Realtors' Latest Challenge: A Surge of Squatters

Monique Bryher, a Realtor with Pinnacle Estate Properties in Los Angeles' San Fernando Valley, has just about had it with squatters. In recent months she's encountered people living in four vacant bank-owned homes she's trying to sell. In one case, she says, the renegade residents "threw weekly rave parties and charged admission," leaving behind vandalized cars and a street littered with beer cans. (Photos of what they did to the house are above and at left.)

In previous posts we've written about groups like Take Back the Land, whose members seek to house otherwise homeless people in vacant foreclosed properties. The current crop of squatters, Bryher says, are "more opportunistic people, not some poor family desperate for a place to live."

According to many Realtors, the situation is becoming more common -- and more dangerous -- as the backlog of foreclosed properties increases.

Phil Hanner spent 24 years in law enforcement before moving into real estate seven years ago. These days he handles a lot of short sales and foreclosures. After stumbling on a squatter in one of his listings in Daytona Beach, Fla., he developed a new routine. For safety reasons, he now walks the perimeter of the property looking for signs of forced entry before letting himself in. He also lets someone know his whereabouts before he goes to a foreclosed home.

Knowing Squat

The truth is, it's pretty easy to become a squatter. It is of course trespassing -- which is illegal. Without wanting to provide a "how-to" manual here, what many squatters do is doctor up a lease agreement (obtainable at stationery stores) and with aforged "lease" in hand, get a driver's license to match the address and have the utilities turned on.

Squatters use the address to enroll kids in school, get mail delivered, and are able to basically live rent- or mortgage-free until someone notices and decides to take action.

Not every foreclosed property is put on the market immediately; banks hold a great number back to avoid flooding the market and forcing prices down. These homes, often vacant for months, provide squatters with an opportunity to move in. And even once they are found out -- usually by a real estate agent when the property is listed -- it can take up to four months to formally evict them.

The potential consequences of squatters moving in down the block go beyond a handful of surprised real-estate agents. "Properties are seriously damaged," says Bryher, who has encountered squatters on her own street. "Fixtures ripped out, holes punched in walls, lawns die, windows are broken and appliances are removed when they leave." (The above photo, says Bryher, shows how squatters entered a home by breaking the pane of a French door and entering through a doggie door.)

The problem has reached the point that Gary C. Dunn, publisher of the Caretaker Gazette, says his publication, although designed to match those seeking short-term stays as house-sitters with people who need them, is seeing interest from lenders who want someone on-site while a bank-owned property is being marketed.

Bryher has taken matters into her own hands -- in one case she threw the squatters' belongings on the front lawn ("I was told that's stealing," she says) -- but Stevie Michelle Cline, a lawyer in Orient, Ohio, advises individuals against trying to remove squatters on their own. Police, she says, are the first step for complaints, although they may want to monitor these homes for a while to watch for other possible illegal activity.

A more effective way to remove squatters may be to contact the public utilities -- water and sewage offices. Cline also suggests contacting the entity responsible for housing code enforcement in your area.

The owner of the property, in most cases a lender, may be unaware of the squatters. It is the property owner's responsibility to evict the squatters. But to do this, they first have to know about them.

Also see:
Seller Financing: An Idea Whose Time Has Come

Why Are So Many Real Estate Deals Falling Apart?

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