Welcome to Realty, LLC 401k PSP v. Wilson.
2024 COA 122. No. 24CA0313. Homestead Exemption—Surviving Spouse and Minor Children—Sheriff’s Sale—Eviction.
November 21, 2024
Wilson’s mother owned her house (the house), which she devised through her will in equal shares to Wilson and Wilson’s brother (not a party to this case). Wilson had lived in the house as a child and moved out as an adult, but she moved back into the house the day her mother died in 2021. Several days later, Welcome to Realty, LLC 401k PSP (Welcome) bought a judgment against Wilson’s mother that was based on a $2,163.85 unpaid dental bill judgment recorded against the house in 2018. Welcome ultimately became the record owner of the house through a sheriff’s sale, and when Wilson refused Welcome’s demand to move out of the house, Welcome sued to evict her. Wilson counterclaimed for a declaratory judgment that Welcome doesn’t own the house because its failure to follow certain homestead exemption procedures rendered the sheriff’s sale void. The district court reasoned that even though Wilson was 57 years old when her mother died, she is entitled to a homestead exemption in the house by virtue of her familial status and occupancy and inheritance of the house. The court entered a judgment voiding the sheriff’s sale based on its determination that Wilson can claim the homestead exemption.
On appeal, Welcome argued that the district court misapplied Colorado’s homestead exemption statute and thus erred by determining that Wilson can claim a homestead exemption in the house. Pursuant to CRS § 38-41-204, if the owner of the homestead dies leaving a surviving spouse or minor children, the spouse or minor children may claim the exemption. But under the statute’s plain language, a homeowner’s homestead exemption may not be claimed by a homeowner’s adult child upon the homeowner’s death. In such event, the deceased homeowner’s entire interest in the property can be used to satisfy the deceased homeowner’s debts. Here, Wilson’s late mother left neither a surviving spouse nor minor children. Accordingly, the homestead exemption terminated upon her death, and Wilson isn’t entitled to it. Therefore, Welcome wasn’t required to follow § 38-41-206(1)’s homestead exemption procedures before moving for a writ of execution to enforce its judgment lien against the house, and the district court erred by concluding otherwise.
The judgment voiding the sheriff’s sale was reversed and the case was remanded for further proceedings.