At least as it currently stands, this case seems to mostly have to do with difficulties of eviction, especially when the house is in a weird ownership status. He hasn't been living on the land nearly long enough to actually have any real rights through adverse possession (roughly, "squatter's rights"), and could be evicted by the owner at any time. He just seems to think, possibly correctly, that eviction is unlikely for a variety of reasons, and so hopes to stay long enough that adverse possession will become relevant, if he de-facto lives in the house long enough without being evicted.
The main thing that keeps him "legal" in a certain sense is that, due to particularities of Texas law, once he's filed that document, it's a civil dispute over ownership, not a criminal case, so police won't evict him for trespassing unless a court resolves the civil dispute first, and orders eviction. He's betting that nobody is going to get around to pursuing that case, even though they would probably win if they did (since he does not in fact own the property, either de jure or through sufficiently long de-facto possession).
Under Texas law it likely will take 10 years for the squatter to acquire title via adverse possession.[1][2] In the meantime, whoever is the true owner can sue in civil court at any time to have the squatter evicted.
I can see why the police didn't want to get involved when it was only the neighbors who complained. If the record owner were to complain (the one who walked away), the police might well arrest the squatter for trespassing.
In Illinois you get 20 years, and must possess the property continuously, in actuality, open and notoriously and exclusively. The occupation also must be hostile. In all these regards, the burden of proof is on the person trying to claim adverse possession.
My question for you, as a lawyer who might know this: can you beat an adverse possession claim simply by giving the squatter permission? Would a written notice permitting occupation for, say, 60 days, reset the clock on "continuous hostile actual occupation"?
> must possess the property continuously, in actuality, open and notoriously and exclusively.
That's pretty much the law everywhere in the U.S. (save perhaps Louisiana, which has a system rooted in Napoleonic law and not English common law). The mnemonic is ONCHA - open, notorious, continuous, hostile, and adverse.
> can you beat an adverse possession claim simply by giving the squatter permission?
I don't recall any cases off the top of my head. I doubt that an owner could unilaterally transform hostile possession into non-hostile possession; it'd be too tempting for the owner to try to fabricate backdated evidence of consent.
(Your question brought to mind a line from Henry Fielding, which my torts professor used to illustrate how consent is sometimes a defense: He in a few minutes ravished this fair creature, or at least would have ravished her, if she had not, by a timely compliance, prevented him. [3])
Given the article it sounds like he's satisfied all of the conditions, everyone wants him out (hostile), he's filed the paperwork (open), he's had it written about in the paper (notorious), and he's established residence by camping in the living room.
Even if he doesn't get the house he's still living rent free.
In South Carolina, I met a cabbie who was renovating a big Federal style house in the north part of town. No furnace, and certainly no AC. He was also camped out in the living room, and doing all of the work himself. Got a $20,000 community reinvigoration loan from the government to help him out.
> can you beat an adverse possession claim simply by giving the squatter permission?
You can beat it with a peppercorn:
> [A] peppercorn rent is often used as a form of nominal ground rent where a (potentially substantial) premium has also been paid on commencement of a long lease of, say, 99 or 125 years (a "virtual freehold"). The notional collection of the annual peppercorn rent helps to maintain a formal Landlord and Tenant relationship between the two parties, precluding the risk of a claim for adverse possession from the tenant arising, were no consideration to be paid for an extended period.
(In this case, a 'peppercorn' is any tiny amount of money or other consideration, which is required to make a contract valid. It may, in fact, be a literal peppercorn.)
Could this ignite a Texas land rush to occupy foreclosed homes? Possibly. But what would happen if the new occupants struck deals with the owners for them not to complain?
Right of redemption laws allow the original owner of a foreclosed house to seek redemption on the property if they are able to come up with the money they need in a specified amount of time. The redemption is transferable and in essence is just as powerful as having the deed of the property itself.
I think his assumption is that the owner wouldn't want to "out" themselves as they are on the lamb from tons of mortgage back payments. Once the owners emerge from "MIA" to try to get him off the property, the bank would sick their lawyers on the owners.
So in this case, it's a matter of "I dare you to come clear me out from your house - but if you do, here are some banks that would be really interested in your current phone number"
"If he wants the house, buy the house like everyone else had to," Lowrie said. "Get the money, buy the house."
