From nytimes.com:
Save Florida Homes Inc. and its owner, Mark Guerette, have found foreclosed homes for several needy families here in Broward County, and his tenants could not be more pleased. Fabian Ferguson, his wife and two children now live a two-bedroom home they have transformed from damaged and abandoned to full and cozy.
There is just one problem: Mr. Guerette is not the owner. Yet.
In a sign of the odd ingenuity that has grown from the real estate collapse, he is banking on an 1869 Florida statute that says the bundle of properties he has seized will be his if the owners do not claim them within seven years. A version of the same law was used in the 1850s to claim possession of runaway slaves, though Mr. Guerette, 47, a clean-cut mortgage broker, sees his efforts as heroic. “There are all these properties out there that could be used for good,” he said.
The North Lauderdale authorities, though, see him as a crook. He is scheduled to go on trial in December on fraud charges in a case that, along with a handful of others in Florida and in other states, could determine whether maintaining a property and paying taxes on it is enough to lead to ownership.
Legal scholars say the concept is old — rooted in Renaissance England, when agricultural land would sometimes go fallow, left untended by long-lost heirs. But it is also common. All 50 states allow for so-called adverse possession, with the time to forge a kind of common-law marriage with property varying from a few years (in most states) to several decades (in New Jersey).
The statute generally requires that properties be maintained openly and continuously, which usually means paying property taxes and utility bills.
Mr. Guerette, who now faces up to 15 years in prison, insists that his business is legitimate and moral. He said he got started last year, driving around working-class neighborhoods in Palm Beach and Broward Counties, looking for a particular kind of home: not just those with overgrown lawns and broken windows, but houses with a large orange sticker from the county reading “public nuisance.”
The stickers signaled owners out of touch: the county or city was unable to reach them.
Mr. Guerette filed court claims on around 100 of these properties, which appear to be in the process of foreclosure. Then he chose 20 that could be most easily renovated and sent letters to the owners and their banks — presumably overwhelmed — to make them aware of his plans.
Florida does not require notification. One state lawmaker tried and failed to close that loophole last year with a bill that never passed. But it hardly mattered. Nineteen of the owners and their banks did not respond, Mr. Guerette said.
So he set about fixing up the unclaimed properties. In some cases, he just mowed the lawn and replaced stolen air conditioners or broken windows; in other cases, like with Mr. Ferguson, he let tenants make improvements in lieu of rent. At his peak last year, he said he managed 17 homes with renters, some of whom he found on Craigslist, others through a Christian ministry in Margate, Fla.
Copies of leases show Mr. Guerette included an addendum noting that he was not the legal owner. Tenants like Mr. Ferguson and his family, who had been homeless before moving in last year and paying $289 a month, see Mr. Guerette as a savior.
And neighbors generally agree. “There is no telling who was in and out of that house,” said Rawle Thomas, who lives next door to Mr. Ferguson and his family. “I like them, and I’d much rather have someone in there than the house empty.” <!–156f81810d104f078398d79f126f28ff–>
And the entertainment continues!
He is (in my opinionated reading of the situation) sponsoring squatters and charging them a fee (rent). I actually admire his initiative in targeting the public nuisance properties. However, 19 properties time 290 a month rent is serious cash and what really is he going to accomplish?
He says to himself “aha! I make almost 6 grand a month in ‘rent’ AND I make a fool of stupid owners AND I throw a lifeline to some really needy people AND maybe I make a difference!”
But my jaded eyes don’t see past the 6 large monthly revenue. Even if the owners are stupid public nuisances, unless there is a law that they are breaking, they have the legal right to be stupid and Guerette has NO legal right to collect fees on their property.
Interesting times, Interesting times!
If the state law provides for “adverse possession,” he notified the owners of record of his intent (which, according to the article, he wasn’t even required to do under the state’s laws), they didn’t answer and his tenants are receiving full disclosure that he’s not the legal owner, I can see how this could end up in a civil court to decide the validity of his court claims, but what is the basis for the fraud charge?
Seems to me that what the state really ought to be doing is changing its laws to give owners of orange-tagged “public nuisance” properties a deadline to fix ’em up and then open them to the first comer who agrees to rehabilitate and occupy them.
They should simply cancel this law. Are we still living in the dark ages where abandoned property would go unnoticed for decades? Wow.
I think where he will probably get into legal trouble is that he’s profiting from usage of property that’s not his, which is illegal irrespective of adverse possession laws. As opposed to actually occupying these properties themselves. Bottom line, one law doesn’t allow you to break another.
