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What To Do If A ‘Squatter’ Occupies Your Bank-Owned Property

Some people are moving into vacant properties claiming to be victims of rental scams and demanding money from the homeowners (usually a bank) to vacate.

A team lead in Las Vegas is dealing with what she says is a “squatter” situation; the man moved in on Memorial Day, the day before the house was to go on the market.

We’ve all heard the sob stories about renters finding homes on Craigslist that weren’t actually for rent — they’re scams.

Well, what happens when someone moves into one of your listings claiming to have been “had” in this way?

That’s the situation Laura Harbison, a team lead with Realty Executives of Southern Nevada, is dealing with right now (and she’s dealt with it before).

The “squatter” moved in on Memorial Day, just a couple of days after home renovations had finished on the property, Harbison says. She’d planned to list it on the market literally the next day — Tuesday, May 30 — but now she’ll be waiting a few extra weeks while the eviction process is carried out.

Harbison says it’s very common for someone illegally squatting in a home — occupying it without a lease — to claim they’ve been scammed by a third party on Craigslist. “In some cases — it hasn’t happened with this one yet, and I don’t know if it will — the banks will offer them money to leave in an early fashion as if they were actually a tenant or what-have-you,” she said.

She doesn’t believe this occupant was taken in by a fake Craigslist ad, however. “He cannot produce the Craigslist ad,” she noted. “He cannot produce any proof of contact with anyone. When we asked him what phone number he called to talk to the owner, he said, ‘I erased it.’”

The Back Story…

Harbison deals with quite a few bank-owned properties in her market and has a process for doing so, which includes having employees regularly check up on the homes to make sure everything looks and seems copacetic.

“One of my employees was checking on Memorial Day, probably a day they didn’t expect us to be open and working,” she said. “We caught two couples in the process of moving in. They ran in the house and locked the door and wouldn’t talk to my employee; the police came and they wouldn’t talk to them, either.”

She says that the home had no for-sale signs posted, but it did have signs indicating that it was a bank-owned property being managed by Realty Executives — several of them.

“We put them on the inside and outside to try to help people from being scammed on the off chance someone does break in and try to show it,” she explained. “We’ve got notes stuffed in drawers and taped under sinks because for a while it was really rampant, and we wanted to make sure no one could be taken advantage of.”

The property was a foreclosure that was lived in during the foreclosure process, and it needed a lot of attention before it was habitable. “We had to have HAZMAT in,” she said, before they could have the carpets removed and replaced. “The repairs were done on Saturday, and he moved in on Monday.”

A History of Occupation…

Sometimes, Harbison says she gets phone calls from people who have seen her name on a listing and want to check on a property that seems too good to be true. “I have been called multiple times by people who were smart enough to do their due diligence,” she said.

And this isn’t the first “squatter” she’s dealt with. She says banks have eased off their practice of paying people to leave because “obviously it’s a self-fulfilling prophecy,” but before that happened, she had one man who squatted in three different bank-owned houses that Harbison was managing “and he got cash for all of them,” she said.

“The police have a task force for it,” she added. “But if he hadn’t been so brazen … he kept coming back to my properties, and I’m like, ‘You think I’m not going to remember you?’ It’s not like he’s using a different name or anything.”

While she waits for the eviction process — which she says typically takes three weeks — she’s also thinking about what they might need to do to the home before it’s ready for listing (again).

“Depends on how much they hunker down,” she said. “I’m sure they’re not vacuuming the carpet. It’s up to the bank at this point; they can offer him money to move or go straight to the constable.”

Harbison says she always tries to talk to the people occupying her properties to ascertain whether or not they’re a victim of a scam “just in case.” She adds that in cases where someone really was scammed, “they’re going to pack up and leave.”

If they don’t, then it’s up to the bank how to handle the squatter: through cash or through the courts. Harbison will help them execute that decision and has a process serving company she uses to work with evictions.

And she adds that although many people think the bank is the only institution getting the short end of the stick in these scenarios, that’s not the case.

“It harms everybody,” she said. “We’ve been managing this property and the repairs since August; I’m paying someone to go check on this house, and I don’t get paid anything other than getting to sell the house. And he’s in there stopping me from selling the house.

“People don’t think about the bigger scope,” she added.