Squatters Right: Can You Squat In Your Foreclosed Home?

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The foreclosure mess has raised some questions about squatters right. In California, citizens are moving into abandoned houses. They mow the lawn, do minor repairs and enjoy the house with their families. The neighbors accept them and they help re-vitalize the area.

The law in California is referred to as "adverse possession". California requires a squatter to fence the property, and pay the property taxes continuously for five years.

Think back to the Homestead Act. If a piece of land is vacant and not being used by the owner, and you stay on the land, and improve the land, it's yours. You have to stay and improve the land for 5 years. This was not a perfect system and there were numerous issues. For example, the owner decides to show up after 4 years and reclaims the land. Can you imagine an owner returning after 4 years and discovering that he has 20 acres of corn ready to harvest? Incredible!

The same situation can happen with the squatters in a foreclosure property. The owner can reclaim the property after it has been fixed, new windows, new doors, a new kitchen, and to top it off, all the property taxes are paid and current.

This is unchartered waters for many experts including lawyers. Who owns the house? With the scrutiny that MERS has caused, no one know for sure. In many courts MERS could not legally foreclose, so how can MERS evict? In some cases a trust tied to a fund of mortgage backed securities is the rightful owner of the property. When the house sits empty for 6 months or longer and a family moves in, who can legally evict the family? The trust might have 300 or more individual investors. Getting someone to initiated the legal eviction can be difficult.

There are things that you can do if you intend on squatting in a foreclosure property.
1. Give notice to the owners.
2. Give notice to the mortgagees.
3. Fix and maintain the property.
4. Pay the property taxes.
Each state has different laws in handling "adverse possession". Therefore check your state offices.


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