Real Estate Investor · State College , PA · Member since 2009 · 594 posts · 173 votes
I looked at a house today that is coming up for sheriff sale. The neighbors came out and started talking to me about the house. They had been told by someone hired by the bank to mow the lawn to tell the buyer he is not to return to the property.
I don't understand this. When aren't owners allowed to go back to their house, and when do banks start moving lawns that don't belong to them. Can someone clarify? In addition there is no ordinance to maintain lawn in this small town.
I looked at a house today that is coming up for sheriff sale. The neighbors came out and started talking to me about the house. They had been told by someone hired by the bank to mow the lawn to tell the buyer he is not to return to the property.
I don't understand this. When aren't owners allowed to go back to their house, and when do banks start moving lawns that don't belong to them. Can someone clarify? In addition there is no ordinance to maintain lawn in this small town.
The bank did Not give these instructions, they'd rather it be occupied. Either the owner/neighbor are just making stuff up (maybe for the owner to save face with his neighbors?) or the grass cutting guy doesn't want to lose the account if the owner comes back. Banks don't have the legal right to evict anyone, prior to them owning thru the auction sale. Banks sometimes, but not nearly often enough, mow grass as part of their property preservation efforts on a vacant house.
But the house has not been foreclosed yet. The only thing I can think of is the bank gave him some money to promise to stay away. Don't know.
One thing is for sure, they did not give him money to cleanup. One of the craziest houses I have seen. Filled with junk. Probably 120 yards of it.
Hahahahaha! You said, "...bank...gave...some money" hahahhahahaa. No. Unless they've obtained an order of eviction, this is wishful thinking on their part. Parties frequently assert authority they do not have.
Yeah I know I was shooting in the dark on that comment. I guess there must be some allowance provided to the bank to padlock the house, without the buyers consent if the property has been abandoned. Thoughts?
Just to be clear...the bank has No right whatsoever to prevent an owner from accessing/using their property. The bank would Never attempt such a thing, as that would put them in some serious hot water, and for no reason/benefit. However, when a loan is in deafault they do send inspectors to drive by and determine if the property is vacant. If it is vacant, they have the right in the mortgage documents to "secure and preserve the property", which typically includes installing a new lock,securing/boarding/locking Windows, and performing monthly inspections. The comments from the neighbor is just irrelevant. As an agent for the owner with authorization, I've never had the bank not give me the lock box combination, or mail a key, once they've secured a property.
There may be any number of reasons why a person is no longer allowed in the house legally; such as a temporary restraining order when the person is likely to steal or break something pending foreclosure. If I were a savvy in-house bank attorney (relish the thought) I would probably ask for something like that.
There may be any number of reasons why a person is no longer allowed in the house legally; such as a temporary restraining order when the person is likely to steal or break something pending foreclosure. If I were a savvy in-house bank attorney (relish the thought) I would probably ask for something like that.
Is there case law supporting a lender getting a restraining order barring the rightful owner from their property prior to foreclosure ? My understanding is that courts have upheld the owners rights to even remove items such as appliances, fixtures, A/C units etc. prior to foreclosure. From a Texas perspective, I cannot imagine a court granting such an order
There may be any number of reasons why a person is no longer allowed in the house legally; such as a temporary restraining order when the person is likely to steal or break something pending foreclosure. If I were a savvy in-house bank attorney (relish the thought) I would probably ask for something like that.
Is there case law supporting a lender getting a restraining order barring the rightful owner from their property prior to foreclosure ? My understanding is that courts have upheld the owners rights to even remove items such as appliances, fixtures, A/C units etc. prior to foreclosure. From a Texas perspective, I cannot imagine a court granting such an order
Depends entirely on the jurisdiction honestly. Some states, like California, view certain objects as fixtures that are conveyed with the property. I can only speak to Virginia law personally. In our state, I doubt a restraining order would prevent the carrying away of basic personalty, but if it is a really heinous person that might do things like strip copper or something and has a bad criminal history, I could see a restraining order being issued.
I'd be happy to dig up some case law for my particular state, but I'd warn that it isn't applicable in yours. I am wholly unfamiliar with Texas law.
As stated earlier, I am surprised the bank had someone maintain the lawn. I do not believe there is an ordinance to maintain the grass to a certain height.
Do the inspectors visiting the property also take it upon themselves to winterize the house? That of course is generally a big joke. Usually whom ever does such work had done so too late. I know banks post sale have guys go in and do said work, but I have also seen many preforeclosures winterized as well.
