Vendor Portal
If you own Chicago investment property (and in many other parts of the nation), squatters have become a serious problem. There are many different flavors of squatters. Most often, we deal with people who just move on into vacant properties without consulting anyone. It gets a little trickier with another flavor of squatter who claims they thought they had a valid lease but have been scammed by someone else. We sat down with George McCleary, who has more than 20 years of property management experience, to discuss how to deal with squatters.
What’s A Squatter?
When a landlord has a tenant who hasn’t paid their rent for months, they’re not a squatter. If they signed a valid lease with you as the property owner, they are non-paying tenants. At one point, they had a contractual right to occupy the property and then chose not to pay. There are a number of ways to deal with deadbeat tenants—from following the arduous eviction process to Cash for Keys offers—but those options differ from those to deal with a squatter.
A squatter is someone who has never signed a lease agreement with the actual owner of the rental property. It doesn’t matter if someone was bamboozled by a fraudster claiming to be a Chicago property manager. Legally, they are residing in a rental home without an agreement with the actual owner.
Law Enforcement Fleecing
Usually, the first thing a landlord does when they discover an actual squatter in their rental property is to call the proper authorities. The trouble is serial squatters have learned a few tricks on how to fool law enforcement when they come knocking.
Squatters often blatantly insist they have rights. They’ll move in furniture and other personal items to “prove” tenancy and even produce fake leases. It’s enough to create a he-said, she-said situation, especially if the squatter somehow managed to get utilities for the property in their name, too. As the saying goes, “possession is nine-tenths of the law.”
You can’t really blame a cop for not wanting to put their job on the line trying to decide who the bad actor is in the situation. Rather than serving as judge, jury, and executioner in the field, the officer will tell them they need to sort things out in court.
While there may not be a “Squatters R Us” Facebook group, criminals use the internet as much as the rest of us. So they learn tips and tricks from one another.
Where Do The Squatters Target?
Politics aside (no, really), squatters are a problem everywhere. Anywhere in the world with tenant laws has squatter issues. Red states. Blue states. Big cities. Small towns. Rural areas. It’s a veritable Dr. Seuss book of places squatters target.
To be fair, George said landlords in blue states or municipalities might have a tougher time getting rid of squatters because the tenant-landlord laws tend to favor the tenants. But red and purple states also get their fair share of squatters.
George recently had his “I Stole a House” video go viral. In it, he impersonated a squatter and explained how they do it. As a result, he’s heard squatter horror stories from around the world. Recognizing the need to address this massive, global problem, George created the Squatter Defender Training Course to help educate owners on their options for dealing with squatters in their properties. The three-hour course condensed all the information George has learned on squatters, including prevention, detection, and ejection.
(Get 20% off the Squatter Defender Training Course with the code “SUCI”)
Stop Squatters Before They Get In
An ounce of prevention is worth a pound of cure. The easiest way to deal with a squatter is before they ever manage to set up shop on your property. Squatters have the opportunity to break into your place and make it look legit if there are long lengths of time that the empty property sits unattended.
Here are a few quick tips (not all are advisable):
Keep Eyeballs on the Property
If you can’t drive by and visit a vacant property regularly (daily is best), technology can serve as your eyes and ears. For example, as part of George’s program, he offers half off a SimpliSafe system. A few cameras and a talk-back system help you identify if anyone is in your house who shouldn’t be and let them know you see them.
Employ Unconventional Methods
Go straight Goonies on would-be squatters by setting boobie traps that Data would be proud of. We don’t condone tossing bear traps on the porch that can maim people (you have all new liability issues now). However, some of the stories George heard are as hilarious as they are out of pocket. His favorite involves animals (as in lots of snakes down a chimney or self-infesting a property with rats or mice). This renders the property uninhabitable. Weirdly, rats are neater and cleaner than squatters… and easier to remove.
Come Completely Unhinged
Take unpredictable animals off the table. An owner once told George that once he say a car in the driveway of his rental and knocked on the door. The man who answered had a some basic belongings inside and naturally claimed he had rights. After the squatter slammed the door in the owner’s face, the owner promptly kicked the door in. Rather than going inside and risk a fight, he calmly walked back to his car and called the cops, claiming forced entry and trespassing. When officers arrived and saw the evidence, the squatter was arrested.
Real Estate Owned Tattling
Say a bank forecloses on a property, sells it to an investor, and then squatters are discovered. So they call the city on themselves. By asking for the city to render the property uninhabitable (because usually, it is by the time a squatter’s been in there a minute), anyone living there must vacate. While this creates violations, the new investment property owner accepts responsibility for amending them, which is something they’d have to do anyway to rent it out.
The Well’s Run Out
Did you know that in all 50 states, any property without running water is considered uninhabitable? An owner can render a property uninhabitable by having the water turned off. Bear in mind, this will create all new and potentially disgusting issues when squatters cannot use facilities in the traditional manner.
Florida’s New Squatter Code
An interesting new law came into effect in the state of Florida. HB 621, signed into effect by Florida Governor Ron DeSantis in March 2024, allows a landlord to call the sheriff’s office on a squatter. Rather than going through the lengthy court process, the new law allows the sheriff to remove the squatter immediately; however, if the accused squatter comes back with proof they had a valid lease, the landlord has serious legal problems.
Because the ramifications are of severe of falsely accusing and removing a legal renter, landlords are incentivized not to abuse this new rule. Potentially, other states could adopt similar laws that fast track cases seeing their day in court and getting squatters out sooner.
Deed Fraud
While speaking with owners about their squatter situations, George encountered an even more insidious crime: deed fraud. Deed fraud occurs when someone manages to alter or transfer a property’s title without the real owner’s knowledge because there’s no mechanism notifying the owner of the title transfer.
The person forges a deed or uses stolen identity information to sell or mortgage a property. The consequences can be dire. The real owner can lose control of their property or face massive financial losses.
The most common form of deed fraud happens when a criminal discovers a fully paid-off property, acquires a fake ID on the dark web, and then forges a deed. The new fake owner then contacts a wholesale buyer and offers to sell it at a huge discount. The title is notarized (because the fake signature matches the fake ID) and the real owner has no idea any of this happened behind their back sometimes for months or years.
Why is this a new trend? The average American home has roughly $300k in equity, totally roughly $33 trillion in wealth for sticky fingers to steal. Unfortunately, committing deed fraud is shockingly easy. While there are only a handful of attorneys who specialize in deed fraud, they’re becoming increasingly busy.
Be Prepared
If you own investment property, it’s probably only a matter of time before you face a squatter issue. With the exponential growth in deed fraud, this is also an increasingly higher risk. Relying on an attorney or less-knowledgeable property manager is not a solid plan for dealing with squatters. Meanwhile, most title insurance policies do not cover fraud and impersonation after policy date. The only one that does is ALTA homeowners insurance policy, which is double the price so most don’t know about it at the time of purchase. .
Learn how to protect yourself with preventative measures through George’s company Title Fraud Defender that conducts daily title searches. While the can’t completely prevent title fraud, for a few dollars a month, it alerts owners so they can fix the problem quickly. If an unauthorized title transfer is detected Title Fraud Defender gives the owner immediate steps to quickly avoid equity transfer issues.
 Protect your investment |  |
