Who Is Responsible For Damage Caused By Squatters

Question

So I have a rental property that I am paying a management company to maintain and rent out.  It is currently vacant but on the market to be rented out.  The property management company just informed me they had to pull the property off the market because they found a squatter had broken into the home and was living there.  I do not know what the extent of any damages caused by the squatter are yet, but, my question would be, who should be responsible for paying for any damages caused by this said squatter?  Is it to be expected that since I am hiring a property manager to look over my property, they should have kept a better watch on the place and should be responsible for fixing the damages, or is that just par for the course and I as the investor will end up having to pay for any damages done?  I have skimmed over the management agreement and it doesn't really say anything specific in regards to who is financially responsible in the case of a squatter breaking in.

Drew Sygit · Answer

@David Georgeson understand that you are frustrated, upset and basically looking for a scapegoat.

Unfortunately, no PMC that knows what they are doing would be responsible for this.

How do you realistically expect a PMC to keep someone from breaking into your property and illegally occupying it?

We've had owner clients tell us we should be driving by their vacant property several times each day - for free.

How is that realistic?

Hopefully, your PMC knows what to do!

Chris Seveney · Answer

@David Georgeson

Your PM is not responsible for this and I can pretty much guarantee you their agreement will state this.

Unfortunately you as the homeowner are at the end responsible and I would notify your insurance company to put them on notice to file a claim depending on the damage.

Nathan Gesner · Answer

Landlord has to suffer the loss. Maybe insurance will cover it.

The property manager can't possibly sit in a rental 24/7 to ensure nobody squats. If the landlord had evidence that the property manager hadn't checked on the home for two months, then maybe they would have a case.

Russell Brazil · Answer

The owner is responsible.

Gabe R. Gonzalez · Answer

Squatters are on the rise. They probably would have gotten in the vacant unit whether or not you had the PM. Locks are there to keep honest people out.

If the PM is competent they’ll have the necessary resources to get these folks out of your unit asap. Get the squatters out of the unit before you start reaming the PM, you want them and their lawyers on your side.

Kevin Sobilo · Answer

@David Georgeson, the only way I would think you could claim a PM was responsible is if they had done something clearly negligent such as:

1. Not securing the property. Something like leaving it unlocked or giving out keys to random people.

2. Not checking the property periodically such that a squatter was living there long enough to require court action to eject them. In my state that would be 30 days, I believe. So, if a PM allowed a squatter to live in a unit 30 days without noticing or taking action, that would be negligent in my opinion.

Otherwise, I don't think you could ever hold them responsible. You are INVESTING here, that means YOU are the one taking the risks of loss because YOU are the one with something to gain by the investment performing. Investing by nature implies there is a risk of loss like this.

Adam Bartomeo · Answer

Its like saying, the house was struck by lightning, is the PM responsible? No, they are not.

As you can see from the responses here, the PM is in no way responsible. This is part of owning real estate and the risks the owner takes.

Scott Mac · Answer

You own it- you will have to stroke the check for it.

Your property management company is not a security service- unless it states they are in your agreement with them.

There are security services you could hire- they are expensive.

There are camera services you can have set up that may be useful to you to spot these things but they won't prevent the damage from happening.

Good Luck!

Marylyn Patankar · Answer

It’s definitely frustrating to deal with a situation like this. In certain neighborhoods, squatters in vacancies can be inevitable, regardless of who is managing the property. Your property management company should be doing their due diligence to check on vacant units regularly, especially after a certain period, and keeping you informed during the vacancy.

Unfortunately, when it comes to damages caused by a squatter, those typically fall on the property owner, unless your management agreement specifies otherwise (it likely does not). However, your property manager should be able to guide you on legal options and solutions to secure the property and possibly help with claims for damages. It’s a good idea to discuss this with them to see what steps can be taken moving forward. The first step is always reporting to your local police department and getting a document that states that any unauthorized visitors will be trespassed immediately-- but in my experience, it takes more than just this to get the squatters out. Especially if they have informed their "friends" of the unit vacancy.

Brian Teeter · Answer

We have had really good luck with "dummy cameras" and signs.  Not 100% effective but helps

Who Is Responsible For Damage Caused By Squatters

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