What is a Condemned House?

The world of real estate is filled with opportunities, and one such opportunity that often stirs up intrigue is the prospect of buying a condemned house. These properties, often marked by signs of disrepair and neglect, are typically deemed uninhabitable by government entities. This article delves into the intricate world of condemned houses, providing a comprehensive guide for potential buyers, sellers, and real estate investors.

Understanding Condemned Houses

A condemned house is a property that has been declared unfit for habitation due to unsafe living conditions, abundant code violations, or if it obstructs public improvements such as highway expansion. The condemnation process is initiated by entities known as “condemning authorities,” which include local, state, and federal governments. In some cases, a home inspector or the local Board of Health can also condemn a property if they identify significant code violations or safety issues during an inspection.

The process of condemning a house can take weeks, months, or even years, depending on the reason for condemnation. Once a house has been officially declared uninhabitable in a court hearing, occupants are given a specified period to vacate the premises, which can range anywhere from 24 hours to 60 days.

Reasons for Condemning a House

A house can be condemned for a multitude of reasons. These include repetitive housing code violations, unsafe living conditions such as termite damage or structural damage from natural forces, unsanitary conditions like sewage backup or mold infestations, and abandonment. In some cases, a house can be condemned due to a situation known as eminent domain, where the government seizes a property to pursue public improvement.

In cases of eminent domain, the homeowner must be appropriately compensated for their home, meaning they must be paid fair market value for their property. If the condemning authority’s offer does not meet the fair market value, homeowners can contest and renegotiate it. However, the homeowner must ultimately comply with selling the property to the state and vacating the premises.

Pro Tip: A hoarder’s house is a property where excessive amounts of items, often of little to no value, have been accumulated to the point where it impedes the use of living spaces. The clutter can create unsanitary conditions, pose fire hazards, and lead to structural damage, all of which can result in the house being condemned. The process of restoring a hoarder’s house to a livable condition can be a monumental task, often requiring professional cleaning services, extensive repairs, and in some cases, even demolition and rebuilding.

Living in a Condemned House

Living in a condemned house is not an option. Homes are usually condemned due to immense safety or sanitary concerns, and no one can inhabit the condemned property until appropriate renovations have been made. However, it’s important to note that condemned homes tend to attract squatters. If left unattended, squatters can pose significant challenges to homeowners who wish to reclaim possession of their homes in the future.

Selling and Buying a Condemned House

While selling a condemned house can be challenging due to its non-traditional status, it is not impossible. These properties are usually sold on an “as is” basis, meaning they are sold in their current condition. Traditional homebuyers are unlikely to secure loans for such properties as they are uninhabitable and make poor collateral. Instead, condemned houses are often purchased by professionals or investors who understand the renovation requirements and have the necessary resources.

Buying a condemned house may seem like a savvy idea for real estate investors due to the typically lower than market price; however, be wary of the cost of renovation and permitting to bring it back to code and non-condemned status. For example, whichever government agencies have condemned the property will need their issues with the property fixed or resolved, and may need to do inspections to un-condemn the property. You may even need to pay extra for an expediter to help you clear the red tape. All of this creates added time and expense that you need to factor in.

Restoring a Condemned House

Restoring a condemned house is a significant undertaking that requires a substantial investment of time, money, and resources. The process typically involves addressing the issues that led to the condemnation, such as structural damage, code violations, or health hazards. Once these issues have been resolved, the house must pass an inspection by the condemning authority before it can be deemed habitable again.

It’s crucial to note that not all condemned houses are beyond repair. Some properties may have a solid structure and architectural quality that makes them suitable for restoration or renovation before selling. However, these are not your typical fixer-uppers and usually require a large infusion of cash to fix.

Demolishing a Condemned House

In some cases, the best course of action for a condemned house is demolition. This is usually the case when the cost of repairs exceeds the potential return on investment. When a property is demolished, the buyer will be responsible for all of the costs associated with the demolition. However, the value of the land on which the house stands can often make this a worthwhile investment, especially in areas with high demand for real estate like Miami (check out our guide to the pros and cons of living in Miami).

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Final Thoughts

Condemned houses present a unique opportunity for real estate investors and contractors. While they come with theirown set of challenges, they can offer significant returns for those willing to take on the task of restoration or demolition. However, it’s crucial to approach these properties with a clear understanding of the potential costs, legal implications, and renovation requirements. With the right approach and resources, a condemned house can be transformed into a valuable piece of real estate.

Disclosure: Hauseit® and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. No representation, guarantee or warranty of any kind is made regarding the completeness or accuracy of information provided.

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