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Published: 2008-03-26

An Overview of The Texas Homestead Law


Texas homestead law exempts qualifying real property from forced sale by general creditors. In Texas, every family and every single adult person is entitled to a homestead exempt from seizure for claims of creditors, except for encumbrances properly fixed on homestead property.(2) Traditionally, courts have liberally construed the homestead protections in the accomplishment of their objective.

II. Types of Homestead: Urban and rural

A. Generally

A homestead must be either urban property or rural property. An urban homestead may be a home or a place of business, or both, so long as the urban residential homestead and the urban business homestead in the aggregate do not exceed one acre.(3) There is no limitation of value on urban or rural homesteads, only of size. Rural homesteads are limited to 200 acres for a family and 100 acres for a single adult, which may be held in one or more parcels, with improvements thereon, and an urban homestead is limited to one acre, which may be in one or more lots, with improvements thereon.(4) However, a Senate Joint Resolution was passed by the 76th Legislature to amend the Texas Constitution that will, if approved by Texas voters on November 2, 1999, increase the maximum urban homestead exemption to ten acres.(5) A determination of the homestead character as rural or urban is important for it will affect such issues as the amount of acreage subject to exemption and the eligibility of the property to qualify as a business homestead.

B. Rural Versus Urban Homesteads

The Texas Constitution provides no guidance in distinguishing a rural homestead from an urban homestead. Ultimately, it is a fact question. The Texas courts have looked to a number of factors in making the determination, none of which are determinative. Factors that the courts have looked to include (1) the location of the property with reference to the boundary limits of a city, town or village;(6) (2) change in character of land from rural to urban in relation to city boundaries;(7) (3) whether the property has been laid out in lots and blocks typical of urban property; (4) the use generally made of surrounding properties;(8) (5) the presence or absence of city water, sewage, electricity, gas, fire protection, police protection, and mail delivery;(9) (6) the size and value of the property;(10) and (7) the existence of restrictive covenants.(11)

A statutory definition for the rural homestead was created in 1989. This definition, found in Texas Property Code §41.002(c), reads:

[a] homestead is considered to be rural if, at the time designation is made, the property is not served by municipal utilities and fire and police protection.

The Fifth Circuit has said that the Property Code definition is only applicable in cases in which there is a threatened foreclosure of a homestead. In all other cases, the traditional analysis for determining homestead is appropriate.(12) The phrasing of the Property Code definition leaves open the possibility that all "municipal utilities" must serve the homestead for it to qualify as an urban homestead. The definition creates more uncertainty in that a tract clearly within a city, town, or village may not be served with the requisite city services to qualify as an urban homestead. On the other hand, a tract clearly outside a city, town, or village may have sufficient municipal services to lose its rural character.

Senate Bill 496, which was forwarded to Governor Bush for signing on May 31, 1999, would eliminate the statutory definition of a rural homestead and add a new definition for the urban homestead. The bill deletes the rural homestead definition of Texas Property Code §41.002(c) and replaces it with the following definition:

A homestead is considered to be urban if, at the time the designation is made, the property is:

  1. located within the limits of a municipality or its extraterritorial jurisdiction or a platted subdivision; and

  2. served by police protection, paid or volunteer fire protection, and at least three of the following services provided by a municipality or under contract to a municipality:
    1. electric;
    2. natural gas;
    3. sewer;
    4. storm sewer; and
    5. water.(13)

III. Family v. Single Adult Homestead

A. Generally

The distinction between a family and adult homestead is particularly significant for rural homesteads because the Property Code provides for different acreage allocations for each.(14) The courts have defined a "family" as: (1) a group of people having the social status of a family living subject to one domestic government, and (2) the head of the family must be legally or morally obligated to support at least one other family member, and (3) there must be a corresponding dependence by the other family member for this support.(15)

As long as the obligation of support and dependency is shown, a number of different types of relationships have been held to support a showing of "family" including (1) an adult child and parent,(16) (2) a brother and sisters,(17) (3) a divorced parent and a minor child(18), and (4) a widower with no dependent children.(19)

The duty of support may be either a moral or legal duty.(20) In the case of a minor child or infirm elderly person, the support need not be strictly financial, but may be emotional instead. However, support of a dependent adult must always be financial. Partial dependency is sufficient for claiming a family homestead.

