Hey guys,

CALIFORNIA: Need some insight or help on this situation. I don't want to be too specific because it is still on-going. But here I go:

Last Week some people moved into my REO property thinking they were renting it. I found out 2 days after their move-in that people we're living in the home. We are 1 1/2 weeks into escrow. I told my asset manager and they instructed me to call local police and remove anyone from the property. I showed up with police, gave them all paperwork to indicate it was bank owned (Writ of possession from the court, utilities bills, MLS sheets, DRE License number).

After this, we knocked on the door to inform the individuals that this was bank owned. They said they leased the property and had a rental contract. I informed them whatever contract they had was no valid because it wasn't from the owner of the property. So, we look at the contract and they try calling the person who leased it to them. Straight to Voicemail. Next, we asked how they paid... they said cash. At this point the officers treated the individuals as victims of fraud.

I had difficulty trying to get the officers to enforce the individuals to leave the property. They didn't want to leave because they felt they had some type of renters right. In any case, the police didn't want to arrest unless I signed off on a citizens arrest. I said if they couldn't convince them to leave then I would sign off on it.

Long story short, (haha its long already) they got them to leave and now its Monday and the individuals want to go back to pick up some clothes, but I already let them in this morning. Based on conversations too long to post here, I believe one of them is going to try to stay in the property so I have to force them to be arrested and possibly face legal consequences.

If you were in my situation, would you let them in the property again to pick up clothes? Would you call the police if they refused to leave? Would you have them arrested if you had to sign a citizens arrest?

Do they have any recourse or any rights to stay in the property? I believe there is no tenancy relationship as the bank wasn't aware of this lease hence making the contract they signed void... they are victims of fraud and if they do not leave they are trespassing.

If you know for sure they have ITEMS they want or need I would contact the police for a friendly escort to get there items and then kindly try to find them a rental on the mls so they would not be victimized again (keep it as simple as possible) of course if they are playing games a quick arrest would probably be the way to go..... Of course run it by the AM.... I actually am dealing with a similiar circumstance to long to post here....
And of course anyone feel free to correct me if I am wrong in my thinking!

I'd let them back in to pick up clothes, but see if you can get a police escort to help with it. If they refused to leave, I would have them arrested. Their lease is not valid because it was not signed with the owner of the property. What if the property was a vacation property and the owner was only there half of the year? Would the police still feel the same way about removing the "tenants"? Probably not. They only feel that way because it's a bank owned property...

My question is "Did the former owner (the one forecclosed on) sign the contract?" If the answer is yes, "Was the contract signed before the foreclosure?"

Just some considerations.

doubtful--property was already in escrow when the "tenants" moved in....

Calzone,

The former owners were foreclosed on in September 2008. They were finally evicted March 2009. So that's quite a bit of time. Some of the Cops were doubting me in the right to have the people removed. Isn't that why they asked for me to do a "Citizens Arrest" instead of the cops placing them under arrest?

I do not know about Cali law but in FL you do not want to let them back in unless there is a police escourt and the "tenant" tells the officer in advance that they are only there to pick up property and will leave willingly before being let in.

That way the officer knows if they are trying to run a scam and will be more on your side as far as making them leave.

I would also require that they sign a document that they are removing ALL of their property that they wish to keep and grant you permission to dispose of anything that is left in any way you see fit.

Make sure all persons over the age of 18 who were living there sign it. As I said initially I do not know anything about Cali Law and would run it by your brokers Law Dogs before proceeding.

Good Luck to you.

If the prior owners were evicted, then the eviction notice , signed by the local Sheriff, should still be posted in the window.

I bet you took it down to make the property more "appealing".

LandBaron,

Come on, you can't think farther ahead? I did not take it down, but the people who pulled the scam I've been writing about above didn't forget to take it down!

hahaha nice try buddy...

I am bumping this thread to ask a few questions. First, did these "tenants" have the water and power turned on? Secondly, who rented the house out to them, and how did they initially gain access to the home? I realize that they are getting a VM when trying to call, but that number could be easily traced by authorites.

