Abandonment

I recently added an Escrow Glossary of Terms to my website. You might want to check it out. The first word is a rather sad one, “abandonment.” Of course, the list is alphabetic. “Abandonment” is an official term in real estate the means the voluntary relinquishment of rights of ownership or another interest (such as an easement) by failure to use the property, coupled with an intent to abandon (give up the interest). This subject is relevant  because in your search for a fix-n-flip project to invest in, you might run into a house that looks abandoned. It may be. It may not be.

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Intention to Abandon

According to the Letter of the Law, volume 13, number 4, 1999, by Judon Fambrough, “an essential element of abandonment is the intention to abandon and such intention must be shown by clear and satisfactory evidence.” Judon goes on to say that non-use and failure to maintain and repair property is not sufficient evidence on its own to prove abandonment.

While title to real property cannot be lost by abandonment, it can be lost in other ways. Land title can be lost by adverse possession when another person possesses and uses the property without permission for a specified time. Real property can also be lost by forced sale when a sheriff sells the property for delinquent taxes, a trustee sells the property for delinquent mortgage payments, or a homeowner’s association sells the property for unpaid assessments.

Adverse Possession

On the LoneStarlandLaw.com website, David J. Willis explains that adverse possession refers to circumstances under which one may lawfully lay claim to ownership of property not originally one’s own. Classic examples include the rancher who fences in an adjoining tract and pastures his cattle there for a decade and the family that gradually takes over the empty lot next door.

According to Willis, foreclosed houses are often perceived to be abandoned because they are sitting idle. These houses are not abandoned and the courts have tended, he says, to protect the interests of the absentee lenders who are now owners.

Facts and the Law

Everything about an adverse possession claim must be based on facts and the law. For one thing, to make a legal claim of adverse possession, you have to have a legal description of the boundaries. The boundaries cannot be uncertain. Paying taxes or back taxes on a property does not guarantee possession either if the original owner shows up, it does however prevent the eventual sale of the property in a tax sale. If a title search reveals an owner of record that can be located, it may be better to contact them and buy their interests.

Willis also says, the law is does not condone or contemplate the use of the adverse possession rules as a business plan for aggressive investors. This strategy is involves breaking the law, for example, breaking and entering, file false instruments, slander of the title, and fraud.

Knock

If you find a house you think is abandon, fall back on my strategies for finding motivated sellers. Knock.

When you find a home that looks abandoned, one that might be up for sale if you can find the owner, knock on the door. Knock on the neighbor’s door too. If no one answers, ask about what is going on with the property. Leave behind your business card. Write down the addresses and research the property from your computer. Write about the house in your journal of prospects and follow up every month. You can keep an online journal too, photographing the house and making notes to help you remember to follow up.

Remember the door hangar. It can be something simple that you make yourself with a hole punch and rubber band, or something you more polished that you order form an online printer. It should say something like, “We buy houses. Call 512-555-1212.” If no one answers when you knock, leave one of your door hangars.

When you have contacted the buyer and have done your research on the value of the property and know how much it will cost to remodel the property, I can help you with a loan program to purchase. Your fix and flip or rental property. I am happy to announce that a loan program is now available to purchase rental property for the purpose of building your short-term or vacation rental property business.

We have funds available for single-family residential property, condos (warrantable only), and ocean beach front property.

I would be pleased to have you call or e-mail too.

 

Pat St. Cin

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

 

References

LoneStarlandLaw.com website, David J. Willis

Letter of the Law, volume 13, number 4, 1999, by Judon Fambrough

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