Illegal tenants pose a long list of challenges to REO agents, but there are steps agents can take to prevent squatters and mitigate their impact.
When FORCE member Frank Mazzuca, a real estate broker with Better Homes and Gardens Real Estate Mason- McDuffie in Walnut Creek, California, went to visit one of his vacant properties, he found a surprise—a tenant had moved in.
As the listing agent for the property, Mazzuca knew the property had never been for rent. Someone had accessed the key from the lock box, found a willing renter, and convinced him to pay a deposit and move into the home. Fortunately, Mazzuca was able to track down the culprit with the help of the electronic lock box at the property. While REO agents certainly don’t encounter these types of situations on a daily basis, these encounters are not all that rare.
The After-effects:
Squatting is a major issue for REO agents, especially in high-REO inventory markets. Squatting can significantly slow down the process of showing and selling a home. Agents are tasked with removing the illegal occupant, which can be time-consuming and dangerous. They are also often left with costly repairs or cleanup to complete after the occupant has vacated.
Sometimes, an illegal tenant will fight their eviction. In many states, a squatter gains tenant rights after occupying a property for more than 30 days, according to an article on the Columbus Realtors site. This becomes a civil matter that can take quite some time to resolve.
A Squatter-saturated Market:
In the Las Vegas metro, squatters are all too common. The Las Vegas Metropolitan Police Department recently estimated about 3,600 vacant properties had squatters residing in them, and they expect that number to be on the rise.
“More often than not, people inhabiting these dwellings are in the homes without the owner’s permission, they are not paying rent, and they are engaged in some kind of criminal activity,” said Keith Lynman, president of the Greater Las Vegas Association of Realtors, in an October press release about a new law regarding squatting.
“The safety of the real estate agents, protection of private property rights and cleaning up these drug dens and crack houses is fundamental to ensuring safer neighborhoods,” he said.
Unchartered Territory:
Squatting has become such a problem in Nevada that the state recently passed a new law to deal with squatters. A law that went into effect in October makes it a criminal offense for a squatter to re-enter a home after he or she is removed from it. The new law will help accelerate the process of removing these unlawful occupants.
Treating squatting as a criminal offense allows police officers to remove illegal tenants from a property more quickly, surpassing the lengthy eviction process required previously.
In Las Vegas, real estate agents can now fill out online forms rather than physically going to the police station to file a report when they encounter an illegal occupant in one of their properties.
FORCE member Jim Hastings, President and Owner of Hastings Brokerage in Las Vegas, is ecstatic about the new law. He served as the community advocate for the Las Vegas Metropolitan Police Department, and he spoke before the assembly and the senate in favor of the bill, which passed unanimously. Hastings praised the police force for their prompt response to squatting reports since the new law went into effect in October.
Squatter Spotting:
When a real estate agent encounters an illegal tenant or squatter, he or she should call the police immediately—whether in Las Vegas or elsewhere.
“My biggest concern is that agents will go rogue and take matters into their own hands, and we’re urging them to go to the police,” Hastings said, adding that the people illegally occupying vacant properties are “often criminals” and sometimes have weapons.
These are “extreme circumstances,” he says, advising agents to “take extreme caution.”
“Don’t go rogue,” Hastings says. “Let the police do their job.”
If the keys to a property go missing, Hastings advises agents to re-key the property immediately, and the follow up by inspecting the property every day for at least a week.
Staving Off Squatters:
Many agents also take steps to prevent squatters by attempting to make their vacant properties look occupied. For example, Mazzuca says to keep indoor lights on a timer, but also vary which lights turn on and what time they turn off. Keeping curtains or blinds shut will also prevent people from seeing at a glance that a property is empty.
Mazzuca has property locks changed so the main door requires a different key from any side or back entrances. Anyone who accesses a key from the lock box and enters the property will have to do so through the front entrance where others might observe them coming or leaving.
“What I found in New York is it is best not to put the lock box where it is visible,” says Kendrick Kissoon with Charles Rutenberg Realty in Plainview, New York. “Squatters will break the box and move into the property.”
Taking measures to make a property look occupied may help stave off squatters, but agents should remember if they do encounter a squatter, the first step is to call the police.
Tips for Preventing Squatters:
- Have lights on a timer, and change the timer and which lights come on regularly.
- Use an electronic lock box.
- Keep the lock box out of view.
- If keys are missing, re-key immediately.
- Give neighbors your contact information, so they can alert you if they see suspicious activity at the property.