Use a locksmith or do it yourself, and what is the legal definition of vacant?

Foreclosure Investing
1

I’m getting ready to start going to auctions and bidding. As part of the process, I need to be ready if I actually win. I’ve been scoping are for available houses on the MLS for comps so I think I’m calibrated. Got some related questions in case I win:

  1. When changing locks do you use a locksmith, or just drill the locks yourself? Drilling a lock does not appear hard, but would hiring a locksmith help you if you think the place is vacant but its not? (i.e. he starts drilling the lock then someone complains).

  2. How do you know for sure if the place is vacant? Is there some legal definition of “vacant” or can there be gray areas? So you can change the locks if the place is “vacant”, but what if there’s some stuff there that may or may not indicate someone lives there? What if the place appears fully furnished but the previous owner go hit by a bus a week ago? What if the place is empty, except for a sleeping bag that is actually being slept in every night? Is vacancy determined by the amount of stuff there or the amount of time that is spent at the place? What if someone is living there every other day? Is there some objective threshold?

  3. What is your liability if you think the place is vacant, you change the locks, and it is not for some reason? Do you owe the tenant a new lock plus days rent for each day denied access to the property?

Thanks!

2

It’s usually clean whether the property is vacant or still occupied … but I could see how there might be some potential for dispute … it’s a good idea to bring a digital camera along when you secure a property. Take pics showing the date/time. If the property clearly appears vacant, then you have a much better case should a prior owner attempt to claim they had not yet left. Always set aside, or store if necessary, any leftover items (unless it’s literally trash < take photos). I would not change the locks if it was evident the property was still occupied. I once had a prior owner call me to complain that I had imprisoned his car in the garage. Oops … the funny part was that it was not me who bought his property … another steps buyer picked up the property and had it re-keyed (garage too) within 30 minutes of acquisition at the steps. Yes that investor has a team that carries locks and tools and they move quickly.

3

I have assembled a lock tool box. I have a Dewalt cordless drill with titanium bits. Assorted screw drivers, pry bars, pliers, etc. Ironically, we almost always find a door or window that is not completely locked and we find our way in. I am always amazed that we show up at what appears to be a vacant house and start breaking in and meet the neighbors. On a couple of occasions, they helped.

If someone is really living there, it is pretty obvious. However, it does not take much to constitute occupancy. We use a real character of an eviction attorney. His definition is a little strange, but he uses an analogy. He tells me, if you rented a room at the Fairmont, but decided to sleep in the park across the street with the homeless, you would still have a tenancy at the hotel. It really only takes the word of the ?tenant? to establish tenancy. We have purchased homes with no electricity, water, etc, with 90% of the furniture gone, we take possession, change the locks, and then a few days to a week later, someone shows up looking for their stuff. I had one guy show up and tell me he was living there wanted his stuff and wanted cash for keys. I asked him if the stuff he wanted was in the marijuana grow room. We gave him his stuff and he was never heard from again.

What happens when you buy a house at the auction is you essentially become the landlord and whoever is there or has stuff there, are tenants. The laws related to this relationship generally apply. For example, as the landlord, you own the locks, so you have every right to change the locks. However, you are supposed to give the tenant notice and do this only during business hours, etc. With the exception of houses that really appear to be occupied, we change locks within hours of the auction, This is to secure the property and protect our interests. In the event someone claims to be a tenant and that you locked them out, if you think that is true, all you have to do is give them a key. Yes, you could be liable for damages to the tenant, but if you give them a key as soon as you have notice, then there is not much risk. I think securing the property far outweighs the risks of locking out a tenant. I can deal with the lock out.

I purchased a house that was a reverse mortgage and the woman had died more than a year before the auction, there was a lot of furniture, a truck, etc, but it was clear no one was living there. The neighbors confirmed that no one was living there. None the less, this was a legal tenancy. So, we found a number for the woman?s son, called him, met with him, gave him a key and negotiated a schedule for him to get the stuff out. This all worked out for everyone, a week later he had moved everything out and we had legal possession without cash for keys or any legal action.

Yet on another house, we had to evict the owners and their ?tenants? required 5 months, with the sheriff helping them leave.

Occupancy is a big deal. Be sure to find out all that you can about who lives in the subject house before you bid and then bid accordingly. Look around the forum and you will see that cash for keys is the best way to get the occupants to leave, but you will also see that it does not always work and the occupants all know about CFK and some will try to extort whatever they can. I had one guy come right out and tell me that if I did not give him what he demanded, he would be removing the kitchen, etc.

4

Wow, good info. So it sounds like as far as vacancy is concerned you just sort of use your common sense, but prepare to be wrong. You mention the tenant contacting you. Do you leave a sign taped to a window indictating that the house has been bought at auction and leave a contact #? I was thinking about doing that in case there is anything left behind, or a dispute. And after reading all the comments on this forum I’ve been prepared to do CFK, but my initial target area is going to be Central Valley, and I’ve been hearing from the agents there that CFK is not common. Does anyone have experience with CFK in the Central Valley? If it’s not common perhaps they’ll be happy with a small amount of cash.

5

If there is stuff, and/or we have any doubt about the property being "vacant’ we post a “Notice” stating that the property was recently sold and give contact information.

I know nothing about what is going on in the central valley, but everyone has the internet and the banks all offer CFK, so I would assume that the people have knowledge of the CFK practices of the banks.

Although you become a “landlord” when you buy the property, we try to work out an arrangement with the occupants. I am empathetic and listen to their story. I make it very clear that we are not the bank and had nothing to do with the foreclosure, we are just the buyers. We truly try to find out what they need and how we can help them move. We make it clear that they do have to move. Time is money, a firm but flexible and understanding approach helps. For the sake of the rest of us, don’t pay more than is necessary. We will give them enough for a deposit on their new residence. Remember, bona fide tenants get 90 days, so you have a big incentive to get them out sooner than later and without going through an eviction.

6

Bought at a trustee sale on Monday. The owner was notified same day. Next day previous owner rents my new property to someone for 2 weeks. Where do I stand legally.

7

I purchased a property at a trustee sale. It is a vacation rental, not a full time residence. Legally, how do I need to notify the owner to remove personal property, and what do I do with whatever is left behind.