A $330,000 home for $16? Texas adverse possession law
wfaa.com
wfaa.com
The main thing that keeps him "legal" in a certain sense is that, due to particularities of Texas law, once he's filed that document, it's a civil dispute over ownership, not a criminal case, so police won't evict him for trespassing unless a court resolves the civil dispute first, and orders eviction. He's betting that nobody is going to get around to pursuing that case, even though they would probably win if they did (since he does not in fact own the property, either de jure or through sufficiently long de-facto possession).
I can see why the police didn't want to get involved when it was only the neighbors who complained. If the record owner were to complain (the one who walked away), the police might well arrest the squatter for trespassing.
My question for you, as a lawyer who might know this: can you beat an adverse possession claim simply by giving the squatter permission? Would a written notice permitting occupation for, say, 60 days, reset the clock on "continuous hostile actual occupation"?
That's pretty much the law everywhere in the U.S. (save perhaps Louisiana, which has a system rooted in Napoleonic law and not English common law). The mnemonic is ONCHA - open, notorious, continuous, hostile, and adverse.
> can you beat an adverse possession claim simply by giving the squatter permission?
I don't recall any cases off the top of my head. I doubt that an owner could unilaterally transform hostile possession into non-hostile possession; it'd be too tempting for the owner to try to fabricate backdated evidence of consent.
(Your question brought to mind a line from Henry Fielding, which my torts professor used to illustrate how consent is sometimes a defense: He in a few minutes ravished this fair creature, or at least would have ravished her, if she had not, by a timely compliance, prevented him. [3])
Even if he doesn't get the house he's still living rent free.
You can beat it with a peppercorn:
> [A] peppercorn rent is often used as a form of nominal ground rent where a (potentially substantial) premium has also been paid on commencement of a long lease of, say, 99 or 125 years (a "virtual freehold"). The notional collection of the annual peppercorn rent helps to maintain a formal Landlord and Tenant relationship between the two parties, precluding the risk of a claim for adverse possession from the tenant arising, were no consideration to be paid for an extended period.
http://en.wikipedia.org/wiki/Peppercorn_%28legal%29
(In this case, a 'peppercorn' is any tiny amount of money or other consideration, which is required to make a contract valid. It may, in fact, be a literal peppercorn.)
So in this case, it's a matter of "I dare you to come clear me out from your house - but if you do, here are some banks that would be really interested in your current phone number"
My personal opinion is good on the guy, if hes smart enough to find a way to legally obtain a house like this then more power to him. Mrs Lowrie is just pissed she didnt get the same opportunity.
It seems weird to me that anyone would cheer him on. Within reasonable limits, a shorter time based hurdle to adverse possession claim is more homeowner-friendly. Texas is on the lower side at 10 years. The only possible outcome to a spate of bad-faith adverse possession claims is for the state to jack the limit up to 20 or 30 years.
† More commonplace application of adverse possession: I build a new garage, but somehow get the property line wrong and impinge on my neighbor. Nobody notices. Later, I sell my house to you. A couple years after that, my old neighbor sues you.
Throughout the Americas, the same logic that one can claim ownership of unused land underpins most land titles - e.g. the original entitlement of most of Texas was made on the basis that the land was underused. One need only look at the sovereign land grants which most title histories in the US begin with.
As it happens, the organized might (the government) has decided to maintain and enforce a regulated market in real estate, largely to everyone's benefit.
But I'm not sure that the doctrine doesn't also have a historical purpose of inviting people to make productive use of abandoned/derelict property. Especially in pre-20th-century legal treatises, that seems to be taken for granted as one of the reasons for the adverse-possession doctrine, and in the American West it was frequently used that way, as people took over farms or ranches that had been abandoned by the landowner, e.g. because he moved away without disposing of it, or died with heirs who never showed up to take possession.
The Homestead Act of 1862 was even more or less a formalization of one particular kind of squatting, on government land, which previously had been done under the adverse-possession doctrine (with the U.S. losing title for not making use of the property).