Fraud is always harder to prove since he will claim ignorance, but he’s misrepresenting the legality of renting out someone else’s property. Adverse possession laws do not trump any other laws.
Under traditional adverse possession, the desseiser is supposed to use and assume responsibility for the property as if is was his own. Whether this includes renting it out as well as living on it or farming it, and who should be entitled to any revenues the property generates should the owners of record come forward to reassert their ownership sound like more questions for a civil court than a basis for criminal charges.
Actually the owners could trump this guy by saying pay us instead, since then they would be asserting their ownership and the Guerette would just be out the money he spent. Now if the banks are so stupid as to not respond then they get what they deserve just like anyone who does not pay attention to their property does.
MarkB,
My impression was he put up the cash for the fixer up part of the deal, so he has to make that back to break even, hence the “renters” who could use sweat equity to avoid paying him anything. If he brings even 1-2 properties online a month, 6k is not going to go very far. Just sayin’.
I’m with GeneK, isn’t this guys’ operation symptomatic that the muni is not playing its role in protecting the public and raising community standards?
Hey Jim, when you going on vacaction for a couple of weeks, I like your house.
I can’t find anything he’s doing wrong here — and that’s as a libertarian who takes property rights VERY seriously.
It seems the state has pretty simple laws explaining that if property is truly abandoned, it’s possible to basically “homestead” it and assume ownership should the original owners not attempt to claim it — and seven years is PLENTY of time.
Potentially there could be a B&E / grand larceny charge, but I don’t see any but the most headline-seeking prosecutors being willing to press charges here, and unless Guerrette or the tenants are unwilling to vacate should the owners claim the property back, I can’t see a jury being willing to acquit.
I do see a potential for a civil suit where the owners attempt to recover rental income from their property if they reclaim, but that’s about the only likely negative I can come up with for anyone in this story…
In California at least, “rent skimming” is considered a crime.
California Civil Code 890(a)(2): For purposes of this section, “rent skimming” also means receiving revenue from the rental of a parcel of residential real property where the person receiving that revenue, without the consent of the owner or owner’s agent, asserted possession or ownership of the residential property, whether under a false claim of title, by trespass, or any other unauthorized means, rented the property to another, and collected rents from the other person for the rental of the property. This paragraph does not apply to any tenant, subtenant, lessee, sublessee, or assignee, nor to any other hirer having a lawful occupancy interest in the residential dwelling.
Further someone should tell the renters to stop paying rent, and when Guerette goes to evict he will be laughed out of court when the renter says prove you own it. You have to own the property to be able to evict someone, so the renter has 7 years at a minimum, or until the real owner goes to evict him.
When I took a real estate based class in Cali. the instructor spoke of the California law which stated the “squatter” needed to pay the property taxes for 7 years and occupancy. His comment was that the owner should let them stay and pay for 6 years and then beat them to the punch on the 7th year… Risky behavior for sure…
That behavior would be beyond risky since California’s statute for adverse possession is 5 years, not 7.
Somewhat similarly, Clairemont residents accuse city of trying to seize property:
http://www.signonsandiego.com/news/2010/nov/10/residents-san-diego-over-line-property-dispute/
“Actually the owners could trump this guy by saying pay us instead, since then they would be asserting their ownership and the Guerette would just be out the money he spent.”
I think this is the risk inherent to anyone who chooses to try to acquire property through adverse possession.
I’d be willing to bet there’s some provision in most adverse possession laws that excludes publicly owned land for which there are no taxes for the desseiser to assume payments of.
Seems to me the question of whether this situation constitutes “asserting possession or ownership of the residential property under a false claim of title, by trespass, or any other unauthorized means” depends on whether Guerette has complied with the requirements and process of the state’s adverse possession law. Again, it seems more like a question for a civil rather than a criminal proceeding.
I think Lyle has the best answer here.
Adverse Possession, by the way does hold a useful purpose. In most modern cases, it is things like a fence is in the wrong spot and the property assessors make it part of the plot in surveys. Similarly, in weird cases (usually family related), where someone takes over living in a house and takes up the upkeep and payments they can get the property. (Some state require the possession to be “hostile”, meaning that if I say “you can live in the house as long as you pay the expenses” and you do, then it isn’t necessarily adverse.
Using it offensively, like this guy is doing, isn’t really the intent, but it could work if you don’t get arrested first. Note that traditional squatters usually don’t qualify under modern rules, since their idea is to take the property without any payment at all.