Q: The house next door is vacant. The previous owners let it go into foreclosure and moved out. The bank that owned it has abandoned it. I know because I’ve tried to contact them, and they say they have no record of it. Can I go in, change the locks, fix it up and rent it out? Will I be protected under squatter’s rights?
A: The problem is, some entity does own that distressed house, even though it’s not “taking ownership of it” in the way that you and the rest of the neighborhood would like to see. If that foreclosure was not finalized — which is possible — the previous owner is still the owner. If it was finalized, the bank or whoever acquired the bank’s assets owns it.
Sorry, but a bank employee who wasn’t willing to dig into the property’s institutional history isn’t an official information source. Countless distressed properties seem to be disappearing in an ocean of red tape and red ink these days.
Research county records to locate the property deed, which will list the owner. Then make the right contacts from there.
Of course, you could try to take “adverse possession,” where you openly and without resistance “squat” on the property from five years to 25 years or more, depending on applicable laws. At that point, occupancy rights might revert to you.
But I don’t recommend it. The place could all be whisked away from you at a moment’s notice, and any tenants would be out on the street.
By the way, squatters who take over abandoned houses face more legal challenges in the United States than in most other countries. This is true even in so-called “front-door squats,” where occupants make little effort to conceal their presence.
A better option would be to make a cursory cash offer to the owner that would cover back taxes. This assumes you can locate the owner.
There also may be a local process for acquiring the home cheaply. At least 100 U.S cities have modified their abandoned-home laws in the last three years, and many are working with buyers who are interested in seized homes.
Some cities — such as Detroit, Atlanta and Cleveland — have clear-cut processes that allow adjacent owners to acquire abandoned properties.
Home-abandonment laws in this country essentially say owners must clearly demonstrate they have given up rights to a property. Long-term nonuse of a property isn’t quite enough to illustrate that, although it may help illustrate the owner’s intent to abandon.
On the other hand, leaving a house unguarded or free and open in a place that’s easily accessible can be considered abandonment in court. But there are no guarantees.
People who have moved into abandoned homes and started paying property taxes on them in recent years have had some success keeping them — or at least getting those tax payments reimbursed when the houses’ true owners reclaim them. But it’s a process fraught with uncertainty.
In the meantime, if you are entering the property to police it for trash, mow the overgrown grass or perform other upkeep, you are probably trespassing, at least technically.
Of course, few would complain about this case because it improves the neighborhood’s appearance. But if you were to mow into a cable or injure yourself there, you could face nagging legal or insurance complications.
To clean the place without such personal risk, contact the municipality or governing body where you live with a code-compliance complaint — be it for an overgrown lawn, trash, broken windows, vagrancy on the property, etc.
That should at least get an inspector out there who will assess the situation and contact the absentee landowner, if possible. If nothing else, the city will clear the lot and bill the owner.
By Steve McLinden of Bankrate.com