John lives in his parents $35,000 CA home.  The home has a past due amount of $20,000.  John can't pay this, so the bank tried to sell the home in auction and no one bought it.  John decided to build a HUT on his parents LOT, which is paid off, and next door to the unpaid house.  John thinks if the bank makes the house an REO, and he can't get in there, he can live in the hut with no electricity or water hookup on the paid off lot next door to the house....John will tell people he doesn't really live there but just visits the lot to do some art painting there.
.....HIS PARENTS who own the house and lot, live in Texas and are on their deathbeds....and won't put these two properties in John's name.
.................None of the other children or relatives want any involvement in this matter.........
MY QUESTION IS THISL  Can John legally live in the REO home and also on the lot next door and have homestead rights and be fine for the rest of his life.........??  
...I called ZONING and they say the neighborhood ONLY allows mobile homes that are no more than ten years old to be on that land and NO one can live on an empty lot with NO plumbing or electricity....
......................but he HOMESTEAD LAW says people CAN do this as long as NO one is claiming the property, you can live there with no lights and water.....and all is well and good..

Hey Angela,

First I have to say that being a landlord it sucks to have to deal with squatters.

As far as John living in the REO home, he can live there until they bank decides to evict him and do something with the property. As far as the bank s concerned, if someone is living there, it helps to maintain the asset until they determine what or when they want to deal with it. The owner is the only one who has the right to evict him unless he is doing something illegal.

As far as living on the lot next door. There is nothing illegal about living on your own land or a family members land. Zoning however has rights to evict or remove people that are not living up to the zoning ordinances such as water, sewer, electricity etc. The biggest problem is the sewer and trash issue or not up keeping the property. John or the property owner can get fined for this. If there are a lot of fines for this then the city can force foreclosure on the lot that is paid for to pay for the fines. Which would mean that John or relatives would not own it anymore.

I hope this helps. California being as liberal as it is, is the hardest state to be a landlord in. The law is on the side of the tenant.



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Brian Pitcher


I can answer all questions in regards to short sales, strategic default, foreclosures, loan modifications, and most questions regarding real estate law.


I have closed well over 100 short sales in the past 3 years and that is the work we primarily do. We teach people how to keep their home if they can or how to bail on it in the best possible way without any recourse. I have taught many public seminars to accountants, loan mod counselors, attorney's and also many other real estate agents all over the country. I also know how to deal with the very tough second mortgages in the negotiations as well as mechanic liens and default judgements.

I have a bachelors in Spanish with a minor in Economics from the University of Utah. I have also been a Realtor for 8 years closing well over 200 transactions. I am a KW instructor for Short Sales and Foreclosures.

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