My personal opinion is good on the guy, if hes smart enough to find a way to legally obtain a house like this then more power to him. Mrs Lowrie is just pissed she didnt get the same opportunity.
This person is gaming a law designed to protect homeowners from spurious litigation†. He knows full well he has no moral right to the property ("adverse selection" codes are not an invitation to utilize unused property). He's taking advantage of someone else's misfortune in a long shot bid to poach property.
It seems weird to me that anyone would cheer him on. Within reasonable limits, a shorter time based hurdle to adverse possession claim is more homeowner-friendly. Texas is on the lower side at 10 years. The only possible outcome to a spate of bad-faith adverse possession claims is for the state to jack the limit up to 20 or 30 years.
† More commonplace application of adverse possession: I build a new garage, but somehow get the property line wrong and impinge on my neighbor. Nobody notices. Later, I sell my house to you. A couple years after that, my old neighbor sues you.
I agree those are the most common uses, and one of the historical justifications--- to keep a settled de-facto property situation from being thrown into chaos by someone digging up a forgotten 90-year-old document.
But I'm not sure that the doctrine doesn't also have a historical purpose of inviting people to make productive use of abandoned/derelict property. Especially in pre-20th-century legal treatises, that seems to be taken for granted as one of the reasons for the adverse-possession doctrine, and in the American West it was frequently used that way, as people took over farms or ranches that had been abandoned by the landowner, e.g. because he moved away without disposing of it, or died with heirs who never showed up to take possession.
The Homestead Act of 1862 was even more or less a formalization of one particular kind of squatting, on government land, which previously had been done under the adverse-possession doctrine (with the U.S. losing title for not making use of the property).
>"He knows full well he has no moral right to the property
Throughout the Americas, the same logic that one can claim ownership of unused land underpins most land titles - e.g. the original entitlement of most of Texas was made on the basis that the land was underused. One need only look at the sovereign land grants which most title histories in the US begin with.
If you go far back enough, all land ownership is based on "might makes right". There's always a genocide or war at some point in the process.
As it happens, the organized might (the government) has decided to maintain and enforce a regulated market in real estate, largely to everyone's benefit.
I think its rather cute that people take the moral high ground when it comes to the law. However such ought-to-be approaches to the law are irrelevant. Its the legal system not the justice system. He did his homework and he is within his rights to take advantage of all laws which apply. Americans don't get all up in arms when major corporations use loop wholes in the law to get over on us (when was the last time General Electric paid taxes? The 70's?).
Furthermore, the articles author pointed out that original owner was foreclosed on and promptly went mia and company which owned the mortgage went under. Its that either of those 2 parties or even a third party will assert their rights over the property, but until that occurs he is the legal owner as he legally filed as such. His neighbors can moan about it all they please, but they have no standing in the case whatsoever. Example: Someone defrauded Southwest Airlines: me having nothing to do with the case cannot bring fraud charges against whoever did; I have no standing in the case. I could have been standing right next to the guy that did it, as he did it, but I still have no standing in the case.
Thirdly, who's misfortune is he taking advantage of? The homeowners? No, they didn't pay their bills and left, the title went to the mortgage company. The Mortgage company? No, they went under. Whoever working there had long since lost their jobs and most likely found new employment before this guy applied to legally own the property. You want to make this guy out to be a bad guy because he doesn't use things the way "normal" people do and he got ahead for it. You are boring and lack any relevant imagination.
Few people have ever, in fact, read the law. Doing so often reveals amazing opportunities.
In this case, he looked into what the legal status of a home is when the mortgage paying owner abandons it, and the mortgage company ceases to exist. Answer: nobody owns it, and whoever files paperwork and actually starts living there gets it. Go figure.
To those saying "pay the $300,000!": to whom? The homeowner? he gave up ownership by moving out and abandoning the mortgage payments. The mortgage company actually owns the house until it's paid off, but if the company goes defunct then nobody owns it. There is nobody to pay!
What? No. That's not what happened. It's not "nobody owns it". When your mortgage company folds, the titles don't vanish into the ether. The titles have economic value, even in the (extraordinarily unlikely) case where that value is pennies on the original dollar. The assets of the mortgage company are sold.
