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Posted over 4 years ago

Abandoned Real Estate Legalities, there are Two Sides to Every Story

  Naomi asks a question.    Can this be legal?

I've been taking over abandoned real estate without the owner's express permission.  A local real estate Broker and Agent, BP Member, and Olympia WA MeetUp sponsor was wondering if it was lawful for me to take over properties that the owner had abandoned?  She did what any smart realtor would do. She asked a professional. Well done Naomi.  I like Naomi and so do the people she works with. 

Normal 1568600505 Naomi Pinger  Referrals

                    ________________________________________

So Naomi asked a well-respected attorney, Annie T. Fitzsimmons, who specializes in Real Estate law, to provide a professional opinion about my conduct.  That was several years ago.  I found out about Attorney Fitzsimmons's response much later.   A copy of her response is provided below.  However, it should be beneficial to hear both sides of the matter.   In fairness to Attorney Fitzsimmons, taking over Abandoned Real Estate using the laws of Adverse Possession is an arcane area of the law -understood by few.  There is no reason a real estate attorney who does not specialize in Adverse Possession would be familiar with this seldom-used law. 

                     __________________________________________

A Respected Attorney Gave Her Answer


Ms. Fitzsimmons is an Attorney, engaged by Realtors, to advise Real Estate agents that found my conduct in regard to abandoned real estate constituted trespass, theft, and fraud.  Her opinion is provided below.

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Normal 1568560790 Annie T Fitzsimmons  Attorney

                    ____________________________________________
                     

Your Washington Realtor's Legal Hotline Question

Fitzsimmons, Annie                                           Jul 12, 2016, 4:04 PM

The Washington REALTORS® is offering this service to further the education and to reduce the risk of liability of its members.

We hope that the attached response satisfies your inquiry. Our response is based only on the facts recited in your question. In any particular transaction, a complete review and understanding of the facts is necessary and it may be advisable that you review this matter in greater depth with your legal counsel. The information contained in this letter is general in nature and is intended for your educational use only. Annette T. Fitzsimmons, P.S. is not acting as your attorney, but is merely providing you with a source of legal information.

Your Question was:

I came across an interesting article about an investor who is finding what he calls "abandoned houses" and rents them out. (of course it is without the owner's permission.) He claims it is legal to do this as long as he pays the taxes for the owner[1] and if the owner shows up he pays him the rent minus the taxes and the management fee[2]. If the owner does not show up he can file for quiet title after the proper amount of time using adverse possession. He also said he does not break into the home so it is not an illegal entry (although he did not state exactly how he was gaining entry)[3] and he is doing the owner a service by keeping the property out of tax foreclosure and from deteriorating. Is this adverse possession since he is not living in the home himself?[4] If it is adverse possession how long before he could file for title if the owner does not appear? Even though he claims not to be breaking into the homes, is it still illegal entry? Is this endangering the lives of the renters if the homeowner returns to find "squatters" living in his home and decides to take matters into his own hands when they refuse to leave? Can any of this be legal or even semi legal?

Our answer is:

No. The "investor's" actions are not legal. He is entering property, without the permission of the owner. Said differently, he is trespassing. Then, he is entering (into) a contract giving the right of quiet use and enjoyment to a tenant, when he has no such right to give. He does not possess the right of quiet use and enjoyment so he cannot give it to a tenant by contract
He has no right to profit from his unauthorized use of another's property (trespass). He is stealing. He is selling the right of possession, another right he does not hold, to a tenant. The only person with authority to sell the right of possession is the owner of the property, Thus, he is stealing from the property owner.

It is difficult to believe that a court would award unlawful actions with quiet title based on an adverse possession theory. If it did, the trespasser would have to prove the elements of adverse possession for a period of ten years,

If this investor were turned over to the attorney general or a local prosecutor in an actual situation where investor has committed the actions described, it is the Hotline lawyer's opinion that the investor would have to be prosecuted on the basis of consumer protection, if nothing else. Tenant is investing in a rental property based on a fraudulent lease. Tenant's safety is at risk and so is tenant's financial investment in occupying the property.


If you have any additional questions, please email us at

Very Truly Yours,
Annie T. Fitzsimmons



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                     Its criminal conduct.  Clear Enough?