B. Events Affecting the Status of Family

There may only be one homestead per family.(21) However, in the event of divorce, each spouse may claim a separate homestead.(22) In the event of a death of one of the spouses, the status of family is unaffected as to the surviving spouse.(23)

C. Multi-tract Homesteads

A rural or urban homestead may consist of only one residence.(24) Traditionally, the homestead property could be composed of one or more non-contiguous parcels of land.(25) However, legislation passed by the 76th Legislature would require that urban homestead lots be contiguous, and would increase the urban homestead from one to ten acres.(26) In effect, this would eliminate the business homestead located on a separate, noncontiguous piece of land. Currently, a business homestead may be on noncontiguous property, as long as the business homestead and the residence homestead together do not exceed one acre. Further, the legislation provides that "a release or refinance of an existing lien against the homestead does not create an additional burden on the part of the homestead property that is unreleased or subject to the refinance, and a new lien is not invalid only for that reason."(27) This joint resolution will go to the voters November 2, 1999.

IV. Establishment of the Homestead

A. Generally

Acquiring homestead rights in a piece of property in Texas does not require a formalized legal process, or the filing of a specific document. The general criteria for creating a homestead are (i) overt acts of usage, and (ii) an intent to claim the land as a permanent residence.(28)

B. Overt Acts

While it is not a requirement that the property actually be occupied,(29) the right to possession of the property is necessary.(30) Occupancy and use of a tract will not, by themselves, make the tract a homestead.(31) However, investigation of intent is unnecessary when the land is put to homestead uses.(32) Different types of usage of the property are required to establish urban and rural homesteads.

1. Rural Homestead

In order to establish a rural homestead, a person must (i) reside on the property, and (ii) use all the remaining property to support his family.(33)

(a) Residence:
Naturally, the claimant need only reside on one parcel of a multi-parcel rural homestead.(34) However, the debtor must use the property as a permanent home. Occasional, weekend, or holiday use will not be sufficient use to claim the property as a rural homestead.(35) Use of the property for agricultural purposes, without residence, creates no homestead.(36)

(b) Use:
Use of the remaining property must be for the support of the debtor's family. This use may include agricultural pursuits.(37) Courts vary regarding the degree of support necessary for a rural homestead. On one extreme, courts have failed to find a rural homestead when the remaining property did not provide the debtor with any pronounced economic benefit.(38) In another case, the court found a rural homestead although the debtor's cattle raising did not provide him with his only economic support.(39) Finally, courts have held that no economic support need be derived from the use as long as the debtor uses the property as a home.(40)

2. Urban Business Homestead

In order to establish a business homestead (i) the head of the family must actually have a business or calling, (ii) the tract must be reasonably adapted and necessary to that business, and (iii) the property must be actually used as the place to conduct the business.(41)


1. The authors gratefully acknowledge the invaluable assistance of Jason Duvall, a third-year law student at the University of Houston Law Center; Laura Shelton, a third-year law student at South Texas College of Law; and Troy Jensen, a third-year law student at the University of Houston Law Center. Also, for an excellent study of homestead law, see Steven C. Haley, Homestead Update, State Bar of Texas 1997 Advanced Real Estate Law Course. E, E-1-2 (1997).

2. A homestead may be subjected to forced sale only for debts for (i) purchase money, (ii) taxes due on the homestead, (iii) work and material used in constructing improvements made thereon, (iv) an owelty of partition imposed against the entirety of the property by a court order or by a written agreement of the parties to the partition, including a debt of one spouse in favor of the other spouse resulting from a division or an award of a family homestead in a divorce proceeding, (v) the refinance of a lien against homestead, including a federal tax lien resulting from the tax debt of both spouses, if the homestead is a family homestead, or from the tax debt of the owner, and (vi) a home equity loan meeting the conditions of Section 50(a)(6). Tex. Const. art. XVI, § 50 (Vernon Supp. 1999); Tex. Prop. Code Ann. § 41.001(b). ( Vernon Supp. 1999).

