Monday, May 19, 2008

Evolving Squatters

Interesting article from Reuters regarding how with rising home foreclosures a whole new breed of squatters have evolved. This article makes squatters appear to be a new breed of law-circumventing entrepreneurs. And the methods used will make it hard for neighbors and police to detect they are squatters. Here are some of the key parts -

In some regions, squatting is taking on new twists to include real-estate scams in which thieves "rent out" abandoned homes they don't own. Others involve "professional squatters" who move from one abandoned home to another posing as tenants who seek cash from banks as a condition to leave the premises -- a process known by real-estate brokers as "cash for key."

... [Detective Erin Camphouse of the Los Angeles Police Department's Real Estate Fraud Unit] cited another case in which a Los Angeles man recently "leased" three abandoned homes to unsuspecting renters through Craig's List, the online classified advertising company. The renters paid first and last month deposits, moved their belongings in and lived in the homes for several months. "In one case, there were loose ends of rehab on the house that needed to be done and the crook wasn't coming through or wasn't completing it. So they offered to do it instead of paying rent. They put down tiles and carpet and all that kind of stuff. And it wasn't until the sheriff put the lockout notice on the door that they realized something was wrong."

... "We know the people are squatters. But we have had the cops there. We had the electricity shut off and the cops wouldn't put the people out. We have to go to court to get them out. They claim to be tenants," [ New Jersey real-estate broker Bill] Flagg said.

... "These people claim that they have a lease but they can't find it. And the property owner has been removed from the property or been foreclosed on, so they have no interest in confirming if this person is a valid tenant," [Bill Collins, president of the New Jersey chapter of the National Association of Real Estate Brokers] said.

... "And they have caught wind that what most of these banks are doing is giving cash for keys, so cash for eviction -- anywhere from $1,000 to $1,500. So here you have a squatter who goes into a property, takes up residence, tells you that he is a tenant, goes to court and says that he is a tenant.

"The rise of squatting is a natural consequence of these properties sitting there empty caused by the whole foreclosure crisis," said Steve Berg, a vice president at the [National Alliance to End Homelessness].

It is very interesting that the article describes this squatter as tenant or landlord is happening throughout the country. The article sites examples here in New Jersey, as well as Mass. and California. In states like Mass. and New Jersey where there are strong tenant rights laws (see here) this is an excellent scam. It will probably be hard to prove who is the a real renter in cases and who is a squatter - and that gray area will just get bigger and bigger.

Also, squatters are usually thought viewed as homeless vagabonds. But when they appear to be friendly tenants or are taking care and improving the property, neighbors will view things differently. Unless the neighbors know the squatters are living their illegally and for free - which seems unlikely the they will know since the police do not - there will be few complaints. Expect in the future to hear that people had no idea their neighbors were squatters - saying "but they were so friendly and nice."

1 comment:

NJ evictions said...

NJ evictions

On Thursday, the New Jersey Assembly voted for and approved a bill, A-1678, that will establish the New Jersey Homebuyer Tax Credit Program under the state gross income tax and allocate $100 million worth of refundable tax credits to new homebuyers in New Jersey this year. New Jersey homebuyers will receive these tax credits on a first come-first serve basis and will amount to either $15,000 or 5% of the home's selling price, whichever happens to be less. There will be no income limits to be eligible for the 2010 home buyer credit, which will be divided in equal amounts and distributed to mortgage holders over a period of three taxable consecutive years, although taxpayers will be required to use the home as their principal residence for the three-year period after the date of the purchase.