor's judgment did not entitle the debtor to claim his exemption in the entire dwelling. Seeman Printery, Inc. v. Schinhan, 34 N.C. App. 637, 239 S.E.2d 744 (1977), appeal dismissed, 294 N.C. 442, 241 S.E.2d 844 (1978).
Residence of Debtor. - For case in which evidence was insufficient to support finding by the court that judgment debtor was resident and entitled to homestead, see S.D. Scott & Co. v. Jones, 230 N.C. 74, 52 S.E.2d 219 (1949).
Duration of Homestead. - The homestead as allowed lasts during the life of the owner thereof; and, after his death, it lasts during the minority of his children, or any one of them, and the widowhood of his widow (now spouse), unless she be the owner of a homestead in her own right. Williams v. Johnson, 230 N.C. 338, 53 S.E.2d 277 (1949).
Presumption of Continuance. - Once acquired, the homestead is presumed to continue. Williams v. Johnson, 230 N.C. 338, 53 S.E.2d 277 (1949).
The only way property may lose its homestead character, after the homestead has been allotted, is by death, abandonment or alienation. Williams v. Johnson, 230 N.C. 338, 53 S.E.2d 277 (1949).
Homestead interest in land is terminated by the owner's removal from the State. S.D. Scott & Co. v. Jones, 230 N.C. 74, 52 S.E.2d 219 (1949).
The right to the homestead exemption is not forfeited by a fraudulent conveyance, and a judgment was properly modified by order directing that defendant be allotted his homestead in the land, which should be exempt from sale by the commissioner. New Amsterdam Cas. Co. v. Dunn, 209 N.C. 736, 184 S.E. 488 (1936).
Exemption Allowed in Mortgaged Lands. - A debtor may have his homestead exemption allotted in lands owned by him but mortgaged to a third person, but in ascertaining the value thereof the mortgage debt should be disregarded, and the land appraised as though the debtor owned the unencumbered fee. Crow v. Morgan, 210 N.C. 153, 185 S.E. 668 (1936).
And in Vacant Lots. - Where the only real property owned by a judgment debtor consists of vacant lots, he may claim his homestead therein, since he may thereafter build an habitable structure thereon. Equitable Life Assurance Soc'y v. Russos, 210 N.C. 121, 185 S.E. 632 (1936).
Doctrine of estoppel cannot deny a bankrupt his right to a homestead in lands which were subject to his debts. In selecting the land for his homestead exemption, he is not restricted to the tract on which he lives. In re Hamrick, 56 F.2d 240 (W.D.N.C. 1932).
Waiver of Homestead Right. - The right to claim homestead may be lost by failure to assert it in apt time, by waiver, or by estoppel. Cameron v. McDonald, 216 N.C. 712, 6 S.E.2d 497 (1940).
Involuntary Absence Did Not Constitute Abandonment of Residence. - Claimed homestead exemption was allowed, pursuant to G.S. 1C-1601(a)(1), over a trustee's objection because the debtor was forced to vacate and did not voluntarily abandon her damaged home as a result of hurricanes and she paid property taxes, stored personalty there, lived in temporary housing, and intended to use the home as a residence as soon as repairs were practicable. In re Foster, 348 B.R. 58 (Bankr. E.D.N.C. 2006).
Waiver Shown. - A written request by judgment debtors to the sheriff to sell lands under execution without the allotment of homestead, to the end that the property might bring the highest price possible, and joinder of the judgment debtors in the sheriff's deed to the purchaser, constituted an authorization and ratification of the act of the sheriff in making the execution sale without allotment of homestead and was a valid waiver by the judgment debtors of their homestead exemption in regard to that particular execution. North Carolina Joint Stock Land Bank v. Bland, 231 N.C. 26, 56 S.E.2d 30 (1949).
Where defendants made no objection to the sale of real property under execution without allotting the homestead until five months after the sale was completed, where the real property was sold to third parties in the meantime, and where the femme defendant was present at the sale and did not request the allotment of a homestead, these facts constituted a waiver by the defendants of their right to have the homestead allotted. North Carolina Nat'l Bank v. Sharpe, 49 N.C. App. 687, 272 S.E.2d 368 (1980), appeal dismissed, 302 N.C. 217, 276 S.E.2d 916 (1981).