3. See In re Nelson, 134 B.R. 838 (Bankr. N.D. Tex. 1991).

4. See Tex. Const. art. XVI, § 51 (Vernon 1993); Tex. Prop. Code § 41.002 (Vernon Supp. 1999).

5. See Tex. S.J.R. 22, 76th Leg., R.S. (1999).

6. See In re Mitchell, 132 B.R. 553, 558 (Bankr. W.D. Tex. 1991).

7. See Schultz v. Schultz, 45 S.W.2d 312, 313 (Tex.Civ.App.-Austin 1931, no writ).

8. See Fajkus v. First Nat'l Bank of Giddings, 735 S.W.2d 882, 885 (Tex.App.-Austin 1987, writ denied).

9. See Aetna Ins. Co. v. Ford, 417 S.W.2d 448, 451 (Tex.Civ.App.-Eastland 1967), rev'd on other grounds, 424 S.W.2d 612 (Tex. 1968).

10. See First State Bank of Grapeland v. Brown, 490 S.W.2d 248, 250 (Tex.Civ.App.-Tyler 1973, no writ).

11. See In re McCain, 160 B.R. 933, 939 n. (Bankr. E.D. Tex. 1993).

12. See United States v. Blakeman, 997 F.2d 1084 (5th Cir. 1992); Matter of Bradley, 960 F.2d 502 (5th Cir. 1992).

13. See Tex. S.B. 496, 76th Leg., R.S. (1999).

14. See Tex Prop. Code § 41.002(b) (Vernon Supp. 1999).

15. See NCNB Texas National Bank v. Carpenter, 849 S. W. 2d 875, 879 (Tex.Civ.App.-Fort Worth 1993, no writ).

16. See NCNB Texas National Bank v. Carpenter, 849 S. W. 2d 875, 879 (Tex.Civ.App.-Fort Worth 1993, no writ).

17. See Real Estate Land Title & Trust Co. v. Street, 85 S.W.2d 341, error dismissed.)

18. See Renaldo v. Bank of San Antonio, 630 S.W.2d 638, 639 (Tex. 1982).

19. See Border v. McDaniel, 70 F.3d 841, 844 (5th Cir. 1995).

20. See NCNB Texas, 849 S.W.2d at 879.

21. See Matter of Claflin, 761 F.2d 1088, 1090 (5th Cir. 1985)

22. See In re Julian, 163 B.R. 478 (Bankr. N.D. Tex. 1994).

23. See Border v. McDaniel, 70 F.3d 841, 844 (5th Cir. 1995).

24. See Julian, 163 B.R. at 480.

25. See In re Hughes, 172 B.R. 205, 209-10 (Bankr. N.D. Tex. 1994); Ford v. Aetna Ins. Co., 424 S.W.2d 612, 616 (Tex. 1968).

26. See Tex. S.J.R. 22, 76th Leg., R.S. (1999).

27. See id.

28. See Sanchez v. Telles, 960 S.W.2d 762, 770 (Tex. App.--El Paso 1997, writ denied).

29. See Clark v. Salinas, 626 S.W.2d 118, 120 (Tex. Civ. App.--Corpus Christi, 1981), aff'd, 628 S.W.2d 51 (Tex. 1982).

30. See Laster v. First Huntsville Properties, 826 S.W.2d 125, 130 (Tex. 1991).

31. See In re Nelson, 134 B.R. 838, 844-845 (Bankr. N.D. Tex. 1991).

32. See Lifemark Corp. v. Merritt, 655 S.W.2d 310, 315 (Tex. Civ. App.--Houston [14th Dist.] 1983, writ ref'd n.r.e.).

33. See NCNB Texas Nat'l Bank v. Carpenter, 849 S.W.2d 875, 879 (Tex. App.--Fort Worth 1993, no writ).

34. See id.

35. See Caulley v. Caulley, 777 S.W.2d 147, 150 (Tex. App.--Houston [14th Dist.] 1989), aff'd, 806 S.W.2d 795 (Tex. 1991).

36. See In re Bohac, 117 B.R. 256, 263 (Bankr. W.D. Tex. 1990).

37. Examples include cultivation of the land, raising livestock, growing forage, raising timber, and/or production of family supplies.

38. See In re Spencer, 109 B.R. 715 (Bankr. W.D. Tex. 1989).

39. See In re Moody, 77 B.R. 580 (Bankr. S.D. Tex. 1987).

40. See In re Mitchell, 132 B.R. 553 (Bankr. W.D. Tex. 1991).

41. See O'Neil v. Mack Trucks, Inc., 533 S.W.2d 832, 838 (Tex. Civ. App.-- El Paso 1975), aff'd, 551 S.W.2d 32 (Tex. 1977).