Dear Pink Realtor,
A friend of mine says we can take over abandoned houses in Broward County by moving in and paying the taxes because of a law called adverse possession. It sounds too good to be true, but I Googled it and the opportunity seems legit. If this is legal, I could make millions this way!
Too Good to be True?
In investing, as in life, if it sounds too good to be true, then it probably is.
The “law” you described dates back to 16th century England. Adverse possession allowed people to take over abandoned cottages and farmland, provided they were willing to live there and pay the taxes. The purpose was to prevent abandoned properties from sitting idle with no one paying taxes on them.
In modern times, adverse possession has been used primarily to take over abandoned farmland or settle boundary disputes, such as a fence or building encroaching on a neighbor’s property. Florida law allows non-owners of a property to eventually take ownership if they pay the taxes, occupy, maintain and improve the land for seven years.
One of many fraudulent schemes resulting from the housing crisis: Trespassers are attempting to use the legal doctrine to claim ownership of vacant or foreclosed homes.
In Broward and Palm Beach counties alone, adverse possession claims have been filed on some 200 homes in recent months. Three of the four people behind the mass claims have been arrested, and police are investigating the fourth man.
In theory, abandoned houses could be taken through adverse possession. This would require seven years to pass with the property owner making no attempt to occupy the property, pay the taxes or liens, or sell. This is extremely unlikely given that most vacant houses are in foreclosure or bank owned. Vacant does not equal abandoned!
No matter how you slice it, this is extremely risky legal ground. Claimants break other laws if they trespass, break into a home (breaking and entering/burglary), take possession (grand theft) or collect rent without being the actual property owner (fraud).
Antonio Vurro owned an empty rental home in Sunrise that he was trying to sell when he discovered that someone had moved in, changed the locks and was trying to open a utility account.
The occupant, Fitzroy Ellis, told Vurro he was entitled to take over the home because it was abandoned. Police disagreed, and Ellis, 64, is now in the Broward County Jail charged with six counts of grand theft.
Ellis tried to claim 48 properties in Broward, including a $1-million house in Coral Springs, through a company he formed called Helping Hands Properties Inc., county official records show. He told a Plantation police detective he planned to rent out the houses and condos and could offer tenants a good price “since he didn’t have to pay anything for the homes,’’ according to a police report.
Ellis, who is representing himself, wrote in court documents that the allegations against him are “false and an abuse of power.’’
Another South Florida man, Mark Guerette of Wellington, filed notice in official county records that he was taking possession of 100 homes in Broward and three in the Palm Beach community of Lake Worth through Saving Florida Homes Inc. and two other companies. On one day last November, he filed takeover notices on 10 condos in the same North Lauderdale complex at 1200 SW 52nd Ave., records showed.
Police say Guerette, 46, rented out six of the properties and collected more than $20,000 from tenants before he was arrested in April. He pled not guilty to a charge of organized scheme to defraud. His lawyer, Robert Shearin, said Guerette is nothing more than a good samaritan, rescuing blighted homes.
The bottom line: Consult with a professional (or two) when considering any investment opportunity. When considering real estate investment, ask your licensed agent and/or real estate attorney for references, professional designations, professional associations and license status, and verify them all.
And remember: If it sounds too good to be true, then it probably is.