Zombie foreclosures are creating mishaps for real estate purchasers throughout South Florida. Ground zero for the residential real estate collapse was right here in South Florida. So it should come as no surprise that problems continue to persist with foreclosures of so many of those homes.
What is a zombie foreclosure? As the name implies, a zombie foreclosure involves vacant property. It involves property that is being foreclosed where the homeowner vacated the property. But for various different reasons, the foreclosure just continues and never ends despite the fact that the property is vacant.
Abandoned by the homeowner, the home often falls into a state of disrepair. Appliances in the property are often stolen, the landscaping unattended, and the property otherwise becomes unsightly.
Such properties are often ripe for fraud. The fraud could come in the form of squatters unlawfully residing on the property, or efforts made by fraudsters to illegally convey the property that they don’t even own.
But what happens when the homeowner leaves the property in light of the foreclosure but the foreclosure is never completed? This is a new and growing problem that many real estate owners and purchasers are facing today.
In such a situation, and to repeat, the home often falls into a state of disrepair. The grass may be too high, the fence may need repair, or the property taxes may need to get paid. The municipality where the property is located will often cite the homeowners for those violations or impose a tax lien on the property.
Those liens will often need to be satisfied before the home can be sold. And the homeowner may not even be aware of the fact that he may still be responsible for those liens since he “abandoned” the property.
This situation also creates issues for individuals wishing to purchase properties involved in zombie foreclosures. In one recent case, here in South Florida, a real estate purchaser was found to be liable for the liens incurred on the property even though the liens were recorded after the entry of the final judgment, but before the judicial sale.
That court found that liens “recorded between final judgment of foreclosure and judicial sale are valid and enforceable.”
One of the best ways to avoid this situation is to perform a lien search and title search on the property. This will allow you to perform the necessary investigation, and due diligence, on the property prior to your closing. With that said, if you need assistance securing a lien or title search, or other assistance with your real estate purchasing needs, then please do not hesitate to contact us to discuss your situation further.