Patricia owns a 100-acre farm in rural Benton County, Arkansas, where she has lived for 20 years. A bank obtains a judgment against Patricia for an unpaid business loan and attempts to force the sale of the entire 100-acre property to satisfy the debt. Patricia claims the Arkansas homestead exemption. Which of the following best describes the legal outcome?
Correct Answer
A) Up to 80 acres of the farm may be protected as Patricia's homestead, but the remaining 20 acres may be subject to the judgment.
The Arkansas Constitution, Art. 9, §§ 3–6, protects a rural homestead up to 80 acres. Patricia's 100-acre farm exceeds this limit by 20 acres. Therefore, Patricia may designate up to 80 acres as her protected homestead, shielding that portion from the judgment creditor. The remaining 20 acres that fall outside the homestead designation may be subject to forced sale to satisfy the judgment. The value of the protected 80 acres is not capped.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Reconciliation is the final step in the appraisal process where the appraiser analyzes the value indications from all applicable approaches and arrives at a single final opinion of value. It is not a simple average of the three values.
The comparable sales approach estimates a property's value by comparing it to similar properties that have recently sold in the same market area. It is the most widely used and reliable approach for appraising residential properties.
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
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Previous Question
Which government official in Arkansas is primarily responsible for determining the appraised (true market) value of real property for property tax assessment purposes?
Next Question
An Arkansas real estate agent tells her client that the property tax on a $400,000 home will be calculated by multiplying the full $400,000 market value by the local millage rate. A competing agent tells the same client that Arkansas first converts market value to an assessed value before applying the millage rate, resulting in a much lower tax base. The client asks which agent is correct and what the assessed value would be. Which of the following responses is accurate?