Moving into an Abandoned Home

by Stacy

Can you move into an abandoned home and assume the taxes and mortgage? It seems like a good way to make sure the houses that now are abandoned are getting cared for.

Editors' Reply: Well, we agree with you that this is oh so sensible.

Unfortunately this isn't quite the way it works.

The first point is that even if a house is abandoned, someone still owns it. That "someone" could be a government that receives tax-delinquent property, or it could be a business, an individual, or an estate.

Especially if abandonment isn't quite common in the immediate neighborhood, an unsettled estate is a common reason for the existence of an abandoned house.

So the owner must still be dealt with fairly. This is a constitutional principle in the U.S.

To make matters even more complicated, mortgages and taxes due from an abandoned house are dealt with differently.

Taking up the question of mortgages first, the bank or other lender has the right to foreclose on the property when payments are not being made. There is a particular process for foreclosure in each state, and then each lender will have their own procedural wrinkles to how aggressively and how quickly they pursue the legal remedy of foreclosure when payments are not made as scheduled.

If real estate taxes are not paid, again each state has laws setting forth the process for the tax-delinquent property to be transferred to another owner. Sometimes it is auctioned off (on the courthouse steps, as they say--sometimes this is the literal procedure). If no one bids, though, there will still be a governmental office that is charged with taking title.

In other cases, there is no auction procedure, and properties where taxes have not been paid for some specified number of months or years go directly into a land bank or just are held by the government.

Governments vary widely in how they attempt to dispose of tax-delinquent properties. Some proactively try to market the properties to private owners, which may include offering it to the adjoining property owners for a dollar or for fair market value.

Other governments just sort of let the property sit in their inventory until someone approaches them to try to buy it.

The big points are (a) a property that appears to be abandoned still has some owner, even if that owner is a government, (b) unpaid mortgages are governed through the state's foreclosure process, and (c) unpaid taxes result in the property ownership eventually reverting to the municipal government that did not receive the taxes.

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