“The homestead may be a splendid mansion, a cabin or a tent,” but can it be a cooperative apartment? The supreme courts of both Florida and Georgia recently have answered this question in the negative. The Florida Supreme Court denied to a widow a homestead exemption in her deceased husband's cooperative apartment, ruling that a cooperator has no proprietary interest in the apartment, the building, or the land on which the building is situated. The Georgia Supreme Court denied a homestead tax exemption to cooperators because they lacked the characteristics of ownership needed to bring them within the constitutional exemption from taxation for "owners" of a homestead. Both decisions ignore the claimants' use of their apartments as their primary residences.
The refusal to bring stock-owned cooperative apartments within the purview of homestead statutes deprives cooperators of valuable protections granted to owners of other dwelling units. Such refusals result from the use of technical and mechanical distinctions, rather than a broader, more purpose-oriented approach in definition, thereby ignoring the policy consideration at the very heart of homestead exemption statutes-protection of a debtor's home. Such refusals also reflect the law's continued inability to deal with the hybrid nature of the cooperator's interest in a stock-owned cooperative apartment. This treatment has resulted in an unnecessary gap in homestead coverage that can disappoint the expectations of a layperson who thinks he or she "owns" a cooperative apartment.
This article explores the nature and history of homestead exemption statutes and the interests that have been recognized as sufficient to support a homestead exemption. The article next surveys the legal treatment of cooperative apartment interests. Methods that those states with the highest number of cooperatives have chosen or might choose to resolve the issue of the permissibility of a cooperative homestead are also examined. Finally, the article discusses several problems attending the extension of homestead coverage to cooperatives.