Creditors Without Standing to Complain of Waiver. - Homestead is a right created for the benefit of the judgment debtor, and therefore other judgment creditors cannot complain of a waiver by the debtor of this right in designated realty as to a particular judgment. North Carolina Joint Stock Land Bank v. Bland, 231 N.C. 26, 56 S.E.2d 30 (1949).
Right May Be Sold or Assigned. - The homestead right or estate is salable or assignable, and the purchaser can hold the land to which it pertains to the exclusion of judgment creditors during its existence. Gardner v. Batts, 114 N.C. 496, 19 S.E. 794 (1894).
The owner of lands loses his right to a homestead therein allowed by this section upon his conveying the title to the same, by deed, though he may select a homestead thereafter in other of his lands. Duplin County v. Harrell, 195 N.C. 445, 142 S.E. 481 (1928).
Allotment Unnecessary. - The title to the homestead is vested in the owner by the Constitution of this State, and no allotment by the sheriff is necessary to vest the title thereto. The allotment by the sheriff is only for the purpose of ascertaining whether there is an excess of property over the homestead which is subject to execution. Lambert v. Kinnery, 74 N.C. 348 (1876).
Land must be selected by the owner and allotted before it becomes exempt. It must also be both owned and occupied by the homesteader, and this at the time of issuance of the execution. Chadbourn Sash, Door & Blind Co. v. Parker, 153 N.C. 130, 69 S.E. 1 (1910).
Where a judgment debtor is present when his homestead in his land is laid off to him by the appraisers, and he designates the land he desires for the purpose, he may not successfully contend thereafter that other lands should have been included, it not being contended that the value of the homestead as allotted was less than $1,000.00. Citizens Bank v. Robinson, 201 N.C. 796, 161 S.E. 487 (1931).
Where a mortgage on land is foreclosed and the land brings at the foreclosure sale a sum more than sufficient to pay the mortgage debt, the surplus remaining to the constitutional limit of $1,000.00 is to be regarded as realty to which the homestead right attaches when the same has not been waived. Farris v. Hendricks, 196 N.C. 439, 146 S.E. 73 (1929).
A mortgagor of lands is entitled to his homestead exemption in his equity of redemption as against the liens of judgment creditors, and an injunction will lie against the sale of the property under execution when his homestead has not been allotted. Cheek v. Walden, 195 N.C. 752, 143 S.E. 465 (1928).
There is no lien for purchase money in North Carolina, and while the judgment debtor cannot claim homestead as against a judgment for purchase money, the lien of a mortgage executed to a third person has priority over the judgment lien, when the mortgage is executed prior to the rendition of the judgment and prior to an amendment putting the title to the property in issue. Jarrett v. Holland, 213 N.C. 428, 196 S.E. 314 (1938).
A duly docketed judgment is a lien on the lands of the judgment debtor, but is subject to the homestead interest in the lands as provided by this section. Farris v. Hendricks, 196 N.C. 439, 146 S.E. 73 (1929).
Cited in Kroh v. Kroh, 154 N.C. App. 198, 571 S.E.2d 643 (2002).
II. EXEMPTION FOR BENEFIT OF CHILDREN.
As to the unconditional right of exemption given to the children, see Spence v. Goodwin, 128 N.C. 273, 38 S.E. 859 (1901).
The debt referred to in subsection (2) of this section means the debt of the owner of the homestead, and not the debt of the infant children. Bruton v. McRae, 125 N.C. 206, 34 S.E. 397 (1899).
Only Minor Children Included. - Twenty-one year old heir is not entitled to homestead in the lands of his ancestor; his right thereto ceased as soon as he attained his majority. Saylor v. Powell, 90 N.C. 202 (1884).
Where Only One Child a Minor. - Where the owner of a homestead dies, leaving children, some of age and one a minor, the homestead estate vests alone in the minor child until his or her majority. Simpson v. Wallace, 83 N.C. 477 (1880).
