Squatters and real estate – a reality in today’s economy

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Although some squatters move into vacant homes to live rent free, others do so to take advantage of adverse possession laws. The squatter movement has grown, not just in the U.S. but significantly in Europe as a means of social change. Activists advocate squatting as a response to Europe’s high unemployment, austerity, decreased public housing and declining living standards. Currently touted as “alternative housing,” squatting in the U.S. increased during the time when foreclosures and vacant homes skyrocketed after the financial crisis.

A recent story, about squatters taking over the Florida home of an active duty soldier who is stationed in Hawaii, highlights a recent trend. According to Florida’s WFLA Channel 8, the home owner claimed people broke into his home and changed the locks; however, the squatters who moved into the soldier’s home claimed to have a verbal agreement with the home’s caretaker to live in the home while making repairs. When the Afghanistan veteran planned to moved back to Florida, he was caught off guard when he was told removing the squatter was a civil matter and had to go through the eviction process to rid the home of the invaders. As the story gained national attention, veteran groups hired an attorney to begin eviction. However, it appears that the combined pressure has facilitated the squatters’ departure; but not without making a statement of their own by leaving the home in disarray and their dogs to roam freely.

Two local cases of squatting were reported last year, where defendants claimed “sovereign rights.” A vacant, bank owned Waldorf home was reported to be occupied by seven individuals who claimed to have the right to occupy the home because they are “sovereign citizens.”

A March 18, 2013 Washington Post article (Moorish American national’ charged with trying to take mansion) highlighted the other case, where an individual also claiming sovereign rights moved into a vacant $6 million Bethesda home listed for sale. The squatter allegedly attempted to change the tax records to indicate he was the owner by appearing at the Montgomery County court house and presenting “historical” documents and maps. But the county clerk turned him away saying that a “proper deed” was needed for such a change. The squatter reportedly went as far as emailing the listing agent cryptically claiming ownership. According to news reports, the squatters in both local cases were charged by police.

The Bethesda case emphasizes that bank owned foreclosures are not the only homes occupied by squatters, vacant homes listed for sale are also targets. Nationwide reports about squatters in upper bracket luxury homes increased last year, as well as the attention to “squatter’s rights” and adverse possession laws.

Last July, Sheree R. Curry of AOL Real Estate (Squatters Beware: States Are Revising Adverse Possession Laws) highlighted the case of a squatter who moved into a Boca Raton, FL mansion listed for sale. The squatter was eventually “locked out” of the home, but the events moved the community in an effort to change Florida’s Adverse Possession laws. And although adverse possession laws vary throughout the country, Curry reported that some states are revising these laws to protect home owners. New York and Washington had already changed adverse possession laws when Florida changed theirs to prohibit “acquiring title to real property by possession”; which went effect July 1st 2013.

by Dan Krell © 2014

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Take care of your vacant home

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According to a 2009 USA Today report, 1 out of 9 homes are vacant. Although, more so in recent times, “foreclosure” may come to mind when you hear “vacant home;” however, there are other reasons why a home may be vacant, which may include: the home owner bought their new home prior to selling; seasonal travelers head to warmer climates during the winter; job relocation; divorce; or an unsettled estate. Regardless of the reason for leaving your home vacant, making preparations prior to leaving may make your return more welcoming.

Even if your home is listed with a Realtor®, don’t assume that the home will be looked after; take care of your asset and ensure that your vacant home is cared for. Consider having a trusted person in charge of checking the vacant home regularly. Besides collecting un-forwarded mail, this person can take care of issues that may arise while you’re away.

As we are headed into winter, consider winterizing the home. “Winterizing” is jargon that describes the draining of water and pressure from the plumbing system. Experts recommend winterizing your home if you plan leaving your home vacant during the winter months. Winterizing your home may reduce the risk of bursting pipes as well as possibly reducing damage to plumbing fixtures. When winterizing and de-winterizing your home, consider hiring a licensed plumber because you may encounter unexpected high pressure, and the winterizing process may cause increased stress on the plumbing system.

Check the drainage around your home to ensure that water is removed away from the home as intended. Test the sump pump (if you have one) to ensure it is in working order. Blockages from leaves and other debris can build up on the roof and gutters as well as around basement stairwell drains (which are notorious for clogging and may cause a flooded basement). Clogged gutters and drains may cause roof and basement leaks even when a home is lived in; certainly if unattended to, can wreak havoc on your vacant home.

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Cold weather is also a time when pests are seeking a warm shelter; you don’t want to return to the surprise of a home that has been infested with mice, raccoons, or other pests. A licensed pest control expert may be able to assist you in preventing an infestation by searching for and sealing pest related access points.

Theft and vandalism is often a primary concern for vacant home owners. Besides being the target of thieves, vacant homes often become the focus of vandals. Besides ensuring that valuables are safe, make certain that all doors and windows are secure.

Finally, consult with your insurance agent about your home owners’ policy. Don’t assume that you’re covered just because you have insurance. Besides describing what the insurance company deems as “vacant,” many home owners’ policies have coverage limitations when the home is considered vacant. Your insurance agent can assist you in determining if you need additional coverage while you’re away from your home.

Taking care of a vacant home is not only for lenders taking possession of foreclosed homes. Whatever your reason for leaving your home behind this winter, think ahead and take care of your asset. Consider taking preventative measures to keep your home safe and intact as well as arranging for someone to take charge of the home while you’re away.

by Dan Krell
© 2010

This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws.

