Transcript:
Hey there, it’s Casey Denman at TaxSaleAcademy.com and welcome to our weekly question segment. Before we get to this week’s question I do want to remind you to go ahead and click on that subscribe button so you don’t miss out on future tax sale training videos.
This week’s question come to us from Tainehsa, and she wants to know what happens to the stuff inside of a house.
Taniesha, thanks so much for your question.
Alright, so you go to an auction and buy a house. You get the deed, you’re super excited and are ready to go over there today to rip out the carpet and begin your remodel. The only issue is that when you arrive and open the door, you discover that a hoarder used to live there. There is junk everywhere. I’ve heard stories of 4 roll off dumpsters full of junk.
So what do you do with it? Well that’s the interesting part. In most states you DO NOT own anything that’s inside the house. That’s right, you bought the house and it’s now serving as free storage for the former owner. So what happens now? Can you just throw all of their stuff away?
If only it was that easy. You certainly could throw it all away, but legally speaking you might not be allowed to. When the county forecloses on a property or if you foreclose a tax lien, you are only foreclosing on the real property – that’s the real estate and anything permanently attached to it. All of the junk that the owner left inside is not yours. Neither is that corvette that they left in the garage.
So let’s discuss vehicles first since their the easiest to deal with. Vehicles, boats, tractors, that kind of stuff will typically have titles and have their own sets of laws to follow. I’d contact local law enforcement and ask who they use to tow abandoned vehicles. Then call a tow company and let them deal with it. That vehicle isn’t yours and now, neither is the headache of dealing with it.
Alright, personal property is a little more difficult to deal with. Your state’s laws will dictate what you MUST do with personal property and it really varies from one area to the next. We’ll discuss a few of the requirements in various states, but one thing I want you to remember is that when you’re dealing with personal property you should do it in a manner where you won’t get sued. Just because it looks like junk to you doesn’t mean that there isn’t one single piece of paper, art, heirloom or whatever that the former occupants finds extremely valuable, and maybe it really is valuable. Mostly, it’s all junk but you never know and you must protect yourself just in case it isn’t junk.
The first thing I would do is carefully enter the property and take pictures of everything in every single room. Imagine yourself standing in a courtroom while you’re being sued trying to explain yourself. The more pictures you have, the easier that explanation is. After that it’s time to check your states laws. It’s time to give your local attorney a call and to figure out what’s next in that specific state.
Again, every single state has different laws. Here are a few, just to give you an idea of what exists:
In some states, the solution is to file for an eviction or writ of possession. And this isn’t necessarily to evict occupants although that the primary purpose, but that court action will also provide you with solutions for handling that personal property. Now you’re covered by the courts, provided you follow the stipulations for dealing with that personal property.
Many other states require that you make an effort to track down the owners of that personal property and provide them with an opportunity to claim it. In some states you really have to put forth a diligent effort to track them down – for example, if the owner is deceased, you’d need to find out who is handling their estate and provide them with that notice and ability to claim the property. Other states will allow you to publish an ad for the abandoned property in the newspaper for a couple of weeks and that will be sufficient.
On top of notifying them, some states require you actually store the property for a set period of time giving them the opportunity to claim it. Now you can charge reasonable storage fees in some areas, but delaying your flip for a hundred bucks probably isn’t all that desirable.
Other states do allow you to just move the property to the curb. Many time there are thresholds to adhere to – personal property worth less than $500 can be tossed and if it’s worh more than $500 you must go through the entire noticing and storage process for example.
The point with all of this is that the laws around abandoned property vary greatly. It’s so crucial that you take the time to learn these laws and MOST IMPORTANTLY that you MUST follow them. Many times, you’re dealing with just trash. Other times, however, you’re dealing with someone’s property. And they might think it is really valuable. And they might sue you. And if you failed to follow the law precisely, there’s a chance that they’ll win. And suddenly that junk is costing you thousands and thousands of dollars in damages. Be proactive in protecting yourself and always make sure you know and follow your state’s laws.
So I hope this has helped you. If you have a followup question or anyone else watching this video has a question, feel free to leave it below this video or any of our other videos’ right here on youtube.
And if we can help in any way there are a bunch of links below, including one to our primary site at taxsaleacademy.com.