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adverse possession

Man Claims Home for $16, Neighbors Are Pissed

It pays to know the law.

No, I mean it really pays. A guy found a loophole in Texas law and claimed a $330,000 home by filling out a form and paying $16.

I don’t even think Warren Buffett can turn $16 into $330k. That’s a 2,062,500% return on investment!

The bank that owned the mortgage foreclosed on the owner, and then the bank went out of business. At that point, Kenneth Robinson did some research, determined it was a vacant property, and moved in.

Here is and explanation of the law, adverse possession, that Mr. Robinson used to claim the property, from ABC News.

Adverse possession is a common law concept developed in the 1800s. According to Lucas A. Ferrara, a partner in Newman Ferrara, a New York City real estate law firm, adverse possession was enacted to ensure that property wasn’t abandoned and was “maintained and monitored.” It requires the posting of a clear, public notice that someone is at the property — hence the court filing — and that someone would remain there for a specific period of time, usually 10 years.

Basically, Mr. Robinson used an outdated but entirely legal method of obtaining this house. At least that’s what it looks like to me. So did his neighbors come over and greet him with fruit cakes and pat him on the back for beating the system and getting a free home?

Of course not.

They are pissed. Every month they pay their mortgage, they are going to get more angry with him. They will continue to work hard to earn money to pay off their homes while this guy lives next door for $16 freaking dollars!

From the news story, it looks like the neighbor may go as far as hiring lawyers to comb through Texas law and find something that denies his right to the property. They want him out bad!

It’s Legal, but is it Right?

Just because something is legal doesn’t make it morally permissible. I’m going to assume the law is on Kenneth’s side (although if you are a lawyer and know otherwise, please let me know in the comments), but the question remains:

Do you think it is morally acceptable to use an antiquated loophole in state law to claim a property?

adverse possessionI personally don’t think he is the rightful owner. I actually started writing about how I think he has a legitimate moral claim to the home, but then I started thinking more.

The home used to be owned by a person who didn’t pay the mortgage. Then it was owned by a bank, who went out of business because they couldn’t pay their bills. It seems logical to me that the rightful owner of this house would be the bank’s creditors. Certainly the bank must have unpaid debts, or else they wouldn’t have gone out of business.

This house should be sold at auction and the money should be used to pay those debts. This man has no moral right to property that should belong to someone else. I honestly don’t even know how the house wasn’t auctioned off when the bank went out of business. If, in some crazy scenario, the bank that went out of business had no debts, then the house would belong to the bank. The home should still be auctioned, and the proceeds should go to the owners/shareholders.

That’s how I feel, so now I’m ready for your opinion. Is using adverse possession morally acceptable? If so, why? If not, then who should own the house? Leave your comments below.

16 thoughts on “Man Claims Home for $16, Neighbors Are Pissed”

  1. I love this… I really do. The law allows it. Morality has nothing to do with it. He did his research, if I was lucky enough to be in his situation, I would do the exact same thing.

    The neighbors are so envious of his intelligence and luck.

    The only draw back is the neighborhood block party is going to be very awkward!

    Actually, on the flipside, the neighbors should be very, very thankful. If the house were to go to auction or into full foreclosure or sold short, all of the other houses in the neighborhood would decrease in market comp value. This law, from my understanding, allows ownership to transfer w/o an actual sale. So when a RE agent does a sales comp analysis, this house will not show up.

    They should be thanking him, especially those who are selling soon!

    1. You are right Tom, in that morality doesn’t have anything to do with the legal status of his ownership of the home.

      However, moral questions are good to explore. If no one had a financial claim to the home, then I’m happy to let him have it (as long as he lives up to the rules of maintaining and monitoring the house laid out in the adverse possession law). But the fact is, there are people out there with a financial claim to this property. They are the ones that truly deserve it.

      Shame on those people for not claiming it earlier, but I think they should have legal protection to claim ownership of the home for longer than just the year it was vacant.

      1. “But the fact is, there are people out there with a financial claim to this property. They are the ones that truly deserve it.”

        Are they?

        The article and the video both say that the people walked away. If you want to talk morals, they no longer are moral owners of that property and do not deserve it.

        Technically, according to the law, they no longer have financial claim to the home either. If they want it back, they must pay their debts.

        1. In the article, I mentioned that the rightful owner of the house should be unpaid creditors of the bank that went out of business.

  2. Part of me wants to say that the neighbors are pissed more because they didn’t get it for $16.

    As far as whether it’s morally right, I say no, but I sadly also must point out that morals seem to have gone out the window for many people these days. People do what they want as long as it benefits them, not caring what harm it may cause elsewhere (read: walking away from mortgages even though you can afford them, something that will continue to perpetuate the housing market decline)

    1. Walking away from mortgages is definitely a moral situation that can be very complicated. You are right though, that people will do whatever the laws allow, regardless of morality.

    1. I found that video on News One, whose slogan is “For Black America”. Since they focus on black news, I think that’s why they put that in the title.

  3. The only benefit I can see here is that in theory the neighborhood got a smart neighbor who, hopefully, cares about and maintains his home a lot sooner than they would have had the house gone through another round of transfers to some business creditor who doesn’t know the area and just wants to liquidate the new asset ASAP. I’ve visited towns where families would be excited to have more neighbors instead of vacant foreclosures which become more dilapidated eyesores by the day.

    Not the guy had a “right” to the house, but it’s not all bad news.

    1. It will definitely be better for the neighborhood to have a neighbor that takes care of the property and is a good resident.

      However, I do think the neighbors would have a case to kick him out if he didn’t maintain the property well, since he is claiming it on the grounds that he will maintain it better than if it were vacant.

  4. That is absolutely crazy. I am surprised that the government is allowing that to happen

    1. I don’t think the government should have any say in it. I’m surprised the unpaid creditors of the bank that went out of business are just sitting by and letting it happen.

  5. Awesome! You can bet there are a bunch of Texan are scrounging for adverse properties now. Are you looking for one? What would you do if you find a property that you can get for just filing a paper?
    His neighbors are just jealous. If they did the leg work they could have moved in before he did.

  6. Why is the video clip entitled “BLACK Texas man buys house…”? Are they insinuating this strange loophole is being contestied only b/c he is black and his neighbours are white? *Sigh*

    I think this guy is really smart for figuring this out, and the law is the law. If the original owner or the bank wants to complain, fine, but the neighbours have no right to say anything. They are jealous, mad, whatever, but this legal (ingenious) thing he did is LEGAL, so the neighbours need to get the f* over it!

    1. I found that video on News One, whose slogan is “For Black America”. Since they focus on black news, I think that’s why they put that in the title. The insinuation is coming from the person who uploaded the video; not me.

  7. I agree that it doesn’t quite seem right and that it should belong to the banks creditors. I assume that they will have to have that dispute in court if they want to consider the house an asset of the bank. That being said, it sounds like the law should probably be modified to conform to a more modern society than was present in the 1800s.

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