Pecuniary Standing of Children Not Considered. - The right of a homestead is given to the minor children of an insolvent father, regardless of their pecuniary circumstances. Allen v. Shields, 72 N.C. 504 (1875); Spence v. Goodwin, 128 N.C. 273, 38 S.E. 859 (1901).
Right Not Waivable by Guardian Ad Litem. - A guardian ad litem cannot waive the homestead rights of infant heirs, especially when there is no consideration therefor, for such waiver would affect the substantial rights of the infants. Spence v. Goodwin, 128 N.C. 273, 38 S.E. 859 (1901).
Right Not to Be Sold for Assets. - In a proceeding to sell land for assets, the executor cannot sell the homestead interest of a minor child and devisee of the testator. Bruton v. McRae, 125 N.C. 206, 34 S.E. 397 (1899).
III. EXEMPTION FOR BENEFIT OF SPOUSE.
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Ownership at Death Essential. - It is only when the husband (now spouse) is the owner of a homestead at the time of his death that the exemption from debts inures to surviving spouse's benefit. Thomas v. Bunch, 158 N.C. 175, 73 S.E. 899 (1912).
A widow (now surviving spouse) is not required to take action for the preservation of the right to a homestead in the lands of deceased husband (spouse) under the provisions of this section, and before the lands can be validly sold by the personal representatives to make assets for payment of the debts of the deceased the homestead must first be assigned. Fulp v. Brown, 153 N.C. 531, 69 S.E. 612 (1910).
For case holding that widow was not entitled to homestead where husband left adult children by another marriage, see Simmons v. Respass, 151 N.C. 5, 65 S.E. 516 (1909).
IV. CONVEYANCE OF HOMESTEAD.
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Subsection (4) Applies After Allotment of Homestead. - Subsection (4) of this section applies only to a conveyance of the homestead after it has been laid off. Mayho v. Cotton, 69 N.C. 289 (1873), approved in Dalrymple v. Cole, 170 N.C. 102, 86 S.E. 988 (1915). See also, Hager v. Nixon, 69 N.C. 108 (1873).
The provisions of subsection (4) of this section do not become effective, and do not begin to operate, until an allotment of the homestead is made to the husband (spouse). Dalrymple v. Cole, 170 N.C. 102, 86 S.E. 988 (1915).
Joinder of Spouse in Conveyance of Land. - Where there is a homestead right in land, the homesteader may alienate the same only with the joinder of the wife (spouse). Farris v. Hendricks, 196 N.C. 439, 146 S.E. 73 (1929).
A deed executed by the homesteader without the joinder of his wife (spouse) is invalid and passes no interest. Wittkowsky v. Gidney, 124 N.C. 437, 32 S.E. 731 (1899). See also, Lambert v. Kinnery, 74 N.C. 348 (1876).
For case discussing right of grantee upon nonjointure of wife (spouse), see Dalrymple v. Cole, 170 N.C. 102, 86 S.E. 988 (1915).
For case discussing instances in which the assent of the wife (spouse) was not necessary, see Hughes v. Hodges, 102 N.C. 236, 102 N.C. 262, 9 S.E. 437 (1889). See also, Dalrymple v. Cole, 156 N.C. 353, 72 S.E. 451 (1911); Simmons v. McCullin, 163 N.C. 409, 79 S.E. 625 (1913).
General power of alienation incident to ordinary ownership of real property exists as to all the residue or remaining interest in the lands over the homestead exemption, whether the exemption has or has not been allotted, this section of the Constitution applying alone to the homestead interest, and none other. Davenport v. Fleming, 154 N.C. 291, 70 S.E. 472 (1911).
For case holding jointure of wife (spouse) unnecessary in conveyance of estate in reversion, see Jenkins v. Bobbitt, 77 N.C. 385 (1877).
Land Acquired Prior to 1868. - Husband could convey land acquired before the Constitution of 1868 without the joinder of his wife and thereby bar wife of dower or homestead. Cawfield v. Owens, 129 N.C. 286, 40 S.E. 62 (1901).
For review of decisions prior and subsequent to enactment, in 1905, of former G.S. 1-370, see Stokes v. Smith, 246 N.C. 694, 100 S.E.2d 85 (1957).