§ 704.960.Proceeds From Voluntary Sale of Homestead

Title 9. Enforcement of Judgments · Division 2 · Chapter 4. Exemptions · Article 5. Declared Homesteads · Enacted 1982 · no amendments on record · Last verified July 28, 2026

In one sentenceSection 704.960 exempts the proceeds of a voluntary sale of a declared homestead in the § 704.730 exemption amount for six months after the sale, and lets a debtor carry that same declared status forward to a replacement dwelling by recording a new declaration within that six-month window.

Full Text of § 704.960

Text sizeJump to: (a) (b)

(a) If a declared homestead is voluntarily sold, the proceeds of sale are exempt in the amount provided by Section 704.730 for a period of six months after the date of sale.

(b) If the proceeds of a declared homestead are invested in a new dwelling within six months after the date of a voluntary sale or within six months after proceeds of an execution sale or of insurance or other indemnification for damage or destruction are received, the new dwelling may be selected as a declared homestead by recording a homestead declaration within the applicable six-month period. In such case, the homestead declaration has the same effect as if it had been recorded at the time the prior homestead declaration was recorded.

Plain-English Summary

This is one of the clearest reasons to record a declared homestead rather than rely on the automatic exemption alone: it protects proceeds after a voluntary sale, not just a forced one. If a declared homestead is voluntarily sold, the proceeds are exempt in the amount § 704.730 provides, for six months after the sale date.

That six-month window isn't just a grace period — it's also a bridge to a new home. If the debtor reinvests those proceeds in a new dwelling within six months of a voluntary sale (or within six months of receiving execution-sale, insurance, or other indemnification proceeds), the debtor can select the new dwelling as a declared homestead by recording a new declaration within that same six-month period. When that happens, the new declaration is treated as if it had been recorded back when the original declaration was recorded — preserving the priority date that matters for § 704.950's lien-attachment protection.

Frequently Asked Questions

Are proceeds from selling a declared homestead protected even in a voluntary sale?

Yes. Section 704.960(a) exempts the proceeds in the § 704.730 amount for six months after a voluntary sale, unlike relying solely on the automatic exemption, which is framed around forced sales.

Can a debtor move the declared homestead protection to a new home?

Yes. If the proceeds are reinvested in a new dwelling within six months of the sale (or receipt of certain other proceeds), recording a new declaration within that same period lets the new home qualify as a declared homestead.

Does the new declaration lose the original recording date's priority?

No. Section 704.960(b) treats the new declaration as if it had been recorded when the prior declaration was recorded.

Amendment History

Added by Stats. 1982, Ch. 1364, Sec. 2. Operative July 1, 1983, by Sec. 3 of Ch. 1364.

Source & verification. Section text is reproduced verbatim from the Deering's California Codes Annotated / vLex. Enacted by the California Legislature. Last verified July 28, 2026. · Official source

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