As someone who works with investors looking for their next flip, or property for a rental home to put in our property management program, this question has come up. ( not as much as you think, but something to be informed about)
Squatter: squat·ter ˈskwätər/ noun
1.a person who unlawfully occupies an uninhabited building or unused land.So now you are in the process of buying a foreclosure/bank owned property, and it is discovered or appears that someone is making this property their temporary home. Here is some great information from Realtor.com.
Evicting Squatters in REOs
Handle any unwanted residents on your new propertyBy Gilan GertzAs an owner of a newly purchased REO, you might be unpleasantly surprised to find squatters living in the home. You can buy an REO, or real estate owned property, directly from a bank, often at a discount. An REO is a home that the bank or other mortgage lender reclaimed because the homeowner did not make mortgage payments on time. After the bank did not succeed in selling the house at foreclosure auction, the bank took ownership of the property, cleared all liens against it, and marketed it as an REO. The bank selling the REO is supposed to evict the previous homeowner, but you might still find the previous homeowner living there. Or, during the time lapse between the previous owners’ losing the home and you buying the home, squatters might have moved into the vacant property. You will have to evict the squatters.If the previous owners won’t leaveThe bank selling an REO is usually the party responsible for removing the previous owners and squatters on the property. When you close on the purchase of the property, it should be unoccupied. If not, speak to the bank about its responsibility to remove squatters.If the bank is unresponsive, speak to a real estate attorney. An attorney can explain state eviction laws, so you can proceed with eviction on your own. Be aware that when you seek financing for a new REO, lenders might turn you down if they know that the REO is occupied. They know that evicting squatters can be a lengthy and difficult process, so they view a loan on an occupied home as risky.Are they squatters or trespassers?As the new owner of an REO, you might find that strangers have moved into the previously vacant property. Once you notice signs of occupation, such as food wrappers or clothing strewn around, make a plan to move the squatters out and keep them out.Before taking legal action, determine whether the people living in your home are squatters or trespassers. Squatters move into an empty property, and after they have been living there for a while, many states give them rights. In contrast, trespassers break windows or doors to enter the properties. In that case, they are breaking the law.Speak to the local police department about your situation. If they agree that the occupants have trespassed, they can arrest them for committing a crime. After the police arrest and remove the occupants, repair broken doors and windows, and change the locks. Consider installing an alarm system as well.Obtain legal help if the police are unable to help you, or the status of the occupants is difficult to discern, contact a lawyer who is experienced in squatters’ rights. A property lawyer should be able to help you reclaim your property.Be prepared to show proof of ownership. Your attorney will need all the documents from the purchase, including the title. To ensure that the squatters have not tried to take ownership, your attorney will have to run a title check.Evict the squatters. Even if your attorney is still researching legal aspects of the situation, be sure to physically evict the squatters. Avoid confronting the squatters on your own, as that subjects you to the risk of physical attack. Instead, hire an eviction specialist. A professional eviction company will handle the eviction, allowing you to avoid personal confrontation.After the squatters have left, again you should change all locks, repair broken windows or doors and consider an alarm system. Your attorney will probably instruct you to refile ownership with the county court. You will provide all your ownership documents, and file a repossession claim. By doing so, you will re-establish right to the property, giving greater muscle to the police to evict any squatters who try to return.