What's the Worst That Could Happen When Leaving a House Vacant?

Planning to leave your home to spend a few months or more elsewhere? Without careful planning before you depart, you could be in for nasty surprises upon your return. This article describes how to avoid some of the most dire possibilities, including:

• getting behind on your mortgage and facing the consequences
• getting behind on other bills, and dealing with liens and penalties
• having your HOA put a lien on your property, and
• having burglars or squatters target your property.

Behind on Your Mortgage? Your Lender Might Lock You Out

Vacant homes are targets for theft and vandalism. Therefore, when a homeowner's mortgage payments become delinquent, one of the first things many lenders do to protect their interest in the property is to look into whether the owner has abandoned it. Typically, a lender will hire an outside company (known as a field service company) to inspect the property. Some field service companies jump the gun, and declare a home is abandoned without having first performed proper diligence. (Various are laws might prohibit this, but the field service companies don't always follow these.)

In some cases, the company makes the determination of abandonment after just one visit, perhaps based on seeing an overgrown lawn and old newspapers and pizza flyers on the front porch; yet having made no effort to contact the homeowner. (For further information on this, see The Bank Changed My Door Locks But My Home Is Still in Foreclosure. What Should I Do?)

To secure the seemingly abandoned property for the lender, the field company might go so far as to change the locks and remove your personal belongings. Upon returning, you'd find you cannot get into your own home. You would then need to negotiate with the lender, the sheriff's office, or even the courts to regain possession. Retrieving any personal items that were taken away during your absence might prove difficult.

With proper preparation, however, you can avoid such problems. Ensure your mortgage payments are up to date before leaving, and that they remain current while you're away, perhaps with automatic online payments. If you cannot catch up on your payments before leaving, or you become overdue at any time while away, notify the lender by phone of your plans to return. Keep a written record of all calls you make to the lender. Also send the lender a written notice (by certified mail, or another means where a return receipt is provided), informing it that, despite your time away, you are still living in the property. Inform the lender where you can be contacted.

If possible, also tell a trusted neighbor about your intended return date and give your contact information, in case a field service company asks neighbors about your home.

Fines, Liens, and Credit Problems Arising From Unpaid Bills

A number of bills must be paid even when your property is vacant. If you are or become delinquent on your property taxes, the government will probably assess late fees and fines. If the delinquency remains outstanding, the government might place a lien on your home.

A number of problems can also result from unpaid utility bills. For example, the service provider might cut off your heat, resulting in frozen pipes, expensive damage, water leaks, and high water bills. Or, your phone or water service might get turned off, requiring you to pay all past bills plus a steep reconnection fee upon your return.

Allowing bills to remain delinquent can negatively affect your credit rating. You might return from your vacation to find you need to spend a large amount of time and money eliminating liens and rectifying bad credit.

These problems can be avoided with a little preparation. Double check that you are current on all utilities and tax bills prior to leaving. Then arrange to either prepay upcoming bills, have them forwarded to you while you're away, or sign up for automatic electronic payments before you leave.

Your HOA Might Put a Lien on Your Property

If your home is in a planned community, you are responsible for keeping current with all dues and fees owing to the homeowners' association (HOA). An HOA typically has the right to assess late fees, place a lien on an owner's property for delinquent amounts, and perhaps prevent delinquent owners from using any common areas in the development until current on all payments. You could possibly even return home to find you can't access your home, if you must pass through a common entrance gate.

To avoid such problems, make sure all to pay all outstanding dues and fees before departing, and stay current during your absence. Talk with an HOA representative before you leave to find out the amount you'll owe, including any special assessments that might be in the pipeline.

Planned developments typically also have a number of rules that homeowners must abide by. For example, regulations against leaving trash in yards are quite common, or restrictions on leaving a car sitting in one place too long. Most HOAs have the power to assess fines for any rule violations, often as a per-day amount (such as $50 per day for each day trash remains in the yard). That could add up to a tidy sum if you are away and in violation for an extended period. The HOA might also have the right to put a lien on your home for outstanding fines arising from violations.

To avoid such problems, review the restrictions in your development's governing documents, and ask the HOA whether there are any rules you should be aware of before you depart. Then follow up. If, for example, trash on the property is prohibited, hire a person, or a management company, to remove litter or junk mail a few times a week. If you can't leave your car parked outside, find someplace to store it.

Your Homeowners' Insurance Might Not Cover Your Vacant Home

Many homeowners are unaware that, under most standard homeowners' insurance policies, theft, damage, or other problems occurring after a home has been vacant for an extended period of time (typically around 30 days) are not covered. Homeowners' insurance policies commonly exclude such coverage, due to the greater risk of theft or damage to a home that no one is living in and thus watching over. If you attempt to make a claim for losses that occurred while you were away, you might be denied under such an exclusion, or even be liable for insurance fraud.

Review your policy and talk with your insurance agent. If necessary, you might purchase an endorsement to your policy to provide coverage for your home while it's vacant. If such an endorsement is not available, consider purchasing a separate, "vacant home" insurance policy. These are typically quite affordable, and offered for specific terms such as 30 days, six months, or a year.

Be open and honest with your insurance company prior to your departure. This can save you a great deal of hassle and expense in the event of a break-in or other damage to your home while you're gone.

Vacant homes sometimes attract "squatters;" people who move in uninvited, perhaps pretending to be new owners or renters. This tends to occur most often in neighborhoods where the neighbors don't really know each other, or in more remote areas where there are no neighbors. Even if squatters don't move in, thieves and vandals might be an issue.

Again, prior preparation can protect you. Make sure your home is locked tight, including all windows and exterior (and attached garage) doors. Activate the home's security system or consider installing one. If you use a security company, inform it of your dates of absence. Use motion sensor exterior lights.

Also try to make the home look lived in while you're away. For example, have a neighbor or maintenance service mow the lawn or shovel the snow as needed. Contact the post office to have your mail forwarded (or put on hold) and suspend any newspaper deliveries. Ask someone to check on the place regularly and deal with such issues as a broken branch blocking the front walk or flyers hanging from the door handle.

Prior preparation can prevent you from returning to find your valuables missing, graffiti on your walls, or even someone else living in your home! It's well worth a bit of planning, to help ensure you have a relaxed, worry-free trip.