Vacant homes represent more than empty dreams

by Dan Krell
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One result of the recent mortgage crisis has been an increased foreclosure rate. Many home owners who could no longer afford their mortgage payments found their homes foreclosed on by their lenders. Many of these homes tend to be vacated many months prior to the lender taking possession, while others are vacated after the lender takes possession.

Vacant homes are cropping up everywhere. There are even boarded up homes in some communities as well. (Homes are boarded up if they have been vandalized or condemned in order to keep trespassers out). The United States Census (Census.gov) has estimated that there was an average of 2.7% homes vacant in 2007 for the Washington, DC region (including northern Virginia and Suburban Maryland); this is a 51% increase from 2005. There was an increase in vacant rental properties as well, 10.4% in 2007 up almost 15% from vacancy rates in 2005. As foreclosure rates continue to increase, the number of vacant homes will also increase.

Activity in and around a foreclosed home is significantly reduced because it is unoccupied and the lengthy time needed to bring the home to market. Because of this, lenders take extraordinary measures to secure vacant properties; some typical securing procedures include winterizing the home (turning off water supply and draining all pipes), changing deadbolt locks, and sometimes installing remote close circuit video. However, even a secured home can conceal and harbor many things, including vermin, homeless/squatters, and gang activity.

If a home is vacant for a short time, the risk of infestation or trespassing is reduced due to the short period of inactivity in and around the home. However, since the average time on market for homes for sale has increased significantly over the last year, the home will be vacant longer increasing the risk of vandalism, damage and trespassing.

Current County code can condemn a home if it has been vacant for a year and it has been cited for five or more maintenance code violations. If the home is condemned, the owner has thirty days to comply with the inspectors orders or the home can be demolished (at the owner’s expense). To avoid demolition, these homes can be referred to one of the many rehabilitation programs that were designed to maintain our neighborhoods. Unfortunately, foreclosures are usually owned and managed by large corporations where no one takes a personal interest in the daily happenings of the foreclosed homes.

Vacant homes are presently a growing problem nationwide; however, pockets of vacant (and abandoned properties) have plagued large cities for years. In the constant struggle to reduce the number of vacant homes and revitalize affected neighborhoods, the United States Conference of Mayors (USMayors.org) task force on vacant and abandoned properties published “Combating Problems of Vacant and Abandoned Properties” (2006). The report highlighted housing initiatives from twenty-seven cities to reduce abandoned and vacant homes. Many of the plans emphasized programs to take possession of vacant homes, programs to register vacant homes, as well as many programs to assist home buyers to purchase vacant homes.

In order to address this growing problem, additional local housing initiatives (such as incentives for owner occupants to purchase corporate and vacant homes) should be considered.

This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of April 14, 2008. Copyright © 2008 Dan Krell.

Does a Vacant Home Sell Faster?

by Dan Krell © 2007
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When I list a home I invariably get the question, “Don’t vacant homes sell faster than occupied homes?”

It is an interesting debate in the real estate industry. Well, not so much a debate as it is a difference of professional opinion and culture. The rationale for vacating the home prior to listing it includes ease and convenience, for both the home seller and the prospective home buyer. After all, the home seller will not have to be bothered with keeping the home clean on a daily basis anticipating home buyers coming to see the home. Additionally, strangers won’t be traipsing through the home at odd times or while the home seller is taking a shower (which does happen).

For the prospective home buyer, viewing a vacant home can’t get any easier. There are no restrictions on showings; there aren’t any worries on going too late in the evening or too early in the morning. Also, there aren’t any worries on letting out pets because there are none in the home.

When the real estate market was on a run away pace, the advice of vacating a home may have been harmless as well as making some sense. The thought was, “Why not move out before listing? Some one will be moving in the home in several weeks.”

Now that the real estate market has become (or becoming) more realistic, the reality selling a vacant home is setting in. An empirical study conducted by Chien-Chih Peng and published in the June 22nd 2004 issue of the Appraisal Journal concluded that vacant homes take longer to sell as well as selling for less than occupied homes.

While viewing a vacant home, you notice traffic patterns as well as furniture footprints. If you have ever moved furniture out of a room, you probably noticed that the room looked a bit shabbier empty than with furniture because of the marks left behind from furniture and traffic through the room. You tend to notice more imperfections than if the home was furnished. Additionally, if the home is on the market for an extended period, dust buildup and an overgrown lawn becomes unsightly. Sometimes an unused toilet gets a ring that will become a home buying deterrent. If the home is not maintained on a regular basis, the vacant home looks as if it is an abandoned home that has no appeal.

Why do home builders fully furnish their models? It’s not because they want to advertise someone’s furniture, it is because they want to give you an idea of how the space can be used. Home builders know that selling a home is much more than a financial investment, it’s an emotional investment. Vacant homes are bleak and sterile, whereas a furnished home can show its warmth and connect emotionally with the potential home buyer.

Finally, savvy home buyers may look at a vacant home as a sign of a desperate home buyer in need of a quick sale. A vacant home may be an invitation to lower offers because it is thought to be a financial waste or strain on the home seller.

The message is clear. Whether or not you plan to live in your home during the sale, keep your home furnished modestly, clutter free, and clean.

This column is not intended to provide nor should it be relied upon for legal and financial advice. This column was originally published in the Montgomery County Sentinel the week of 2/5/2007. Dan Krell © 2007.