So there you have it.  The opinion of a real estate Attorney, vs. the conduct of a hobby possessor of abandoned real estate.  Attorney Fitzsimmons is a legal professional.  She found my real estate hobby to be criminal.  Sadly, her legal opinion was wrong.  It is clearly erroneous.

The law controlling taking over abandoned real estate and adverse possession were not matters that Ms. Fitzsimmons had familiarity with.  Without researching the novel issues, she lacked the necessary knowledge and gave terrible advise.  Did you notice that her opinion failed to cite a single law or court ruling?    

Did you form an opinion of your own?  Is taking over property abandoned by its owner a crime?  Maybe not.  There are two sides to every story.  I'd like to hear your thoughts.  My response to Attorney Fitzsimmons can found in the next post on this blog "There is no Trespass at Abandoned Property"  which can be read here; 
https://www.biggerpockets.com/member-blogs/12388/86745-there-s-no-trespass-at-abandoned-property

Best Wishes to all, Davido, 

"Can this be Legal?  The Blog of Abandoned Real Estate and Adverse Possession"

https://www.biggerpockets.com/member-blogs/12388-abandoned-property-adventure-on-wildside


                    _________________________________________________

[1] Davido's Footnotes: Paying property taxes generally has no effect on the legality of possessing or renting out an abandoned property. Paying property taxes, as used by Naomi in this letter, is likely a reference to an element of Adverse Possession under Washington State’s 7 year color of title statute https://app.leg.wa.gov/RCW/default.aspx?cite=7.28.070. WA State has another, longer statute, where paying property taxes is not a necessary element of adverse possession. The ten-year Statute of Limitations is for Recovery of Real Property where the possessor has no prior claim of title. https://app.leg.wa.gov/RCW/default.aspx?cite=4.16.020 Under either statute, ensuring that someone pays the property tax is a matter of practical concern for anyone wanting to maintain possession of real property because if the property taxes go unpaid for more than 3 years, then the County will foreclose for nonpayment. https://app.leg.wa.gov/RCW/default.aspx?cite=84.64.050

[2] I would no longer seek a property management fee. The licensing laws for property management were changed in 2008 and again in 2015. A real estate broker’s license is now required to claim a property management fee. https://app.leg.wa.gov/RCW/default.aspx?cite=18.85.011 (17) [Defining property management as a broker activity]. Further, a lienholder who pays the lienee’s taxes may receive a judgment directing recovery of the property taxes paid plus the amount of the lien, and Mortgage lien holders have the right to enter a property to maintain it as necessary to prevent waste. https://app.leg.wa.gov/RCW/default.aspx?cite=62A.9A-207  Any lienholder has the right to pay the property taxes in order to protect their lien from property tax foreclosure. Most abandoned properties have liens which typically can be purchased for a fraction of the amount due. 

[3] People who walk away from their real estate seldom take steps to keep it secure. In fact, the very act of securing the property is strong evidence that the property has not been abandoned. I do not enter secured properties.

[4] An adverse possessor who sublets his possession to a tenant, remains in control of the property for the purposes of fulfilling the elements required to establish adverse possession. “In order to establish a claim of adverse possession, the possession must be: (1) exclusive, (2) actual and uninterrupted, (3) open and notorious and (4) hostile …”.Chaplin v. Sanders, 100 Wn.2d 853, 858 (1984). However, the “exclusive” possession element requires that the property be possessed only to the exclusion of the actual owner. The exclusive element does not eliminate co-tenants who possess property together or sub-tenants of an adverse possessor, nor does the exclusive element prohibit combining a period of possession by a descendant in interest adverse possessor with the possession of a previous adverse possessor (known as ‘tacking’). The subordinate relationship of a tenant to his landlord fulfills the element of exclusive possession for the landlord. A tenant can never claim adverse possession against his or her landlord because the tenancy agreement grants the tenant permissive use of the property. When permission is granted, the tenant’s possession is no longer ‘hostile’ to the landlord. Hostile possession is a required element.
The “actual and uninterrupted” possession element, is also satisfied by the adverse possessor’s sub rental of a property. It is the landlord whom the courts credit as having maintained actual and uninterrupted possession of the property, not the person who rent is from the landlord.
See https://lawshelf.com/courseware/entry/acquisition-by-adverse-possession for an explanation of the elements required to claim Adverse Possession.


