BUILDER'S WIFE MAY LOSE HER HOME
BECAUSE THE BUILDER DID NOT PAY
DISGRUNTLED HOME OWNER

The Minnesota Supreme Court has taken under consideration, a case in which a builder, Sweeno, had Judgment entered against him by a homeowner, Kipps, for fraud in constructing the home. Sweeno and his wife own a home, valued at $310,000.00. Under Minnesota law, $200,000.00 of value in a homestead is exempt from creditors.

In an earlier appeal, the Court of Appeals decided that Mr. and Mrs. Sweeno had one $200,000.00 homestead exemption between them, and ordered the sale of the property to pay Kipps' Judgment. The Court ruled that the Kipps could sell the property and keep anything in excess of $200,000.00, even if that meant kicking Mrs. Sweeno out of the house.

In the second appeal, which is now before the Supreme Court, the Minnesota Court of Appeals affirmed that the property could be sold, subject to Mrs. Sweeno's $200,000.00 homestead exemption.

Between the two appeals, the Court had ordered the homestead sold. It was purchased by Kipps, who bid in their Judgment, but paid no money. The Court agreed the sale procedure was proper, and, subject to a redemption period, they awarded Kipps the home. The Court said that if Kipps ever decides to sell the property that Mrs. Sweeno would get her $200,000.00 homestead exemption. Until the Kipps decide to sell the property, Mrs. Sweeno would get nothing, except kicked out in the street.

The truly tragic part of this case is that for over 150 years, the Minnesota Courts have been the protector of the homestead. That appears to no longer be the case. Builders, as everyone in business, take financial risks. It was always believed that if the risk did not pay off, that the builder and his family could at least keep their home. That may no longer be the case.

If the result in this case bothers you, I strongly encourage you to contact Pam Weaver at BAM. This can be fixed by legislative changes to the homestead exemption statute. The Minnesota Supreme Court could reverse this decision, but it may be best to solve it in the legislature.

©2003 Rinke-Noonan Law Firm, St. Cloud, MN. David J. Meyers is licensed to practice law in State and Federal Courts in Minnesota. He is certified as a Real Property Law Specialist. He currently serves on the Board of Directors for the CMBA and is past BAM President.