Personal Property Remaining in Foreclosed Property


Here’s the problem:  You buy a house that’s been through foreclosure.  You go in the day after you receive your deed, and there’s stuff everywhere!  It looks like trash.  On the other hand, my husband used to develop Class A self storage facilities, and you wouldn’t believe the junk people pay good money to put in climate controlled storage for months and years at a time.

So, what do you do about the personal property in the house? Are you allowed to throw it away?

The answer is: it depends.  If you bought the property on the courthouse steps, you should give the former owners a Ten Day Demand for Possession letter.  That letter gives them ten days to surrender possession of the property or lose their right of redemption.  If you give such a letter, then it makes sense that you have to give them at least ten days to remove their stuff.

What if the ten days has expired?  You can’t just automatically assume you are entitled to everything left behind, and can haul it to the dump or sell it, as you see fit.  I’ve asked a number of attorneys for advice on this issue, and here are their suggestions:

Suggestion One: Photograph or video record everything in or around the house, THE FIRST TIME you enter the property.  Have someone with you as a “witness” in case that’s necessary in the future. The witness will testify you did not remove all the valuable stuff in the house and THEN record the trash that remained.

In addition, send a certified letter to the property address, advising the former owner that you’ve taken possession of the property and changed the locks.  You will give them 15 to 25 days to remove any possessions, but they will have to make an appointment with you for supervised access.  Typically, people will have turned in a forwarding address by that time, and the letter will be forwarded to their new address.  It can take up to 10 days for mail to be forwarded, though, so that’s why the lawyers recommend a 15 or 25 day time period for removal of the personal property.  If the green card comes back with a signature, and the time expires, get rid of everything.

I would add something extra to this strategy:  burn the photos or video on a CD, and include that with the letter.  I would do this because of my self storage experiences.  In the self storage industry in Alabama, you are required to give defaulting renters a general description of the property in their storage unit before you can run the newspaper notices and auction it off. That’s in case they forgot they had something valuable instead of just junk.  For a foreclosure, I would follow the example of the self storage industry. This does two things:  it shows good faith because the former owners might truly have forgotten they left behind something valuable to them. Remember, too,  “there, but for the grace of God…” it might have been you who lost your home in foreclosure.  You can make money and be compassionate at the same time.  The CD also shows the former owners you have a well documented file, and they shouldn’t mess with you by filing frivolous lawsuits claiming you stole the sterling silver they accidentally left behind.

Suggestion Two: The second most popular suggestion from the lawyers was to file an ejectment action.  Normally this is used to get a non-tenant occupant out of property they are not entitled to occupy. (Tenants, of course, are removed via an eviction.) Even if no one is actually living in the foreclosed house, the lawyers say to file the ejectment action anyway.  It will cost you approximately $350 in court filing fees, and another $150 to $200 for the lawyer. At the end, you will have a court order officially terminating anyone’s rights to possession and rights to any personal property remaining on the premises.

My Personal Advice: Do the photo/video thing with a witness in every single foreclosure property you buy.  Even if it’s spotlessly clean with no debris, you never know what people are going to claim a few months later regarding personal property left behind.  Always send a letter advising the former owner they have a short period of time to request access for any personal property left behind, otherwise it will be considered abandoned. Send the CD with your photos or video, even if the house was completely empty.

If you are unable to get a signed green card back, THEN go through the ejectment lawsuit. The ejectment lawsuit should be your “insurance” in case you are not able to reach your goals with a simple letter.

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5 thoughts on “Personal Property Remaining in Foreclosed Property

  1. Thanks! This is an issue I have had numerous unsatisfactory suggestions on. These both sound much more acceptable. I assume the green card is a card you send with the letter with containing some kind of an agreement. I believe you inadvertently left out its description.
    Steve

    • When you send something by certified mail, return receipt requested, you fill out a green card with your mailing address. The post office sticks the green card on the back of the envelope. When the person to whom you sent the letter signs for it, they sign the green card. The post office then pulls off the green card and mails it back to you. It is your proof that the person, or someone at their household or place of business, actually received the letter you sent to them.

