Good Question - What Can a Commercial Property Owner do About Squatters?
Definition of Squatting:
The legal definition of squatting can vary somewhat from state to state.
Generally speaking, a squatter is a person who illegally occupies another person’s property without permission and doesn’t have a legal right to be there.
Squatting typically involves a person’s physical presence on the property for an extended time period and acting in a capacity of control over the property.
The Problem:
While precise data is lacking, it is believed that as many as 250,000 U.S. commercial property owners have problems with squatters every year.
One source estimates that the average building damage done by a squatter at around $30,000.
With the growth of homeless people in many cities & towns, squatters in tents and crude shelters have become commonplace in vacant lots, alleys and along business owned sidewalks.
Vacant, or otherwise unoccupied buildings are obviously more prone to squatting than occupied properties.
The commercial structures most prone to squatting include vacant offices, factories, warehouses, retail stores and school buildings.
In the Appalachian Region, squatter have been known to occupy natural gas wells pads and old mining sites.
Among the types of damage squatters can inflict on commercial properties include vandalism, arson, stripping of building fixtures and accumulations of trash and human waste.
The Impact of Squatters on Commercial Property Owners:
Owner loss of use during the time the squatter occupies the property.
Lost rental or sales opportunities.
Potential for increased insurance, security & maintenance costs.
The physical damage the squatters can do to the property.
Drop in property values.
Legal costs that usually range from between $1,000 to $10,000.
How to Make a Vacant Commercial Property Less Desirable to Squatters:
Make the building look occupied by keeping the exterior clean & tidy.
Ask adjoining property owners to report any suspicious activity.
Take periodic photos of the property that are date/time stamped.
Post “No Trespassing” signs along the perimeter & the building entrances.
Shutoff nonessential utilities if local building ordinances allow.
Have motion sensors installed with off-premises electronic notifications.
Install exterior lighting near all exterior entrances.
Install physical barriers such as plywood on exterior doors & windows.
Remove items that a squatter could use such as furniture & appliances.
Remove materials that could be used as bedding such as cardboard boxes.
Have someone regularly inspect the property for signs of trespassing.
Warnings About Dealing with Squatters:
Avoid direct confrontations with squatters as they can be under the influence of illegal drugs, have mental health issues or have prior criminal records.
In most states, squatting is considered a civil matter between the property owner and the squatter and therefore must be pursued through the appropriate court system.
Squatters have been known to sue property owners, often citing illegal eviction or excessive use of force.
Squatters have also been known to sue property owners for bodily injuries they received while being on the property.
In the majority of states, specific conditions must be met before criminal trespassing charges can be pursued.
The 1st Step in Evicting a Squatter:
Obtain the services of a local attorney with real estate law experience who can guide the property owner through the eviction process.
Cost Variables in Trying to Evict Squatters:
How long the property has been vacant.
How long the squatter has been on the property.
If the owner is going to pursue property damage claims against the squatter.
Whether the squatter contests the eviction.
Whether local laws & courts are supportive of property owner eviction rights.
The fact that civil courts can be backlogged for months at a time.
If law enforcement is willing to enforce the eviction notice.
Squatters & Adverse Possession:
Adverse possession with property is a legal principle whereby squatters can take ownership of a given piece of land and its surface structures by actually occupying it for a period of time specified under state law.
Depending on the state, adverse possession laws of occupancy can range from 5 to 30-years.
The squatter must openly occupy the property so that the owner was or should be have been aware of the alleged trespassing.
The squatting must be continuous during the state’s required time period for adverse possession.
In some states squatters must pay property taxes to qualify under adverse possession.
Squatting and Property Insurance:
In most instances, commercial property insurance carriers will limit coverage and claims amounts when a property has been vacant over a specified time period.
Simply put, commercial property insurance carriers do not usually see squatting as an insurable event but more as a property management issue.
The damage done by squatters can fail to meet the standard property claims definition as a “sudden & accidental event”.
The physical property damage caused by squatters maybe covered under commercial insurance subject to the types of damages and time limitations.
In some areas, a squatters endorsement can be added to the property insurance squatter to cover eviction costs, damages and lost rental income.
Conclusions:
As a general rule, the longer a squatter resides on a property, the harder it will be to evict them.
Since evicting a squatter can be a lengthy & expensive process, pre-squatter public access control measures such as security fences, secured doors & windows and intrusion devices can be a good investment.
Local issues with squatters can often be attributed to the failure of municipal governments to effectively deal with its homeless population.
About the Author:
Rob Brooks is the Loss Control Manager for Centurion Insurance Services in Charleston, West Virginia. He has over 40-years experience in his profession having worked for some of the leading insurance carriers and brokers. Rob has professional certifications in both human resource management (CHRS) and workers compensation (CWCP) from Michigan State University’s School of Human Resources & Labor Relations.
Disclaimer:
This publication is intended for general educational purposes only, and not to be considered as business, financial or legal advice.
Centurion Insurance Services and the writer makes no guarantees or warranties of any kind, express or implied, about the reliability, completeness or suitability of the information contained herein.
Readers should consult with appropriate professionals before making any decisions based on the content of this newsletter.
We will not be liable for any losses or damages arising from the use of the information provided.
