Honey...We've Got Squatters! Can You Believe It?
Last year I read about a Realtor® in my area who became a victim of a very clever maneuver.
It appears that there are a few organizations that are seeking out what they call 'abandoned' properties and finding and placing tenants in these properties. Yes, they are charging and collecting rent. It is happening in neighborhoods of all locations and price ranges. BEWARE: You can expect the squatters to soon be coming to a neighboorhood near you! And for them to occupy a home in the price range of $350,000 is not of the question.
A local TV station, Fox News, did a story in 2014 that caught my attention because it affected a fellow Realtor®. Then a more recent story appeared later the same year. It seems that the 'tenants' have a lease from someone and may well be paying them rent.
During my research one name kept poping up: 'Sovereign Citizens'. Whatever they call themselves, they are causing problems because one of the tactics used is to slap bogus liens on properties which get held up in the court systems. If you have the stomach for it, you can watch the interview. Hard to find and even harder to prosecute apparently.
In Illinois, there is a provision called 'Adverse Possession' that is very specific about what the terms are. It appears that there are other terms within such provision that I need to study further to understand how this can happen and at this time, little can be done about the problem.
I recently became a victim. My deal is where the property is investor owned and had been vacant during the construction period. Seems that someone timed things just right; after the property was rehabbed. What perfect timing to move into a virtually new home. Just days from closing; the deal being in underwriting and it was discovered that a lien was on the property and has a court date nearly six weeks further out. Anything can happen given that amount of time.
I must admit: in all my years as a Realtor® this has never happened before. Guess you live and learn.
After reading the termite blog by Margaret Rome, Baltimore Maryland one can only hope that the tiny critters are easier to get rid of. All I can say at this time: It's complicated.
My advice: watch your deals closely, especially when working with investors. It seems to not matter whether the property is occupied or vacant, although it seems to happen more easily with vacant properties.
If anyone has had such experience, I would certainly love to hear about.