Can Squatters Really Take Over a House? What Real Estate Agents Can Learn From a $4.4 Million San Francisco Property
Most real estate agents associate squatters with abandoned buildings, distressed neighborhoods or properties that have been neglected for years. A recent case out of San Francisco shows why that assumption can be dangerous. The property involved is located in Sea Cliff, one of San Francisco’s most expensive neighborhoods. Zillow reportedly estimates the four-bedroom home at approximately $4.4 million. Yet according to recent news reports and a lawsuit filed by the San Francisco City Attorney, people allegedly moved into the vacant property and began asserting ownership through a series of questionable deeds.
What Happened?
The property at had apparently been vacant for an extended period after its owners left the country. Neighbors reported unfamiliar people coming and going from the home and eventually expressed concern that individuals appeared to be living there. But this case went far beyond someone simply breaking into an empty house. According to the San Francisco City Attorney, a series of allegedly fraudulent or questionable deeds were recorded involving the property. The City alleges that the individuals involved attempted to use forged or altered documents to establish ownership and ultimately gain control of the home. The City’s lawsuit seeks to invalidate the disputed deeds and prevent the defendants from claiming ownership or attempting to sell the property.
Reports indicate that the property’s title changed between two individuals multiple times during approximately a one-year period. Even more concerning for real estate agents, at one point someone reportedly attempted to sell the property. The approximately $4.4 million home was allegedly offered for $2.9 million, with potential purchasers reportedly being encouraged to close quickly and with cash. That is where this story becomes particularly important for real estate professionals.
Squatting Can Become a Title Problem
Agents sometimes think about squatters primarily as a possession problem because someone gets into a vacant house. The owner discovers them and starts the legal process necessary to remove them. But the San Francisco case demonstrates a potentially more serious variation. An individual occupying a vacant property may also attempt to create the appearance of ownership. That might involve: recording a questionable quitclaim deed; forging an owner’s signature; using fraudulent notarizations; repeatedly transferring the property between different individuals; attempting to obtain loans against the property; or attempting to sell the property to an unsuspecting buyer. Once documents begin appearing in the public record, what initially looked like a trespassing problem can become a complicated title dispute. And clearing title may require litigation.
Why Vacant Homes Are Particularly Vulnerable.
Vacant properties present opportunities that occupied homes generally do not. If an owner lives in a property every day, someone cannot easily change the locks, move furniture into the house or begin representing to neighbors that they own it. But imagine a property where:
- the owner lives outside Nevada
- the owner lives outside the United States
- the property is part of a probate or trust administration
- an elderly owner has moved into assisted living
- a second home remains vacant for months
- a foreclosure has been delayed
- utilities remain connected
- nobody regularly visits the property
Weeks or months may pass before anyone realizes something is wrong. That makes vacant homes attractive targets.
Real Estate Agents May Be the First Line of Defense
Agents frequently know more about the physical condition of a property than almost anyone else involved in the transaction. An agent may drive by the property. A photographer may visit. A landscaper may report that something appears unusual. A neighbor may call the listing agent. A lockbox may disappear. Someone may suddenly claim that they are renting the house.
Those warning signs should not be ignored. If an agent represents the owner of a vacant property, particularly a probate estate, trust or absentee owner, periodic monitoring of the property can be extremely valuable.
Warning Sign No. 1: The Locks Have Changed. One obvious red flag is discovering that a key or lockbox no longer provides access. Do not automatically assume someone simply misplaced a key. If the locks have unexpectedly changed, determine immediately who changed them and why. An unauthorized change of locks may indicate someone has entered the property and is attempting to establish possession.
Warning Sign No. 2: Utilities Suddenly Become Active. Another possible warning sign is unexpected utility activity. Electricity, water, internet service or trash service being activated at a supposedly vacant property can indicate that someone is occupying it. Owners of long-term vacant properties may want to monitor their utility accounts and promptly investigate unexplained activity.
Warning Sign No. 3: Someone Claims to Be the Owner. Real estate professionals should be especially careful when dealing with someone who suddenly appears claiming to own a property. The San Francisco case illustrates why simply locating a recorded deed should not necessarily end the inquiry. A recorded document may create the appearance of ownership without resolving whether the document itself is legitimate.