@Account Closed Not so much here, but up north yeah. It was funny, looking at one headed for auction the other day, I found an "unlocked door" and there was the plastic band across the toilet lid imprinted with "winterized".
I have been in homes where toilets are busted, pipes separated and just hammered, and you see that note on the door saying the house has been winterized. Its almost tantamount to deception.
@Wayne Brooks has already mentioned, the people hired to do property preservation have a number of things that they do - board up, winterize, re-key, lawn and yard care, even tarping a roof that is leaking like a sieve. Why do they do these things? Sometimes it is the policy of the lender or mortgage servicer that these be done. Sometimes the lender has a relationship with the broker who will list the property, and that broker handles inspections and sees to it that matters are addressed appropriately. Why mow the grass? To abide by municipal ordinances, to keep the neighbors happy (so they don't claim to code officials), maybe to give the appearance that the property isn't vacant (although anybody with a clue could see the posted signs that indicate otherwise).
I don't mind when the property preservation team continues to mow the grass after I have bought at the auction :) Saves me from having to pay to get that done.
I bought my current residence, in State College at foreclosure sale. The sale had been postponed a couple of times. The house is next to my sister-in-laws home in a small development. We wondered why the lawn was always at a reasonable height during the course of that summer. We then learned the township had hired a lawn company to maintain it. The @#$%^ must have mowed the house every week. It was a $1800 lien on the property. After taking possession, my bank would not mortgage the property until the balance was paid off. So while the lawn being maintained can be a good thing, it may not depending on who might end up paying for said services.
@Account Closed - your most recent post is exactly the reason that the lender hires crews to mow grass. Some municipalities will perform this and then that is a municipal services bill or lien that does not get extinguished unless it gets paid.
A lender has a right to preserve collateral property, okay, that's been explained.
Default does not grant legal title in any lien state and doesn't grant possession in any title state, foreclosure is necessary. I've never heard of restraining any owner from their home prior to foreclosure, default doesn't extinguish ownership rights of anyone who has legal title. Could there be a situation? Yes, if the borrower had made threats to the lender (which would have been recorded as all institutional lender's phones are tapped) then the lender would have cause to ask for a restraining order. Would they get it, I'd say doubtful, ownership rights become a constitutional matter, I'm not a constitutional lawyer but I think there would be issues. Around here, it wouldn't happen, if the owner trashed the place, after making threats or even not, if it can be proven they were responsible, they'd be going to jail. :)
The owner can take a bulldozer to their property if they want, as long as they are on title. The only time any authority could step in is if its a health and safety issue. I've had neighbors call me with video of the owner taking a sledgehammer to their property prior to my foreclosure but unless/until that owner's actions pose harm to the neighbors or others, no one is going to or can do anything about it. I've tried, I've called, I've had to sit on my hands watching someone destroy the property before it goes to sale but, historically, there was nothing I could do at least here in California.
There is usually language in the security agreement where an owner agrees not to damage the property but, they also agreed to make payments so, so much for the teeth in that. The remedy for defaulting the terms of the security agreement are usually foreclosure.
Now, if AFTER the foreclosure, the previous owner vandalizes or otherwise damages the property, there are consequences to the previous owner as they are no longer the titled owners of the property. Do we go after them? No. Not usually.
I did have one case a few years ago where we called the police after the owner stated at her local coffee shop that she poisoned her well. The police came, got someone to test the well and arrested her. No word on what they ever did to her though.
It should probably be said the bank might have a right to secure an "abandoned" house. If they do that they leave a sign on the property with a number for the owner to call to gain access.
This is basically done if the door is wide open and the owner has moved out prior to the auction.
I agree with what Bill said. In a residential setting I am not aware of any thing inhibiting the rights to access the property of an owner. In a commercial setting you can see Mortgagee's take possession under an idea of "Mortgagee In Possession". This typically involves commercial type property and that clause would need to be present in the security instrument. Not typical in consumer transactions. It sort of functions like having a Receiver in place but it is the Mortgagee not a third party.
Anyway, as stated Mortgagee can preserve the property and that includes mowing the lawn. Yes, property preservation (as it is referred to) can run away from a Mortgagee rather quickly if the company or person tries to do work every week. I have had to put the kabash on folks trying to mow some of our lawns every week. Like anything it has to be managed or it runs the risk of being taken advantage of.
