Being part of a full-service, crisis management law firm requires some duties above and beyond the call of arguing in court on a client’s behalf or drafting legal documents.  This is particularly true in dealing with certain real estate issues. 

As we all know, mortgage foreclosures are at historic levels.  Mortgage fraud cases can result in many unoccupied, unfinished properties that leave clients not only with foreclosures, but a host of property management concerns.

Case in point:  one of our clients recently received a call from the police about a property in her name that is currently in foreclosure proceedings.  The property is damaged, unoccupied, and not our client’s residence – our client is the owner of this property as the result of a multi-million dollar mortgage fraud to which she was among the victims.  The police informed our client that the garage door had been left open, and our client called us. 

Our full-service mission includes serving as property managers for our client victims of mortgage fraud, so we had to investigate.  I arrived at the property with a trusted companion, a cell phone, and a rather large hammer (among other tools, but the hammer looked the most impressive).

Upon our arrival, we found the garage door closed, but evidence of activity on the premises. 

We had, of course, previously secured the property.  Doors had been locked and deadbolted; the garage door had been locked, and the entry door to the garage had been boarded and padlocked; the front and back gates had been chained shut with padlocks.  But how secure is secure?  If someone really wants to get in, iron gates can be climbed, nails can be removed, and locks picked or bashed.

Property inspection always seems a bit risky, so we banged on the entry door to the garage - on which our padlock security had been curiously replaced with a thick strand of wire -  with my large hammer and loudly announced our presence – just a bit deeper in tone than usual, of course.  To our surprise, the wire holding the latch began to move.  A moment later, the door opened and a somewhat troubled-looking young man was greeted by two somewhat sizable slightly less-young men, one wielding a rather large hammer.

The homeless squatter immediately apologized, said he would tell "the others” not to return, and quickly left through the just-opened rear gate that had failed to keep him out when chained and padlocked. 

We weren’t going to chase him down, of course.  We understand the plight of someone without a home, looking for a place to stay out of the elements.  The foreclosure crisis itself may contribute to the issue.  Former homeowners in financial trouble lose their homes to foreclosure and become, themselves, homeless.

As attorneys, however, protecting our clients is of paramount importance, and allowing squatters access to an otherwise unoccupied property is far too risky.  Having squatters in an empty property can cause myriad problems, some of which are covered in a recent BusinessWeek article.  Locally, many of us recall the news of the March 10, 2007, fire caused by a mentally unstable homeless woman that killed four people in Chicago’s Wrigleyville neighborhood. 

Fire is of the utmost concern and has many causes.  Candles for light, fires for heat, drug use or discarded smoking materials, faulty space heaters, or even unfinished or poorly completed electrical work are only some of the potential fire hazards in an unoccupied property.  Rats are another major concern, as food, drinks, litter and other refuse become major attractions to rats and other pests.

Squatters are one particular problem, but unoccupied properties in foreclosure also can attract crime such as gang activity, drug dealing, and prostitution.  Teenagers can see these properties as a party place, while younger children can see them as a potential playground.  Properties acquired from unscrupulous developers - those often involved in mortgage fraud schemes - can be unfinished and even structurally dangerous.  In addition, any of these issues can lead to financial liability or even demolition if the city or town government determines the property to be a hazard or nuisance.

So how do you protect yourself or your client from issues with an unoccupied foreclosure property?  Here are some tips:

1. Secure the premises:  be sure that all doors and windows are well-locked, and even better, have the property boarded up.  This is particularly true for unfinished construction where there may not be complete window and door installation.
2. Inspect the premises regularly:  a continuous presence deters squatters and creates fear of being caught.  Just showing up at the place with some frequency makes a big difference.
3. Post no-trespassing signs with contact information:  even if police or neighbors become aware of problems with the premises, they may not know whom to call about the problems.  Ensure that it is easy for them to get that contact information by posting it on the doors.  Of course, these signs may be removed, but with regular inspections you can see that and replace them.
4. Contact the local police department:  let the police know that the building is unoccupied and a potential target for problems, and encourage them to pay particular attention to the premises while on patrol.  The police will generally appreciate having a cooperative owner or owner’s agent with whom they can work and communicate.
5. Contact the neighbors:  the neighbors are both in the best position to learn about potential problems and those most affected by them; get the neighbors your contact information and be sure that they know you are ready and willing to fix problems arising from the premises being unoccupied.
6. Contact the mortgage lender:  banks and other lenders are keen to protect their investment in the property.  Inform them that the property is unoccupied, especially when in foreclosure, and let them know that you are worried about security of the premises.  The lender may well take some of the steps above to ensure the premises are secured.

Remember, if you are facing foreclosure, and particularly if you are the victim of consumer fraud such as real estate fraud or mortgage fraud, be sure that your attorneys are ready to tackle the problem, whatever it takes within the scope of the law.  Your attorneys should be ready to take the fight to the perpetrators of mortgage fraud, defend against mortgage foreclosures, and service any related issues and concerns, including what to do with any unoccupied and abandoned properties.  To learn more about our full-service approach, contact our firm for a free consultation.