A home is considered a zombie property when a homeowner moves out of after receiving a foreclosure notice, but the bank does not complete the foreclosure process. As a result, the vacated property remains in the homeowner’s name.
Zombie properties may fall into terrible states of deterioration since no one is occupying or caring for the property. Many banks simply walk away from such properties and leave the problem to the homeowner if it has become too deteriorated.
Recent statistics estimate that there are over 300,000 zombie properties in the U.S.
A zombie property is essentially an abandoned property, except that the homeowner may still be retaining the title unknowingly. Zombie properties are associated with various legal issues such as:
- Deterioration and loss of value of the home
- Creation of unsafe conditions and safety/health hazards, such as toxic mold, hazardous chemicals, and dangerous structures
- Issues with people squatting on the premises or the takeover of the property for crime-related activities, such as drug-dealing or gang activity, as this can lead to a public nuisance issue
- Failure to follow city codes regarding lawns, tree growth, animal control, pests, and other issues that can lead to the city condemning the home
- Issues with back taxes owed on the property
One of the main concerns is where the homeowner begins facing fines, back taxes, or tax evasion issues due to the property. In some cases, the local government may be seeking to find someone liability for the condition of the home, especially if it is causing problems for the surrounding community. In this case, liability might be traceable back to the homeowner if their name is still on the title. Some may face fines or even jail time if certain deadlines are not met.
Most zombie foreclosures can be prevented by simply following up with the bank or with the real estate agents to ensure that the foreclosure process, or the home sale transaction, has been fully completed. You should check to ensure that the title has shifted and your name is no longer associated with the deed.
Alternatively, you can explore various foreclosure alternatives, or see if there is any way that you can stay on your property longer. In many cases foreclosure could have been avoided through a simple re-negotiation of mortgage terms, or other similar actions. Lastly, you can always consult with a real estate professional or with a lawyer for more information regarding your options.
Being involved in a zombie property situation can create a number of different legal issues and disputes. It may be in your best interests to hire a real estate lawyer in your area if you need help with your property. Your attorney can provide you with legal advice and guidance that can help you avoid a zombie foreclosure situation. Also, if you need to appear in court, your lawyer can provide you with legal representation during trial or hearings.