As far as the message to the owner, I would put some of it on the neighbors exaggerating and perhaps even the property preservation company. I have noticed lately that some of those companies step pretty far out of bounds with their interactions with borrowers and the public. I have personally had a couple situations over the last year where the PPC was citing rules that they had no business attempting put forth.
I suppose the moral of the story is the idea is not enforceable which doesn't mean people won't try and say it.
A lender has a right to preserve collateral property, okay, that's been explained.
Default does not grant legal title in any lien state and doesn't grant possession in any title state, foreclosure is necessary. I've never heard of restraining any owner from their home prior to foreclosure, default doesn't extinguish ownership rights of anyone who has legal title. Could there be a situation? Yes, if the borrower had made threats to the lender (which would have been recorded as all institutional lender's phones are tapped) then the lender would have cause to ask for a restraining order. Would they get it, I'd say doubtful, ownership rights become a constitutional matter, I'm not a constitutional lawyer but I think there would be issues. Around here, it wouldn't happen, if the owner trashed the place, after making threats or even not, if it can be proven they were responsible, they'd be going to jail. :)
The following is a general common law analysis of basic Real Estate Law principles. The end result may not obtain in your particular jurisdiction, as it could easily be modified by statute.
You would be surprised how often people's "basic liberties" are impinged by a preliminary injunction or preliminary order. They are often issued even where someone has equitable or even real title to something. There is already a built in test that weights the liberty interests at stake with the likelihood that a litigant would be harmed. That would lie in the analysis for whether or not a preliminary injunction will be granted.
For a preliminary injunction to even be granted, the parties must show not only immediate irreparable harm will result, but that the parties are likely to succeed in the underlying case. This kind of grants a quasi-equitable title in the name of the bank. So you really have to characterize this as the conflicting interests of one party with equitable title v. one with real title.
If you want to see an application of this principle to other cases, one need look no further than how divorce proceedings shape out in most jurisdictions. There is a thing known as "pendente lite" relief where both parties may request exclusive possession of a house they both have legal title and/or equitable title to. A husband may be awarded sole possession of the house and the Wife may be forced out on the streets. The same outcome occurs regardless of whether the father is proceeding on a claim of equitable title to the house v. real title to the house. A husband may prevail on a pendente lite motion even if their argument is that they obtained equitable title by virtue of adding value to the house.
Clearly, preliminary relief can be granted limiting the liberty interest of an individual from entering a particular house.
How about as between an equitable title in a company v. an individual? Before I get there, let me show the principle in action between company v. company. I did find a case which can be found at 316 F.Supp.2d 1201, whereby a dispute between two companies over use and possession of a property, one with equitable and one with real title. Current possessor (real holder) was able to, pending resolution of the title action, have a preliminary injunction issued against the equitable holder.
Important note: I'm still reading case law on Company v. Individual, but I don't see anything in the relationship that would necessarily change the common law, but I'll get back to you shortly.
Yes, the case mentioned seems to favor the one with legal title as opposed to the claim of an equitable interest.
I'd sum that up by saying, "in courts of equity" as opposed to "courts of law" (while being in the same court). Hopefully, we find justice in there.
Appreciate your educational expertise and input @Matthew Kreitzer :)
Which reminds me, I don't give legal advice to anyone in a particular situation or circumstance, I just talk about my opinion from my experiences as an educational point. Just an hour or so I got a pm about practicing law, perhaps unknown by some, a teacher or instructor may teach on legal subject matters without having to be an attorney. I'm not an attorney, heck, I'm not even a notary, LOL. :)
Let say you put a down payment on a house at a foreclosure sale, and @Steve Babiak, feel free to jump in. The next time you went back the house was trashed. Upon talking with the neighbors you find out the police got called because the current home owners went in an maliciously trashed the house and made a bunch of noise in doing so. What if any recourse does either the bank or perspective buyer have.
I know of only one story where a guy bought a house at foreclosure and when he went to talk with the previous owner about moving out, the guy pulled a gun on him. The buyer went back to the bank and got out of deal. I am not sure if he had made final payment on the sale or not. I am thinking not. That came right from the paralegal.
But are the banks even getting a preliminary injunction to limit the owners access to the property?
Putting a note on the door along with a padlock would infuriate a returning homeowner. I expect a lot of those kicked in doors are the result of said bank actions.