Bulletin: ID000010

Dear Associates:

On July 1, 1989, Idaho Code 55-1004 became effective which created an automatic homestead for spouses in lands used as a primary place of residence. This automatic homestead exists on lands that were either considered to be community property or separate property of either spouse. The key fact then is the use of the premises as a primary residence.

Idaho Code 55-1007 provides:

"The homestead of a married person cannot be conveyed or encumbered unless the instrument by which it is conveyed or encumbered is executed and acknowledged by both husband and wife, except that a husband or a wife or both may make and execute powers of attorney for the conveyance or encumbrance of a homestead."

We have continued to receive requests to give affirmative coverage and/or have found circumstances where these provisions of the Idaho Code are not being scrupulously followed. Specifically, where in the case of separate property, the spouse is not joining in the conveyance or encumbrance as a grantor. Some title examiners have accepted a Quit Claim Deed from the spouse to maintain the characterization of the land as separate property of one spouse, but then not required the spouse to join in the conveyance and/or encumbrance to remove the effect of the automatic homestead.

In addition to failing to make the proper requirement, the act of giving affirmative coverage in the face of this clear statutory section based upon the request of a lender is clearly unwise.

Company Policy: In any conveyance and/or encumbrance of lands which have been used, are being used or intended to be used as a primary residence, the company requires the execution of the conveyancing document by both spouses regardless of characterization of the estate as being community property or separate property of either spouse.

On second homes or other lands which could be used as a residence, it would be prudent to obtain an affidavit from the parties that the land is not being used or intended to be used as a primary residence.

In circumstances where one spouse intends to use a power of attorney, the conveyancing document still must show both husband and wife as grantor. All other requirements relating to powers of attorney must also be followed.

If you have any questions on this matter, please call your District Office.