Robert owns a 0.30-acre residential lot within the city limits of Fort Smith, Arkansas, valued at $420,000. He has a $50,000 mortgage lien and a $30,000 unsecured judgment lien against the property. Robert claims the Arkansas homestead exemption. Which of the following most accurately describes the effect of the homestead exemption on these liens?
Correct Answer
B) The homestead exemption protects 1/4 acre of the lot from the unsecured judgment lien but does not affect the voluntary mortgage lien.
Under Ark. Const. Art. 9, §§ 3–6, the Arkansas homestead exemption protects the primary residence (up to 1/4 acre in urban areas) from involuntary creditor claims such as unsecured judgment liens. However, the exemption does not apply to voluntary liens such as a purchase-money mortgage or deed of trust that the homeowner voluntarily granted. Robert's 1/4-acre urban homestead is shielded from the $30,000 judgment lien, but the $50,000 mortgage lien remains fully enforceable because it is a voluntary encumbrance. Note: Robert's lot is 0.30 acres, which exceeds the 1/4-acre urban limit, so only 1/4 acre is protected; the excess 0.05 acres is not shielded.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Commingling is the illegal act of mixing client trust funds with a broker's personal or business operating funds; conversion is the misappropriation of those funds.
Continuing education (CE) refers to the ongoing coursework that licensed real estate professionals must complete during each renewal cycle to maintain an active license. CE ensures agents stay current with changes in laws, regulations, and industry practices.
The National Do Not Call Registry is a federal program administered by the FTC that allows consumers to opt out of receiving unsolicited telemarketing calls, including calls from real estate agents soliciting business.
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