Meanwhile, this is a terrible outcome for the neighborhood. Many people on HN are no doubt failing to find ways to shed tears for mortgage companies, but during the 10+ (note carefully that "plus" sign) years this guy's BS claim to the house takes to resolve itself, the house is out of the market; it can't be sold to anyone, at any price. It must instead be occupied by someone who has virtually no incentive to maintain or improve it.
I have washed a rented car, but then again I was 25, my dad gave me the skymiles, I was off in the foreign land of Kaua'i Hawaii and I didn't want to have to pay the cleaning fee, so i deemed the $4 potentially worth it.
Then again I am a bit older, arguably a bit wiser, and I haven't even considered cleaning a rental car since then.
I admittedly don't know anything about squatters -- but if you were going to squat in order to own a house, why would you treat it like a rental? You're trying to take ownership, you would treat it like it was yours.
There must be some aspect to this that you all know about but I'm missing.
"Meanwhile, this is a terrible outcome for the neighborhood."
Care to quantify that? No indication was made in the article that this guy is (for example) stacking junk cars in the front yard with a forklift, throwing all-night keggers, practicing his drum solos at 3:00am or setting up a meth lab in an unused bedroom. So how, exactly, is the neighborhood impacted? Hell, if he mows the yard that's a net gain...
Hopefully the real owners will figure out that they've got a squatter and will evict him.
But if it actually takes them more than ten years to figure out that someone else is living in their house, even when this has hit the national news, just how well can they be maintaining the property? You'd think they would notice the problem the first time they cut the grass.
LOL
A) It not being the the ,market holds the greatest benefit for everybody that matters, as everyone else's home prices rise as a result of one less home being sold.
B) There is a $500,000 home at the end of my block. A mortgage company (which is still in business) owns it. Still they don't maintain it. The pool is decaying into a bacteria ridden cess pool and everyone living here takes turns calling the mortgage company just to get them to mow what are usually 4' high grass out front. I imagine that this situation is prevalent elsewhere as well. I would love it if one of the neighbors could obtain the house for free and keep it up.
Speaking of, good job assuming that this guy "owning" it is somehow not keeping it up. Stereotypes will get you far. I can't way to read what you say when it turns out this guy is not only poor, but black or muslim so you can think even less of him.
A company goes defunct when their debt obligations grow bigger than what the company is worth. It is said that "liabilities are bigger than asserts" on the balance sheet:
So if the company can not pay its debt, the company is given to its debtors.
So THERE IS ALWAYS SOMEONE WHO OWNS the house, those that expended the money for the house to be built and own the debt. Odds are that the $300.000 is worth $100.000 in the open market today(if they want to recoup the investment) and they will loose money but it is not $0 or $16.
You mean "to its unsecured creditors," not to its debtors. And actually, during bankruptcy, the company's assets are conveyed to a trustee, not directly to the creditors; the trustee pays the creditors the proceeds of the sale of the assets. And you're mistaken about when bankruptcy happens; a company can have a negative book value (assets minus liabilities) indefinitely as long as none of its creditors goes unpaid and files a (successful) bankruptcy petition against it as a result. It is less common, but certainly not unheard of, for bankruptcy petitions to be filed against companies with positive book values. (The company might be badly mismanaged, or it might have a lot of its book value tied up in illiquid assets it can't find a buyer for.)
Given this litany of errors, you ought not be offering the rest of us "lessons from Econom[ics] 101" and posting sentences in all capital letters.
Now then, I believe that in Texas law, and in the common law in general, you cannot abandon title to land. However, that is not the case for many other assets; if a company abandons some chattel property, before or after entering bankruptcy, the bankruptcy trustee does not gain the right to sell that property.
Also, under civil law, which is in effect over much of the world (although not in Texas), title to land can indeed be abandoned.
yeah, judging from some of the comments on the article, its a race issue too... deal with it people, all afraid of their home values dropping.... also, HOA's just suck.
"HOA's suck" seems like an awfully frail case to make against the concept of property rights. I guess you can make it, but then I reserve the right to make fun of you when you get huffy about the eminent domain claims by states that want more commercial developments.
The TV station was actually helping his cause by running this story since one of the requirements is "open and notorious use of the property." The use of the property must be so visible and apparent that it gives notice to the legal owner that someone may assert claim. The posting of no trespassing signs that they talked about also improves his claim to the home.