Furthermore, the articles author pointed out that original owner was foreclosed on and promptly went mia and company which owned the mortgage went under. Its that either of those 2 parties or even a third party will assert their rights over the property, but until that occurs he is the legal owner as he legally filed as such. His neighbors can moan about it all they please, but they have no standing in the case whatsoever. Example: Someone defrauded Southwest Airlines: me having nothing to do with the case cannot bring fraud charges against whoever did; I have no standing in the case. I could have been standing right next to the guy that did it, as he did it, but I still have no standing in the case.
Thirdly, who's misfortune is he taking advantage of? The homeowners? No, they didn't pay their bills and left, the title went to the mortgage company. The Mortgage company? No, they went under. Whoever working there had long since lost their jobs and most likely found new employment before this guy applied to legally own the property. You want to make this guy out to be a bad guy because he doesn't use things the way "normal" people do and he got ahead for it. You are boring and lack any relevant imagination.
In this case, he looked into what the legal status of a home is when the mortgage paying owner abandons it, and the mortgage company ceases to exist. Answer: nobody owns it, and whoever files paperwork and actually starts living there gets it. Go figure.
To those saying "pay the $300,000!": to whom? The homeowner? he gave up ownership by moving out and abandoning the mortgage payments. The mortgage company actually owns the house until it's paid off, but if the company goes defunct then nobody owns it. There is nobody to pay!
Meanwhile, this is a terrible outcome for the neighborhood. Many people on HN are no doubt failing to find ways to shed tears for mortgage companies, but during the 10+ (note carefully that "plus" sign) years this guy's BS claim to the house takes to resolve itself, the house is out of the market; it can't be sold to anyone, at any price. It must instead be occupied by someone who has virtually no incentive to maintain or improve it.
I don't see why the neighborhood cares at all, or why anyone should care what the neighbors think.
My brother owns rent houses; from the stories he tells, he would disagree even about renters, let alone squatters.
And recall the quote attributed to Lawrence Summers: In the history of the world, no one has ever washed a rented car. [1]
It's funny, my brother did that just last week. It was extremely muddy from when he got it stuck in the middle of a pasture.
Man, I'm sure glad Lawrence Summers doesn't go to Burning Man. But if he did, it sounds like his entire worldview would be destroyed.
Then again I am a bit older, arguably a bit wiser, and I haven't even considered cleaning a rental car since then.
There must be some aspect to this that you all know about but I'm missing.
But if it actually takes them more than ten years to figure out that someone else is living in their house, even when this has hit the national news, just how well can they be maintaining the property? You'd think they would notice the problem the first time they cut the grass.
Speaking of, good job assuming that this guy "owning" it is somehow not keeping it up. Stereotypes will get you far. I can't way to read what you say when it turns out this guy is not only poor, but black or muslim so you can think even less of him.
Why don't you do it?
Care to quantify that? No indication was made in the article that this guy is (for example) stacking junk cars in the front yard with a forklift, throwing all-night keggers, practicing his drum solos at 3:00am or setting up a meth lab in an unused bedroom. So how, exactly, is the neighborhood impacted? Hell, if he mows the yard that's a net gain...
A company goes defunct when their debt obligations grow bigger than what the company is worth. It is said that "liabilities are bigger than asserts" on the balance sheet:
http://en.wikipedia.org/wiki/Balance_sheet
So if the company can not pay its debt, the company is given to its debtors.
So THERE IS ALWAYS SOMEONE WHO OWNS the house, those that expended the money for the house to be built and own the debt. Odds are that the $300.000 is worth $100.000 in the open market today(if they want to recoup the investment) and they will loose money but it is not $0 or $16.
Given this litany of errors, you ought not be offering the rest of us "lessons from Econom[ics] 101" and posting sentences in all capital letters.
Now then, I believe that in Texas law, and in the common law in general, you cannot abandon title to land. However, that is not the case for many other assets; if a company abandons some chattel property, before or after entering bankruptcy, the bankruptcy trustee does not gain the right to sell that property.
Also, under civil law, which is in effect over much of the world (although not in Texas), title to land can indeed be abandoned.