Comments (4)

  1. Caution:  You might find that that a court will find that if you "sublet" these properties. your claim will fail.  The intent of most squatter laws is that that squatter himself is in open and continual occupation of the property, and cannot delegate this requirement to others.


  2. A key principle is that the rentals described in this blog, must occur only where the owner’s prior abandonment can be proven by clear, cogent and convincing evidence. In each case the owner of record has made no use of the property for several years, paid no taxes, has done no maintenance, has failed even to maintain contact information and the owner (or his/her heirs) can not be located despite diligent efforts.   In other words, a reasonable person would conclude the property has been abandoned.


  3. Hi Mr. Davido,

    While I haven't explored the links you provided, it seems that you have certainly done your homework and the law may be quite possibly on your side. 

    That being said, supposing I had just found out that a relative had passed years prior and left me a house, then I came looking and found someone in the process of claiming it this way (just one of a bunch of hypotheticals I can think of). I'm a reasonable person, and this would make my blood boil, and I would be very aggressive in pursuing the right outcome for myself. 

    I can only think what an angry, crazy person might do - to the tenants, to you...

    Each to his own, but to me I feel like it's nothing but theft, and I don't think I'd sleep too well at night. 

    In defense of that lawyer (I feel weird defending one), she only had one side of the story so she's speculating the rest of it, and therefore why would she bother pulling links to statutes and case law?


    1. @Michael King,  Thank you for a thoughtful response.   In regard to your hypothetical question  "supposing I had just found out that a relative had passed years prior and left me a house, then I came looking and found someone in the process of claiming it this way. ... I'm a reasonable person, and this would make my blood boil, and I would be very aggressive in pursuing the right outcome for myself." 

      This is possible.  In fact, a similar fact occurred once when I thought a property owner was dead, but he wasn't and showed up after I paid up his back taxes and started logging his property. See this post mid page 2 

      https://www.biggerpockets.com/forums/70/topics/214551-seeking-to-use-abandoned-tax-delinquent-properties-for-privacy-and-tax-avoidance?page=2#p2550500

      If your relative had passed away years prior,  having me find and utilize the home is one of the best possible outcomes for you.  Without me, your deceased relative's home is likely to have been completely neglected, wasted, stolen from, burnt or otherwise destroyed by transients (who are known to build fires inside unheated homes) and ultimately your relative's property would have been sold for delinquent property taxes.  It could be that you'd be mad or confused initially, but you would soon discover the following;  

      1.  You still have your home.  If it were not for me paying the past due property taxes the county would have sold it in a property tax foreclosure sale.  In my state, (WA) real estate is sold in a Tax Deed auction after property tax become 3 years delinquent.  I only look for properties that are at least 2 1/2 years delinquent, so your relative's property would be close to foreclosure before I even take notice of it.   Once it sold, you've lost it.  If you still have a property, its because I have saved the property from tax foreclosure -and now its yours.

      2.  My actions have preserved, protected and improved your home, as opposed to leaving it to more years of decay, theft, and destruction by transients which are all the typical results of leaving a building vacant, unmaintained and neglected for years.

      3.  You are now entitled to XX years of rent that I've collected on property that you own.  The law is clear in WA, that you are entitled to the rents -if you are the owner.  I won't dispute that.  So if your agree to let my tenant finish out his last 30 days, here is your XX years of accumulated rent.   Is your blood still boiling?

      If you see any way that I've done you wrong, then please let me know.  From my perspective, I saw to it that your property was protected, maintained and even improved.  I collected years of rent that has been saved and is now yours, and best of all I saved your home from being sold in a property tax foreclosure.  Frankly, when you understand what's happened, I think you'll be at least secretly very thankful.

      In regard to Attorney Fitzsimmons reply to Naomi Pinger's letter, you are correct that Attorney Fitzsimmons had only a poorly related statement of my activities.  I too would not expect much more from the Attorney.    

      Thanks again for your comments.