Curious that the neighbors would rather have an unmaintained and abandoned property sit vacant and all of the potential associated problems with that rather than occupied by someone who presumably has an interest in keeping it up.
The neighbors would prefer that the market for houses clears, preferably at a favorable price but in any case at some price, so that the people residing in their neighborhood have a safe enough claim in the property to invest in it.
By locking up a property in pointless litigation, this person has taken one house in the neighborhood and made it illiquid. The squatter is extremely unlikely to prevail in the long run. The incentives are not set up for them to, say, plant trees or properly rebuild roofs. In fact, the incentives are the opposite: the rational squatter does the bare minimum required to claim continuous actual possession, while investing in some other property where maintenance and improvements promise an actual return on investment. The incentive structure for squatting almost begs for meth labs.
Adverse possession isn't the state's way of making sure houses are put to good use.
It's already illiquid - the current mortgaged owner has fled without putting the house on the market. If it were a case of just a few houses, as in the normal economy, I'd agree with you, but there are a whole shitload of houses in similar situations in the United States right now. This squatter is a better neighbor than a crack house. (Unless he decides to diversify.)
If the neighbors really want a say in it, they're free to pony up the money, track down the owner, and fight their own court battle to buy the place and then rent or sell to somebody they'd rather see there. It would probably be pretty cheap, actually, even with legal fees. But people always find it easier to say "You can't do that" than to say "We can do that."
But if the owner didn't pay, the mortgage company - and by extension, whoever got the rights to that debt - can foreclose on the house and sell it, no? I assume whatever company know owns that mortgage wants to recover their losses by selling it ASAP.
Maybe. If they still have the paperwork. And if they can sell it. I mean, I got my house for $8K, of which the bank got $4K, on an outstanding mortgage of something like $56K. And there are lots of vacant houses - the city actually demolished one last winter that was owned by Deutsche Bank because they hadn't even responded to letters from the city.
And that's for the mortgage holders that are still in business. This one isn't. Presumably someone holds their assets - but my guess is they're in even more frightful a mess.
You're assuming the assets are contained by one owner. Most likely though the asset is shared by a number of financial institutions and will be attempted to be split by selling the house, but none of the new asset owners are willing to finance the split of an asset that may not show returns (like if the house is sold for very little money, or not sold at all).
This is also assuming that the company went bankrupt by being worth less than their total loans. It may have been a case of the company simply loosing income and being unable to pay their financiers, even when the loans were worth less than the total value of the company. In such a case I don't know what happens to the "left overs", but I assume that they would belong to the shareholders.
"Curious that the neighbors would rather have an unmaintained and abandoned property sit vacant and all of the potential associated problems with that rather than occupied by someone who presumably has an interest in keeping it up."
It is not curious, it is obvious:
First they hate to have a neighbor that is not used to buy things like they do. Maybe they consider this action stealing somebody else property, as it is in fact.
People don't like thieves as neighbors that claim property of what "you don't use", I met a guy that stole bicycles and motorbikes as "nobody uses them"(when they did not use it for periods of 20 or 30 days, witch made it easier to rob).
In Spain and Romania, gypsies use to enter your property and steal everything they can if there is not somebody watching. E.g they steal the copper for the power grid from public railroads at night, in south crops they steal the copper from transformers that make electrovalves work. In Spain something like 20 people die every month stealing copper(electrocuted).
They have someone from a different socio economic status too.
If the home is free,then they want to have the opportunity to buy it at free market. They will have family members or friends that are in need to.
Those people think that if they respect the rules, everybody has to respect it too, because if they don't there is not reason they have to work, they can steal or kill for getting what they need too.(maybe even better).
I'm pretty happy with the similar "squatter's rights" laws. Abandoned property is generally a drag on a community (e.g. lower property values, danger to children, haven for criminals). If someone is willing to provide upkeep in such a precarious situation for years and the owner doesn't protest, I'd love to see them take possession.
That's not why we have squatter's rights laws. As a rational economic matter, squatters are not incentivized to provide good upkeep; in most states, the only thing that requires them to perform any upkeep are village building codes.
> the only thing that requires [incentivizes] them to perform any upkeep are village building codes.
Well, and the fact that if they don't scrape and repaint the peeling paint in the living room, they have to live in a living room with peeling paint.
