My Law Clerk John Ellis weighs in on the Nevada Homestead Law.
Homestead law was unknown to the common law, and it was created by constitutional provisions and by statute. The Nevada homestead exemption derives from the Nevada state constitution, which provides that a “homestead as provided by law, shall be exempt from forced sale under any process of law.” See, Article IV, Section 30.
The Nevada legislature enacted what is now NRS 21.090(1)(l) to fulfill the mandate set forth in Nevada’s state constitution. The purpose of NRS 21.090(1)(l) is to secure to the debtor the necessary means of gaining a livelihood, while doing as little injury as possible to the creditor.
To this effect, the homestead exemption provided for in NRS 115.010(1) extends only to that amount of equity in property held by the debtor that does not exceed $550,000 in value for a married couple. The term “equity” means the amount that is determined by subtracting from the fair market value of the property, the value of any liens contracted for the purchase of the property.
Thus, the Nevada homestead exemption protects only equity in property, and, as such, it generally does not include any voluntary liens contracted for the purchase of the property, including any voluntary mortgages and deeds of trust placed upon the property by the debtor.
