Whether you're hoping to save money on a primary residence or investing in a rental property, a short sale can help you save money on a property the original homeowners can no longer afford. Squatters, however, can throw a wrench in the plan. A squatter is any person who takes up residence in a home she doesn't own, rent or have authorization to reside in, and squatting is increasingly common in a tough economy. Some groups -- notably self-proclaimed "sovereign citizens" -- sometimes execute false deeds and other forged paperwork to remain in a residence and make eviction much harder.
If you haven't yet bought the short sale property, the responsibility for removing squatters falls to the legal owners of the property -- either the bank or the current homeowner. When you sign the paperwork for the home, the bank should deliver the home free of squatters. Talk to the bank before purchasing the home and ensure it knows about and is taking action against the squatters. Don't sign any paperwork until squatters are removed. Removal by the bank, however, does not mean they won't come back; after you own the home, the squatters will be your responsibility.
Squatters are often homeless people who simply take up residence in a home out of desperation, and they may leave when the home is reoccupied. Some squatters, however, are wilier and may draft fake documents in an attempt to take ownership of the home. Document the squatters' presence before purchasing the home, and get all eviction documentation and police reports from the bank. Keep copies of the deed available at all times. You may need to show this information to the police or to a court if the squatters refuse to leave.
In many states, squatters have no specific rights and are treated as trespassers. Particularly if the bank has previously evicted the squatters, help might be only a phone call away. Simply contact the police after you purchase the house and tell them you need to have trespassers removed from your home. If the squatters return later, you can petition for a restraining order to keep them off your property.
If your state extends property rights to squatters, you might need to file a formal eviction proceeding. Eviction procedures vary slightly from state to state, but generally you'll need to provide the squatters with written notice to leave the property. Then you'll file a court eviction action in the county in which the property is located. You'll need to show evidence that the squatters are not authorized on the property and that you own the property. If you win the hearing, the squatters will have a set period of time to leave -- usually a few days. If they don't leave, you can have the sheriff forcibly remove them.
- ABC News: Anti-Government Sovereign Citizens Taking Foreclosed Homes Using Phony Deeds, Authorities Say
- ChicagoMag: Rodkin on How to Deal With Squatters in a Neighbor’s Foreclosed Condo
- Realtor: Evicting Squatters in REOs
- California Department of Consumer Affairs: The Eviction Process
- The Essential Handbook for Landlords; Karen Rittenhouse
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