Is this your listing? Where there ever any keys missing from the lockbox? This is just such a wierd situation....

My final question is how did you make out? Are they out of your hair now, and are you free to close?

The situation happens here quite often. I had one of my investors properties taken over and rented out. We all know its not that hard to get into a vacant property and rekey it. As far as the utilities thats fairly simple as well. All it takes is a phone call (in my area). If the power has not been active for 12 months it requires an inspection. If the tenants are tricked and living in the property, the police will not intervene. They say its a civil matter. Many have duped by this scam, enough so that in my area, the media has been pushing the following advise to would be renters.

Red Flags:

If the deposit and rent is lower than it should and very negiatable but it has to be paid in cash.

The initial viewing of the property has no utilities turned on.

They suggest:

Verify that who you are dealing with is actually the owner or an agent of the owner.

Only pay with a check or money order. If they are legit they won't care.

Take a picture on your cell phone of the landlord. If they are legit, they won't care.

An update would be nice as well.

Brad, The "tenants" had all utilities transferred into their name. They were already on in my name, but they simply called to transfer the utilities into their name.

Second, the person who rented the house to them was using a pre-paid phone according to the police. They do not know who it is as he apparently also used a fake name.

They initially gained access to the home by getting the keys from the person who scammed them. The person who scammed them gained access by breaking into the home. I have 2 lock boxs, one supra and another combo. The supra was on the door knob and taken when they switched the keys. The combo was left alone. Long story short, they broke in through the back.

And to update you all, REODAYTON, I was fortunate enough that police did not treat it as a civil matter. They were pushing for that at first, but they had higher level police officers come to the scene who then determined the court paperwork I had was legitimate and that the people were trespassing. The police officers required that the tenants leave the home or be arrested. They tried to get me to sign a citizens arrest, but were able to convince the people to leave before that happened.

To finish the story, the "tenants" kept calling me to get back into the property and threatening to sue the bank. They insisted that they were unlawfully evicted, but I told them to be evicted they had to be tenants first.. which of course they weren't since the owner didn't sign the lease.

I paid $80 to get them a Uhaul and they finally moved their stuff out and now we're back in escrow...

Those tips you have are great for anyone you know who's looking to rent. Scam artist keep getting better and better.

Glad it all worked out cheaply! Thanks for the update

Hey quick quick update and question on this topic. So everything went well and we sold this property without any arrest or delays in the escrow (besides the buyers loan!). My asset manager was extremely happy and thought I went above a beyond to protect the interest of the bank and CC's his email to the Portfolio Manager.

1, I'm assuming this is really good that he sent this email I'm assuming this will mean more business from them?

2, who is the portfolio manager?

Congratulations.

The portfolio manager is with the AM company and covers a specific customer (like Chase et. al.) and is usually the direct interface with that customer.

Did you get reimbursed for the Uhaul?

Check your local Craigslist. Two of my listings received renters from there. The "showing" rental agent even had the lockbox code and help an open house. Three families were scammed out on nearly $3,000 in wire transfers. Some local dog of an RE agent had to have been in one this. Local telephone numbers were traced to three different counties before being lost. What an elaborate scam.

Earlier this year there was a television news article about two L.A. area real estate agents who were arrested for renting out vacant lender owned properties to unsuspecting tenants. The article stated that they obtained LB information from the MLS, removed for sale and other window signs and ran their scam by accepting cash only from renters.

We certainly need to utilize the neighborhood watch program to help us avoid such situations.

Interesting story. I wonder were the "tenants" told where to send rent money? If not, this should have raised a big red flag as would the cash only deposit.

I had a similar incident where someone posted a sign on my REO for rent. After I asked city police to call the phone number and investigate the situation, their response was basically
"Its your property, you manage it."

They ripped my sign out and its no where to be found around the property. They also took all the notices on the window from FAS, Sherrif, etc? haha unlike what Landbaron Mr. Jump to conclusions guy stated.

But the "tenants" were about 21 years of age so kinda of naive and gave the guys cash. Huge RED Flag. We just need to check our REO's out at least once a week. Even then, anyone can pull this scam off in less than that time but it still helps.