HOUSE FILE 517

BY  COMMITTEE ON JUDICIARY

(SUCCESSOR TO HSB 96)

A BILL FOR

An Act relating to the conveyance or encumbrance of a homestead by a spouse.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  Section 561.13, Code 2011, is amended to read as follows:
   561.13  Conveyance or encumbrance.
   1.  A conveyance or encumbrance of, or a contract to convey or encumber the homestead, if the owner is married, is not valid, unless and until the spouse of the owner executes may be invalidated by a spouse who has not executed the same or a like instrument, or a power of attorney for the execution of the same or a like instrument. However, when the homestead is conveyed or encumbered along with or in addition to other real estate, it is not necessary to particularly describe or set aside the tract of land constituting the homestead, whether the homestead is exclusively the subject of the contract or not, but the contract may be enforced as to real estate other than the homestead at the option of the purchaser or encumbrancer.
   2.  If a spouse who holds only homestead rights and surviving spouse’s statutory share in the homestead specifically relinquishes homestead rights in an instrument, including a power of attorney constituting the other spouse as the husband’s or wife’s attorney in fact, as provided in section 597.5, it is not necessary for the spouse to join in the granting clause of the same or a like instrument.
   3.  A conveyance or encumbrance or a contract to convey or encumber the homestead is not invalid under subsection 1 if any of the following apply:
   a.  The nonsigning spouse’s interest is terminated by divorce or other order of the court.
   b.  Section 614.15 or 654.12B applies.
   c.  Voiding the conveyance or encumbrance or the contract to convey or encumber the homestead would unjustly enrich the nonsigning spouse.
   4.  For the purposes of this section, “nonsigning spouse” means a spouse who has not executed a conveyance or encumbrance or a contract to convey or encumber the homestead, the same or a like instrument, or a power of attorney for the execution of the same or a like instrument. 
   5.  For the purposes of this section, a document that provides all of the following meets the requirement of a “same or a like instrument”:
   a.  Includes information sufficiently identifying the original conveyance, encumbrance, or contract.
   b.  Releases the homestead rights and surviving spouse’s statutory share in the homestead.
EXPLANATION
   This bill provides that the conveyance or encumbrance of a homestead by a married person who is the owner of the homestead is not automatically invalid if the person’s spouse has not joined in the conveyance or encumbrance. Such a spouse must take action to invalidate the conveyance or encumbrance.
   The bill further provides that a conveyance or encumbrance or a contract to convey or encumber the homestead is not invalid under subsection 1 if the nonsigning spouse’s interest is terminated by divorce or other order of the court, Code sections 614.15 (relating to the general statute of limitations for the failure of a spouse to convey or transfer an interest in real estate) and 654.12B (relating to the priority status of a purchase money mortgage lien over all other mortgages) applies, or if voiding the conveyance or encumbrance would unjustly enrich the nonsigning spouse.
   The bill defines a “nonsigning spouse” as a spouse who has not executed a conveyance or encumbrance or the contract to convey or encumber the homestead, the same or a like instrument, or a power of attorney for a same or a like instrument. A “same or a like instrument” document must include information sufficiently identifying the original conveyance, encumbrance, or contract and must release the homestead rights and the surviving spouse’s statutory share in the homestead.