Zombie properties are damaging Illinois’ and the country’s real estate market. Just like the aimless, mindless zombies of movies and TV, which lurk in public view, broken down and falling apart, so too do zombie properties dot the national landscape, driving down property values.
What is a Zombie Property?
A zombie foreclosure, or zombie property, is property that has been abandoned by the owner either voluntarily or by lender foreclosure, and as a result, is unkempt and falls into disrepair. Zombie properties usually occur when the owner has abandoned the property, but it is not yet owned by the bank. This can happen when owners leave property while a foreclosure action is pending, and the foreclosure drags on for years. It can also occur after a foreclosure judgment is entered, but the house has not gone to foreclosure sale yet.
In other words, the property is in a state of limbo, where the bank does not have title to it, and thus, won’t pay to maintain it or fix it (much less market it for sale to a new owner) and the owner, whose name the property is in, has left, and doesn’t care or have the financial ability or motivation to clean up and repair it. When foreclosure cases drone on for years, a property otherwise in decent condition can quickly become an eyesore. Overgrown grass, broken windows, caved in roofs, mold and algae-infested pools and wildlife or insect infestation are all common with zombie properties.
Effects on Owners and Neighbors
Owners of zombie properties are very much at financial risk. Because the property remains in their name, the fines from the city or homeowners association (or any other body with the power to impose fines for code violations) rack up very quickly. Owners who think they’ve left the problem behind them by leaving the property quickly find they’ve got a larger financial headache than they began with.
For neighbors and neighborhoods, the zombie property can lower property values. Someone looking to sell their property living across from a broken down, overgrown and infested property may quickly find that the value of their house is nowhere near what they thought it would be.
And when the zombie property eventually is titled in the bank’s name, the problems don’t end there. Most banks, after taking title to property in such bad condition, won’t put the money into fixing it. Instead, the property will sell as distressed, or as a “handyman special,” selling at a very reduced price, thus lowering the value of all the houses in the neighborhood.
RealtyTrac, a company that tracks foreclosure statistics, recently found that 1 in 5 properties were zombies, although the number is higher in states such as Florida or New Jersey, which have higher foreclosure rates.
Contact an Attorney for Help
If you’re in foreclosure or have a question about real estate, be careful about simply abandoning the property to avoid it from becoming a zombie. Contact The Slater Firm LTD to discuss your rights and how to best protect yourself if you have a landlord-tenant or any real estate-related question or problem.