As a legal term, abandonment defines a deliberate renunciation of rights to an asset or a business relationship.
What does abandonment mean in real estate?
In real estate, abandonment, also known as dereliction, can refer to various things. The concept of abandonment means that an owner or lessee voluntarily relinquishes or surrenders their property right.
Still, there’s a catch. The owner in question cannot abandon their property in favor of someone else, namely a successor as proprietor or tenant. Once a court declares a property and its various adherent assets and valuables abandoned, the former owner can’t determine the new proprietor. After all, they have waived their rights in this discussion. Often, the abandoned real estate will be sold as it is.
What does it take to declare property abandoned?
A vacant lot or inactive real estate doesn’t necessarily qualify a property relinquished. Generally, it takes an overt act to prove dereliction without a doubt. And only a court can declare a property abandoned!
First and foremost, they can establish abandonment as a fact if the owner fails to pay mortgages for the land and settle taxes for a long time. An individual or financial entity cannot claim a supposedly and recently abandoned property because the former owner fails to produce the goods the land was supposed to generate. Nor can they demand ownership based on the absence of its previous owner.
Although a prolonged absence can’t be considered a primary and conclusive argument, it helps illustrate the owner’s lack of interest in the land for sure. The principle of the passage of time constitutes the prominent allegation judges consider and accept regarding property abandonment. Additionally, the former owner must verbally declare their concrete intentions to abandon the property on the one hand. On the other hand, the proprietor’s actions must undoubtedly point to abandonment by leaving the asset unattended and exposed to access to any unauthorized agents. The dereliction frequently results in the relinquished property being sold as it is.
Who gets the abandoned real estate?
The abandoned property can typically return to an individual who held a prior interest. In other cases, it can revert to the state when there is no apparent owner. We know this scenario as escheat.
Abandonment vs. surrender
Opposite to popular real estate misconceptions, abandonment doesn’t absolve accountability and obligations connected to a lease or proprietorship. There is but one exception, known as a surrender. The financial entity to which a debt is owed accepts the dereliction, relieving financial obligations.
Example for property abandonment
Bob is the legal owner of a heavily battered and decaying apartment in the outskirts. Besides his blatant carelessness to his property, he’s one year and a half beyond his costs. Bob has to pay delinquent property taxes plus a two percent penalty for failing to deliver every month. Moreover, he expects to be charged a bonus twenty percent collection fee. Now, what does Bob decide? Instead of paying all the back taxes, he puts up his hands. He abandons the apartment and disclaims his ownership.
Also, consider the following scenario an instance of abandonment. A tenant renounces their rent before a fixed-term lease expires. As a result, they will lose their deposit and pre-paid rent for the final month. Secondly, they move out without informing the landlord and giving him proper notice.
Buying abandoned real estate.
Make no mistake; you’ll find deserted houses in genuinely dreadful conditions, typically in run-down areas or neighborhoods with a bad reputation. However, they have an enticing purchase price. For this reason, abandoned homes can be an excellent investment opportunity. You can use them as vacation homes or rent them out and secure a fixed monthly income. Abandoned properties are sold as-is.
Timing is essential with short sale listings. Here’s a tip! Lending institutions can foreclose on court-ordered abandoned real estate. Before concluding a foreclosure process, banks can list abandoned properties as a short sale. Then, many investors will jump at the chance to buy the house.
Suppose you’re interested in acquiring an abandoned property. In that case, contact local real estate agents. Feel free to use our Agent Directory! It’s filled with trustworthy agents that will not abandon your case and lend you a helping hand indeed.
Real Estate tips:
Don’t abandon us! There’s still plenty of land for you to cover in our Glossary Terms.
And feel free to use our Agent Directory! It’s filled with trustworthy agents that will not abandon your case.
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