Guide to Acquiring Vacant Properties Through Liens

 Guide to Acquiring Vacant Properties Through Liens

Disclaimer
This e-book provides information on acquiring vacant or abandoned properties by foreclosing on a lien. While we strive for accuracy, errors in content or typography may occur. Use this guide as an educational resource, not a definitive legal authority. The author and publisher are not liable for any loss or damage caused by this e-book. Always seek professional legal advice.
Proverbs 3:5-6: “Trust in the Lord with all your heart and lean not on your own understanding; in all your ways acknowledge Him, and He will make your paths straight.”
OverviewThis guide explains a method to acquire vacant or abandoned properties (including “bank-owned” homes) by creating a lien and foreclosing in small claims court. Unlike traditional mortgage foreclosures, which involve banks and higher courts, this process is quicker (6–8 weeks), requires no attorney, and avoids bank opposition. By filing a lien based on services performed (e.g., lawn maintenance), you can foreclose in small claims court to claim the property’s Warranty Deed or real property.
Key Concepts
  • Real vs. Personal Property:
    • Real Property: Land and permanent structures (e.g., houses).
    • Personal Property: Movable or intangible items, like a Warranty Deed.
    • Note: A Warranty Deed is personal property, but it conveys rights to real property.
  • Security Agreement: A contract establishing your lien right, with the Warranty Deed or real property as collateral.
  • Foreclosure: The process of claiming collateral (e.g., the property) by foreclosing on your lien in small claims court.
  • Tacit Acquiescence: If the property owner doesn’t respond to your notices, their silence is considered consent to your contract.
Step-by-Step Process
  1. Find a Vacant Property:
    • Identify a vacant or abandoned house (e.g., unmaintained, no signs of occupancy).
    • Avoid properties under active contracts or managed by real estate agents.
    • Visit the County Recorder’s Office to find the Warranty Deed and note the Grantee (last known owner).
  2. Create a Security Agreement:
    • Draft a Notice of Intent (see sample in original Figure 2) to offer services (e.g., lawn care, window repairs) to the Grantee.
    • State that non-payment allows you to place a lien on the Warranty Deed or real property.
    • Send the Notice of Intent via USPS first-class mail to the owner’s last known address (usually the property address) and post it on the property’s door.
    • Wait 2 weeks for a response. No response confirms the property’s abandonment and establishes your contract via tacit acquiescence.
  3. Perform Services and Send an Invoice:
    • Complete the services outlined in the Notice of Intent (e.g., mow the lawn, fix windows).
    • Send an invoice to the Grantee for a modest amount ($150–$500) to avoid scrutiny, specifying payment due in 2 weeks.
    • Keep detailed records of work performed.
  4. File a Lien:
    • File a lien at the County Recorder’s Office against the Warranty Deed (personal property) or real property (legal description), depending on your county’s rules (see below).
    • Use the sample lien format (original Figure 3), ensuring it lists the collateral clearly.
    • Choosing Collateral:
      • If your county requires real property foreclosures in Superior Court, use the Warranty Deed as collateral to stay in small claims court.
      • If claims under a certain amount (e.g., $10,000) can be filed in small claims court, confirm with the court clerk: “I have a $1,000 lien against real property. Can I foreclose in small claims court?”
      • Update (June 2012): Filing against real property (legal description) often yields better results.
  5. Foreclose in Small Claims Court:
    • File an affidavit to foreclose your lien (see original Figure 4). Use court-provided forms if available, or adapt the provided template.
    • Serve the Grantee with a summons (see original Figure 5) via the sheriff or substituted service (e.g., mailing and posting).
    • If the Grantee doesn’t respond (typically 7–30 days, check your state’s rules), file for a Writ of Possession (see original Figure 6).
    • Pay the sheriff (~$100) to execute the writ, delivering the property to you.
  6. Take Possession:
    • The court’s foreclosure order grants you possession. The sheriff’s execution of the writ provides documentation and access to the property.
Tips for Success
  • Research County Rules: Confirm whether your county allows lien foreclosures in small claims court based on claim amount or collateral type.
  • Use Certified Mail: File documents via USPS certified or registered mail to avoid potential clerk denials, which may violate due process.
  • Keep Claims Small: A lien of $150–$500 is less likely to attract bank or attorney challenges, as defending a small claim costs more (e.g., $5,000 in legal fees).
  • Avoid Banks: This process targets the Warranty Deed or real property, not a Mortgage Deed, so banks have no standing to challenge unless they respond to your notices.
  • Handle Resistance: If a clerk refuses to file your lien, email coaching@thctrust.org for guidance on enforcing your rights.
Why This Works
  • Small Claims Advantage: Banks rarely contest small claims due to high legal costs, and the process is fast (6–8 weeks).
  • Abandoned Properties: Non-response from the owner (Grantee) confirms abandonment, strengthening your claim.
  • Bypassing Corruption: Unlike traditional foreclosures, which face bank opposition and judicial bias, this method leverages small claims court’s simplicity.
Definitions
  • Collateral: Property (real or personal) tied to a lien or Security Agreement.
  • Foreclosure: Claiming collateral by enforcing a lien.
  • Legal Description: A precise description of real property (e.g., metes and bounds).
  • Mortgage Deed: A deed securing a debt with real property as collateral.
  • Personal Property: Movable or intangible items, like a Warranty Deed.
  • Real Property: Land and permanent structures (e.g., houses).
  • Security Agreement: A contract granting a lien right over collateral.
  • Tacit Acquiescence: Consent implied by silence or non-response.
Final Notes
  • Research your state’s lien and foreclosure laws, as court processes vary.
  • Use provided templates (Figures 4–6) or court forms, adjusting for local requirements.
  • If unclear, reread this guide and study the definitions. For questions, email creditorsincommerce@proton.me
  • Act confidently but cautiously, as this process may face legal challenges.
Changes Made
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