I just came back from fixing my bike at a pizzería that's been squatted for about ten years now by a group of local anarchists and other socialists, who have converted it into a community center. Twice a week they have bike-fixing workshops, where they teach you to fix your bike and supply you with the tools and the parts you need. (And solicit donations.) The place is a lot better maintained than many buildings I've been in around here.
If your beliefs about incentives and rational economic matters fail to describe how people actually behave, you should revise your beliefs.
(Yes, squatting is risky, because you could lose everything you've worked for. It would be particularly amusing if you were really arguing that risking working for years and then losing everything is irrational on a web site devoted to high-tech startups.)
Just reading the article and the way his neighbors were complaining on him, I knew he had to be black. And then I watched the video and my hunch was confirmed.
I bet you are right ... those neighbors are working a little too hard for something that is only a minor irritant at worst, and at best could be a big benefit to the neighborhood. There simply isn't motive for all the hours and energy they're investing in fighting it. Unless there's some other motive involved. Probably more like classism than racism.
Lol, I guessed at that too, I thought classism but racism was a possible too.
Though, now that he is one of those black people it is safe to say that the neighbors are right and people like that should not be allowed to vote irregardless of laws written in the mid 1800's. I hope everyone makes it out Sunday night to the neighbor hood klan meeting so we can all praise white jesus, drink beer, and talk crap about all those seedy black people.
I'm guessing all these neighbors really wished they had gone into the house and squatted. Think about it, they were right there, right close to the big $300,000 bounty, and they just didn't know that it was there for the taking (legally).
Take the $330k house, sell it for $270k, and go pay cash for another house in a different neighborhood where you're more welcome. EDIT: and where the tax rate/appraised value is such that you can continue to afford it.
> If his plan does succeed and he does end up with the title, won't the taxes on the house be an enormous burden?
Enormous relative to what? The taxes may be less than low-end rent.
> I wonder what his plan is for that.
His plan better be to be paying the taxes now.
If no one is paying the taxes, the folks who want taxes are going to foreclose and boot the guy out. His "squatters rights" won't help him against that.
Texas property taxes are the third highest in the nation [1]. About 1.81% of the property value annually, or $5,430 in this case with a home value of $300,000. That's about $450/mo., which seems reasonable for low end rent in some parts of Texas. Property taxes vary by county, so Denton may have a higher or lower property tax than the average in Texas.
Correct. I have a friend that invests heavily in real estate tax liens and the foreclosure period is usually within 3 years and takes first position - ahead of any mortgage claims.
I'm laughing at the idiot neighbors. They have no motive to oppose his ownership other than jealousy or exclusivity (snobbishness). It is better for their neighborhood home values that the guy stay there so someone will cut the freaking grass and keep the place clean.
I just did some perusing of the records against this property and my bet is this guy is screwed now that the news media has picked it up. The mortgage company didn't "go out of business." According to deed records, the mortgage is owned by one or more of: Countrywide Home Loans, CWABS Asset-Backed Certificates[...], and ReconTrust Company of Texas. I can't tell what the second entity's full name might be (Denton County's deed image server is down and the name is longer than the data page shows), but the other two are now subsidiaries of Bank of America.
Why does this matter? Bank of America never actually foreclosed, so the original owner[1] is still the owner of record. The original owner can still contest the adverse possession in short order without dealing with the mortgage mess, assuming he cares to do so. In addition, BofA can foreclose and then evict the current occupant.
1 - Not naming the current owner here, but it is a public record.
I spent one Saturday helping a friend to pound in fenceposts for a minimal fence because of this Texas law.
If you ever have to do this, buy a lead pipe. Otherwise, the top of a fencepost is an annoying high target to hit with a sledgehammer! You simply put the lead pipe around the metal fencepost and you use it like a pile-driver against a couple of flanges close to the bottom.
If the neighbors are too stupid/lazy to contact the owner of record and do something about this, instead of complaining to the cops who have no authority in this case, then they deserve to have their desires frustrated.
The main thing that keeps him "legal" in a certain sense is that, due to particularities of Texas law, once he's filed that document, it's a civil dispute over ownership, not a criminal case, so police won't evict him for trespassing unless a court resolves the civil dispute first, and orders eviction. He's betting that nobody is going to get around to pursuing that case, even though they would probably win if they did (since he does not in fact own the property, either de jure or through sufficiently long de-facto possession).