  2. Thanks Denise! The questions about Personal Property have come up many times over the past 2 or 3 years; especially with some of the beach condos that are fully furnished and rent ready. I shared your post with my Daily Foreclosure Report subscribers so hopefully a few of them will subscribe to your blog too. Have a great day!

    • Please talk to an attorney, but Alabama Code Section 32-13-1 might help:

      Abandoned motor vehicle defined; posted notice.

      For the purposes of this chapter, an abandoned motor vehicle shall mean a motor vehicle as defined in Section 32-8-2:

      (1) Which has been left by the owner, or some person acting for the owner, with an automobile dealer, repairman, or wrecker service for repair or for some other reason and has not been called for by the owner or other person within a period of 60 days after the time agreed upon and within 60 days after the vehicle is turned over to a dealer, repairman, or wrecker service when no time is agreed upon, or within 60 days after the completion of necessary repairs.

      (2) Which is left unattended on a public street, road, or highway or other public property for a period of at least seven days; or which is unattended because the driver of the vehicle has been arrested or is impaired by an accident which causes the need for the vehicle to be immediately removed as determined necessary by the law enforcement officer, or which is subject to an impoundment order for outstanding traffic or parking violations; or left unattended continuously for at least seven days in a business district or a residence district; or if left unattended in a business district that has at least one posted notice in an open and conspicuous place indicating that there is a time limitation on the length of time a motor vehicle may remain parked in the district and the motor vehicle remains unattended for a period of time in excess of that posted on the notice; or left unattended in a business district or residence district that has at least one posted notice indicating that only authorized motor vehicles may park in that district and the owner of the motor vehicle or his or her agent has not received the required authority prior to leaving the motor vehicle unattended; or left unattended on a private road or driveway without the express or implied permission of the owner or lessee of the driveway or their agent. A posted notice when required by this chapter shall meet the following specifications:

      a. The notice shall be prominently placed at each driveway access or curb cut allowing vehicular access to the property, within five feet from the public right-of-way line. If there are no curbs or access barriers, the signs must be posted not less than one sign each 25 feet of lot frontage.

      b. The notice shall clearly indicate, in not less than two-inch high light-reflective letters on a contrasting background, that unauthorized vehicles will be towed away at the owner’s expense. The words “tow away zone” shall be included on the sign in not less than four-inch high letters.

      c. The notice shall also provide the name and current telephone number of the person or firm towing or removing the vehicles, if the property owner, lessor, or person in control of the property has a written contract with a wrecker service.

      d. The sign structure containing the required notices shall be permanently installed with the bottom of the sign not less than four feet above ground level, and be continuously maintained on the property for not less than 24 hours prior to the towing or removal of any vehicles.

      (3) Which has been lawfully towed onto the property of another at the written request of a law enforcement officer and left there for a period of not less than 60 days without anyone having made claim thereto.

      (4) Which has been abandoned, has an expired license plate, or is inoperable in a parking area on private property maintained by the property owner or his or her agent for use by his or her tenants, residents, or their guests. A vehicle shall be defined as abandoned or inoperable under this subdivision if it has an expired license plate or has remained in the same parking lot for a period of 30 days or more. To bring a vehicle within the provisions of this subdivision, the property owner or his or her agent shall post a dated notice in a conspicuous place on the vehicle in question stating:

      a. That the vehicle has been determined to be abandoned or inoperable and will be removed at the direction of the property owner or his or her agent upon the expiration of seven days from the date of the notice.

      b. The name and address of the last registered owner of the vehicle in question and the name and address of the property owner or his or her agent and a daytime phone number for the person giving the notice.

      A copy of the notice shall be mailed by regular mail to the last known address of the registered owner, if ascertainable, on the date of posting or not later than the next business day. Calculation of the seven-day notice period shall commence on the date of posting of the notice on the vehicle.

      (Acts 1971, No. 1154, p. 1999, §1; Acts 1989, No. 89-758, p. 1534, §1; Act 98-609, p. 1339, §1; Act 2003-402, p. 1170, §1; Act 2012-227, p. 418, §1.)

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