Stripping Assests in the “New Economy”

Last week, I went to show a lovely home I have listed for sale as a short sale. (As those of you who read my blog regularly know, I deal a lot with short sale properties here in Los Angeles.) One of the best features of the home is a beautiful modern and updated kitchen with all the bells and whistles, including high end stainless appliances, wine cooler, granite counters, etc. When the time came for the appointment, it became apparent that, between Saturday and Monday, the house had been stripped of all appliances, the pedestal sinks, built in flat screen and speakers, etc. This was yet another blow to a homeowner who has lost his livelihood, his home, and now has had his property violated during a short sale.

In an economy where every penny counts, there are often new ways for homeowners, and scam artists, to make a buck. One of the new ways has become stripping assets from vacant properties, either pre or post foreclosure, or pre- short sale.

Personal property is that which is not real estate. However, fixtures are real estate because they are appurtenances, affixed to the land or to the house, which means fixtures stay with the house.
But that doesn’t stop some desperate home owners from smashing walls to rip out Romex wiring or copper pipes and selling them for scrap in back alleys. Some misguided home owners, angry at the bank for foreclosing, think it’s somehow permissible to strip every salvageable component from the home. Crews of scam artists look for vacant homes to pilfer of their appliances, cabinets, flat screens, pedestal sinks, etc.

They don’t stop to think about the consequences for the homeowner who is already fighting to stay afloat and do the right thing, or for the next set of home buyers who have pinched, saved and worked hard to qualify to buy a home priced at the bottom of the market, in “as is” condition, from a lender who couldn’t sell it on the county courthouse steps because the home was trashed by its previous occupants.

Assets Home Owners Cannot Remove from Homes

I look at many homes during a short sale or after a foreclosure and cringe at what I might find inside when I put the key into the lock, providing, of course, there is a lock or even a door. Often homes have had the front door boarded up because the door has been removed, or all hardware has been stripped.

The following items are assets, fixtures that should not be removed from a home that is in short sale or foreclosure:

• Cabinets and counter tops
• Built in appliances such as stoves, built-in microwaves, dishwashers, etc.
• Furnaces and air conditioning units
• Plumbing and copper pipes
• Romex or other electrical wiring
• Light fixtures and ceiling fans
• Doors, locks and hardware
• Flooring, ceilings and walls
• Windows and vents
• Window coverings that are attached, such as plantation shutters
• Medicine cabinets, sinks, tubs, toilets and showers
• Sink drains and faucets
• Built-in shelving / bookcases
• Landscaping, outdoor potted plants, fencing, built-in pools and spas

Assets Home Owners Can Remove from Homes

Here are items a home owner can remove without fearing prosecution:

• All personal items brought into the home by the owner such as furniture, clothing and common household items such as dishes, pans and silverware
• Mirrors that are not attached to the wall (freely hung)
• Personal artwork and photographs from walls
• Free-standing lamps
• Pet-related items such as dog houses, aquariums, bird cages
• Easily removable window coverings such as drapes or curtains
• Non- built in refrigerators, washer/ dryers, televisions, computers and stereo equipment
• Throw and area rugs
• Indoor plants
• Portable fans and heaters

Vandalism of Homes in Foreclosure

Vandalism is against the law. It’s considered vandalism to spray paint the walls or windows with graphic images or tagging, or for windows be broken or removed. Some previous occupants have deposited feces on counter tops or in the middle of the living room floor. Sometimes home owners turn on all the water faucets and plug up the drains before departing.

People who vandalize a home they are losing through foreclosure are not harming the bank by their illegal actions. They are harming innocent home buyers who, just like they once were, are hoping to achieve the American dream of home ownership. In short, owners who trash their homes are hurting themselves.

What Happens to Sellers Who Strip Their Homes?

According to a representative from LAPD, it’s the home owner’s insurance companies that are most likely to pursue and prosecute sellers who vandalize or strip their homes while in foreclosure. When the bank receives title to the home through foreclosure proceedings, many banks submit an insurance claim to the existing insurance company to cover damage and missing real property items.

Insurance companies then actively go after the sellers because the company has faced a loss due to the seller’s intentional behavior. Insurance companies are relentless, committed to collection and will prosecute to the fullest extent of the law.