Colorado § 38-41-206 - Levy on homestead - excess - costs.

§ 38-41-206. Levy on homestead - excess - costs.

(1) Before any creditor of the owner of the homesteaded property may proceed against said property, such creditor shall file with the county clerk and recorder of the proper county and the sheriff or other proper officer authorized to levy on said property:

(a) His affidavit showing:

(I) A description of the homesteaded property and the name of the claimant of the homestead exemption;

(II) The fair market value of said property;

(III) That the fair market value of said property less any prior liens or encumbrances thereon exceeds the amount of the homestead exemption fixed in section 38-41-201 for which the claimant qualifies; and

(IV) That no previous execution arising out of the same judgment has been levied upon said property;

(b) The affidavit of a professionally qualified independent appraiser showing the same information required by subparagraphs (I) to (III) of paragraph (a) of this subsection (1).

(2) If the amount offered at the sale of the homesteaded property does not exceed seventy percent of the fair market value shown in the affidavit of the independent appraiser filed pursuant to paragraph (b) of subsection (1) of this section, all proceedings to sell said property shall terminate. The sheriff or the proper officer shall then file for record in the office of the county clerk and recorder of the proper county an instrument releasing all levies on said property in connection with such sale, and the person instituting the proceedings shall pay the costs of such proceedings, and the title of the owner to said property shall not be impaired or affected.

(3) If the successful bidder at such sale is a judgment creditor, he shall be required to pay in cash to the sheriff or other proper officer making the sale an amount sufficient to pay the exemption plus the proper costs and expenses and shall not have the right to have such exempt amount applied toward the satisfaction of his judgment.

(4) If a sale is made, the proceeds thereof shall be applied in the following order:

(a) First, to the discharge of all prior liens and encumbrances, if any, on said property;

(b) Second, to the homestead claimant in the amount of the homestead exemption for which he qualifies;

(c) Third, to the sheriff or other proper officer making the sale in an amount sufficient to pay the proper costs and expenses of the sale;

(d) Fourth, to the satisfaction of the judgment; and

(e) Fifth, the balance, if any, to the homestead claimant.

Source: R.S. p. 386, § 63. G.L. § 1349. G.S. § 1637. R.S. 08: § 2956. C.L. § 5930. CSA: C. 93, § 28. L. 53: p. 412, § 4. CRS 53: § 77-3-6. C.R.S. 1963: § 77-3-6. L. 75: Entire section R&RE, p. 1445, § 3, effective July 14. L. 83: (1)(a)(III) amended, p. 1478, § 1, effective July 1.

ANNOTATION

Law reviews. For article, "Executions and Levies on Tangible Property", see 27 Dicta 143 (1950). For note, "Colo. Homestead Now Assertable Against Heirs", see 25 Rocky Mt. L. Rev. 84 (1952). For note, "The Homestead Rights of Minor Children in Solvent Estates", see 25 Rocky Mt. L. Rev. 370 (1953). For article, "Homestead and Bankruptcy in Colo. and Elsewhere", see 56 U. Colo. L. Rev. 175 (1985).

Levy cannot be made without filing of affidavit. No levy can lawfully be made without the previous filing of the affidavit required by subsection (1). Copeland v. Colo. State Bank, 13 Colo. App. 489, 59 P. 70 (1899); Whitlock v. Alliance Coal Co., 73 Colo. 205, 214 P. 546 (1923).

Sale may be enjoined. If a levy is made without such affidavit, the debtor is entitled to an injunction restraining the sale. Whitlock v. Alliance Coal Co., 73 Colo. 205, 214 P. 546 (1923).

Even though the legislature changed the law from a declared exemption practice to an automatic exemption practice, an affidavit must still be filed prior to the levy of homestead property and any levy made prior to the filing of the required affidavit is void. Estes Park Bank v. Shanks, 794 P.2d 1108 (Colo. App. 1990).

Homestead exceeding value of exemption may be subjected to payment of debt. To the extent that an indivisible homestead exceeds the value of the exemption, it may be subjected to the payment of the debts of the deceased where there are no other available assets. Union Nat'l Bank v. Wright, 78 Colo. 346, 242 P. 54 (1925).

Wife's valid exemption does not defeat creditor's right. The fact that the wife has a valid exemption by a proper entry does not defeat the right of the creditor to subject such property to his claim where the property was worth more than the homestead, since a property may be sold and the excess charged with the creditor's claim. Tibbetts v. Terrill, 44 Colo. 94, 96 P. 978 (1908).

Amount of homestead exemption set aside to bankrupt when sale held. If a bankrupt's interest in the real estate involved exceeds the amount of valid liens plus the homestead exemption, then the trustee in bankruptcy may sell the property for the purpose of obtaining the excess value to satisfy claims of creditors, and if such a sale is held, the amount of the homestead exemption must be set aside to the bankrupt and he shall receive the amount in cash. Baker v. Allen, 34 Colo. App. 363, 528 P.2d 922 (1974).

Public trustee's sale of homesteaded property. When a public trustee conducts a sale of homesteaded property upon a deed of trust with a waiver therein, the public trustee must limit the sale to the extent of the waiver or else require that the sale of the homestead conform to the safeguards in a forced sale of homestead by execution as set forth in this section. Frank v. First Nat'l Bank, 653 P.2d 748 (Colo. App. 1982).

Creditor not creditor as to exemption. While a creditor may be interested when the value of the property exceeds the exemption allowance, nevertheless, as to the exemption, he is, in fact, not a creditor at all. Barnett v. Knight, 7 Colo. 365, 3 P. 747 (1884); Union Nat'l Bank v. Wright, 78 Colo. 346, 242 P. 54 (1925).

Creditor may not refuse to pay its bid price. A judgment creditor cannot bid the property in the sale for the full amount of the homestead exemption and then refuse to pay its bid price. Am. Heritage Bank & Trust Co. v. Trees, 35 Colo. App. 147, 532 P.2d 380 (1974).

Creditor not required to follow subsection (1)'s procedures before moving for a writ of execution to enforce its judgment lien against the house when the house was not subject to any homestead interest when debtor died. Welcome to Realty, LLC 401K PSP v. Wilson, 2024 COA 122, 564 P.3d 658.