By locking up a property in pointless litigation, this person has taken one house in the neighborhood and made it illiquid. The squatter is extremely unlikely to prevail in the long run. The incentives are not set up for them to, say, plant trees or properly rebuild roofs. In fact, the incentives are the opposite: the rational squatter does the bare minimum required to claim continuous actual possession, while investing in some other property where maintenance and improvements promise an actual return on investment. The incentive structure for squatting almost begs for meth labs.
Adverse possession isn't the state's way of making sure houses are put to good use.
If the neighbors really want a say in it, they're free to pony up the money, track down the owner, and fight their own court battle to buy the place and then rent or sell to somebody they'd rather see there. It would probably be pretty cheap, actually, even with legal fees. But people always find it easier to say "You can't do that" than to say "We can do that."
This is also assuming that the company went bankrupt by being worth less than their total loans. It may have been a case of the company simply loosing income and being unable to pay their financiers, even when the loans were worth less than the total value of the company. In such a case I don't know what happens to the "left overs", but I assume that they would belong to the shareholders.
And that's for the mortgage holders that are still in business. This one isn't. Presumably someone holds their assets - but my guess is they're in even more frightful a mess.
It is not curious, it is obvious:
First they hate to have a neighbor that is not used to buy things like they do. Maybe they consider this action stealing somebody else property, as it is in fact.
People don't like thieves as neighbors that claim property of what "you don't use", I met a guy that stole bicycles and motorbikes as "nobody uses them"(when they did not use it for periods of 20 or 30 days, witch made it easier to rob).
In Spain and Romania, gypsies use to enter your property and steal everything they can if there is not somebody watching. E.g they steal the copper for the power grid from public railroads at night, in south crops they steal the copper from transformers that make electrovalves work. In Spain something like 20 people die every month stealing copper(electrocuted).
They have someone from a different socio economic status too.
If the home is free,then they want to have the opportunity to buy it at free market. They will have family members or friends that are in need to.
Those people think that if they respect the rules, everybody has to respect it too, because if they don't there is not reason they have to work, they can steal or kill for getting what they need too.(maybe even better).
Well, and the fact that if they don't scrape and repaint the peeling paint in the living room, they have to live in a living room with peeling paint.
I just came back from fixing my bike at a pizzería that's been squatted for about ten years now by a group of local anarchists and other socialists, who have converted it into a community center. Twice a week they have bike-fixing workshops, where they teach you to fix your bike and supply you with the tools and the parts you need. (And solicit donations.) The place is a lot better maintained than many buildings I've been in around here.
If your beliefs about incentives and rational economic matters fail to describe how people actually behave, you should revise your beliefs.
(Yes, squatting is risky, because you could lose everything you've worked for. It would be particularly amusing if you were really arguing that risking working for years and then losing everything is irrational on a web site devoted to high-tech startups.)
Though, now that he is one of those black people it is safe to say that the neighbors are right and people like that should not be allowed to vote irregardless of laws written in the mid 1800's. I hope everyone makes it out Sunday night to the neighbor hood klan meeting so we can all praise white jesus, drink beer, and talk crap about all those seedy black people.
1) Research a system to find a vulnerability 2) Exploit the vulnerability 3) Profit
Good for him but I think the real challenge will be keeping the house over the next x amount of years until his name is on the title.
Enormous relative to what? The taxes may be less than low-end rent.
> I wonder what his plan is for that.
His plan better be to be paying the taxes now.
If no one is paying the taxes, the folks who want taxes are going to foreclose and boot the guy out. His "squatters rights" won't help him against that.
[1]: http://dallasdirt.dmagazine.com/2010/10/05/texas-property-ta...
Why does this matter? Bank of America never actually foreclosed, so the original owner[1] is still the owner of record. The original owner can still contest the adverse possession in short order without dealing with the mortgage mess, assuming he cares to do so. In addition, BofA can foreclose and then evict the current occupant.
1 - Not naming the current owner here, but it is a public record.
If you ever have to do this, buy a lead pipe. Otherwise, the top of a fencepost is an annoying high target to hit with a sledgehammer! You simply put the lead pipe around the metal fencepost and you use it like a pile-driver against a couple of flanges close to the bottom.
If the neighbors are too stupid/lazy to contact the owner of record and do something about this, instead of complaining to the cops who have no authority in this case, then they deserve to have their desires frustrated.