What Happens When A House Or Other Property Is Condemned
(With Case Study)
There was once a motel in Texas:
This motel wasn’t in the greatest of conditions, but it was operating with some income and a consistent flow of weekly stays.
And then the owners sold the motel…
…Using seller financing.
This means that the seller was taking payments from the buyer instead of requiring a full payment from him via a bank loan or something similar.
They didn’t double check to make sure that the new owner got proper permits when beginning his remodel.
The new owner decided to take the remodeling in his owns hands and work on it himself.
And then an inspector came in, realized there were no permits and nothing was being done to code, and immediately shut it down.
What can you do with a property that is inoperable, has code violations, and the seller has defaulted and vanished?
Several months go by, and by the time that we got in contact with the owners, the property was in shambles, as well as the title.
After months of negotiation and talking to the city, we come to find out that the motel is condemned and scheduled for demolition…
…And they were completely uninterested in letting the owners fix the property or let anyone else take it.
Turns out, the property was near one of the city’s major projects, and they were more interested in making it part of their plan to make their city attractive.
Removing a major eyesore was a blessing to them.
Unfortunately for the owners, they likely got stuck with a bill for demolition and get nothing for their property or land.
They simply waited way too long to try and do something with it.
What qualifies a home to be condemned?
Condemned houses are properties that the government has deemed as unsafe or uninhabitable in some way.
This means that no one is allowed to live or use the property because it’s deemed as unsafe conditions.
Let me repeat that again:
You can not live in a condemned house.
The government may even shut off utility services to the property to make sure it’s uninhabited.
The most common scenario is this:
A property is usually condemned by a government entity because it fails to meet certain code regulations.
In many cases this will happen while the property is being remodeled, and violations may occur if an inspector finds:
The owner/crew did not apply for and receive permits for construction, and/or it wasn’t posted publicly
The property is remodeling in unsafe conditions and is shut down and/or fined
The work done from the remodel was not up to code and failed inspection
The building was vacant and boarded up for 60 days or more (this timeline may vary)
Once a property is condemned, there’s generally some guidelines that need to be followed so that the house or commercial space can be used again or continue to have work done to it.
The owner and any tenants will be notified about the condemnation, and a sign will be posted publicly on the front of the building.
A property can be condemned for other reasons as well, such as if streets need to be expanded or some other public space needs to be built.
In these cases, the government can actually seize a property without any violations, but they will compensate the owners for its market value when it’s involved in an eminent domain.
So, what does condemnation mean for me as the owner?
Well, basically the government takes your property.
When a house is condemned, the government has officially seized the property and they may or may not allow you to do anything about it.
Most of the time, condemned properties are a last resort to get the owner to do something about a dilapidated building.
For a homeowner, you may be able to come up with a rehabilitation plan that they’ll accept, allowing you to move towards fixing the home and taking it back.
Even in situations where the house is severely damaged, they may be willing to let the repairs go through.
The city isn’t going to be proactive in trying to get you to do the work, so it’s up to you as the owner to stay on top of it.
The way to do this differs based on the city or county regulations, but in a lot of cases it requires going to a hearing, getting proper permits, and attending certain developer meetings that get the OK to work on the property.
Check out this video on the importance of permits for a remodel:
A house can be condemned due to mold as well, which counts as an unsafe or unsanitary condition.
With the recent floods, this is happening quite often in many suburbs around Houston.
This is especially true if the property is located in a place where the city has no interest.
The chances of that happening for a commercial property are a bit lower.
In cases when they aren’t interested in having the property fixed up, they will mark it for demolition and eventually have it leveled in order to use it for something.
Can you sell a condemned house?
If your has been condemned, there still may be something you can do it about.