When circumstances are unusual, agents should consider whether additional investigation by the title company or legal counsel is appropriate.
Warning Sign No. 4: The Price Is Too Good to Be True. A multimillion-dollar property being offered dramatically below market value should generate questions. There can certainly be legitimate reasons for a discounted sale. But when the seller is simultaneously demanding cash, a fast closing and minimal investigation, those circumstances deserve additional scrutiny. The investor who reviewed the San Francisco property reportedly became suspicious when the approximately $4.4 million home was being offered for about $2.9 million and the purported sellers wanted to know how quickly a cash closing could occur.
Warning Sign No. 5: Strange Deeds Keep Appearing. Agents should pay attention to unusual title histories. Multiple quitclaim deeds recorded within a short period of time should trigger questions. Why is ownership repeatedly changing? Who are the people executing the deeds? Did money actually change hands? Why would a valuable property repeatedly be transferred by quitclaim deed? Are the signatures consistent? Are the notarizations legitimate? The answers may be perfectly innocent, but the questions still need to be asked.
Probate and Trust Properties Deserve Special Attention.
For Nevada real estate agents, this problem deserves particular attention when working with probate and trust properties. A house may remain vacant for months while a personal representative is appointed; a trustee determines what to do with the property; family members dispute ownership; creditors’ issues are addressed; personal property is removed; or court approval of a sale is obtained.
During that period, the property may appear abandoned even though someone clearly owns it. That creates opportunity for unauthorized occupants. Agents handling probate or trust listings should consider discussing property security with the fiduciary at the beginning of the listing rather than waiting until something happens.
What Can Agents Recommend?
Depending upon the circumstances, simple preventive measures may include: regularly inspecting the property; maintaining landscaping; promptly collecting mail and packages; using exterior lighting; installing security cameras; using monitored alarm systems; ensuring doors and windows are secured; asking neighbors to report unusual activity; monitoring utility usage; periodically checking the property’s public records; and immediately investigating unexplained persons, vehicles or activity at the property. For a valuable vacant property, the cost of preventive measures can be insignificant compared with the cost of removing unauthorized occupants or litigating a fraudulent title claim.
Don’t Confront Suspected Squatters Yourself
If unauthorized people appear to have taken possession of a property, the answer generally is not for the agent to personally confront them or attempt to physically remove them. There may be safety concerns. There may also be legal issues concerning possession and the appropriate procedure for removing occupants. Instead, the owner should promptly contact law enforcement and legal counsel as appropriate to determine what remedies are available.
Don’t Assume Recording Means Ownership
Perhaps the most interesting lesson from the San Francisco case concerns public records. Real estate professionals depend heavily upon recorded documents. That’s appropriate. But a recorder’s office generally accepts documents for recording based upon statutory recording requirements. Recording a document does not necessarily mean that a court has investigated the transaction and determined that the person signing the deed actually had the right to convey the property. Fraudulent documents can therefore create substantial problems before they are eventually discovered and challenged. That is one reason title insurance and careful title examination remain so important.
The Takeaway for Agents
The San Francisco dispute is unusual, but the underlying lesson isn’t. Vacant real estate creates risk. For agents representing absentee owners, estates, trustees and owners of vacant properties, simply putting a lockbox on the door and waiting for a buyer may not be enough. Pay attention to the property. Pay attention to the title. Pay attention when something doesn’t look right. Discovering a squatter is bad. However, discovering that the squatter is also trying to sell the house is considerably worse.
Drizin Law is providing this information for educational purposes only. It should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. This information is based on general principles of Nevada law at the time it was created and you should be aware laws frequently change. Moreover, the laws affecting you may differ depending on the circumstances. You should consult with a qualified attorney in your own state or jurisdiction concerning your particular situation. Review of this information does not create an attorney-client relationship.
Lee A. Drizin, Esq. is the founder of Drizin Law and has practiced in Las Vegas for over three decades. His work focuses on probate, estate planning, trusts, and guardianship, with particular experience handling contested probate and administration matters. A UNLV graduate with a Master of Laws in Taxation from Boston University, Lee has built his career helping Nevada families navigate some of the most difficult times in their lives.
