Legally speaking, abandoning a house isn't a smart thing to do, even if you don't have a current use for it. Gift it to someone, rent it out or sell it for a nominal price, but don't treat it as if it doesn't exist. Here are some of the consequences of abandoning a property:
The Government May Take It
One danger of abandoning your home is that the government may take it permanently. Some states have laws that allow the government to claim abandoned property without paying the owner. Usually, there is a specific period that must pass before the state can make its move. Therefore, don't abandon your property if you have hopes of using it one day.
You May Lose It to Squatters
If you abandon your home for a long time, the government may not be the only party eyeing it. Through adverse possession laws, somebody may start using your abandoned property and later claim it legally as their own. This may happen, for example, if your adjacent neighbor starts using your abandoned house, and continues to do so for many years that trigger the adverse possession laws in your state.
It May Bring Mortgage-Related Problems
If the house you are abandoning has an outstanding mortgage, then you have lots or mortgage-related problems to deal with. Here are two specific problems this may raise:
- Damage to your credit score – Once you stop making the payments, the information starts showing up on your credit report and stays there for seven years.
- Tax consequences – This is possible because the Internal Revenue Service (IRS) treats unpaid mortgage as income. Only a few homeowners get to enjoy tax breaks on unpaid mortgages; for example, you may qualify for a tax break if you took the mortgage between 2007 and 2012, and the house was your primary residence.
Thus, you may find yourself spending money on a property that doesn't benefit you in any way.
It May Cause You Civil Liability
Abandoning a house doesn't release you from the liability of any damages or injuries it may cause. In the eyes of the government, you are still responsible for ensuring that other people don't suffer damages due to the property. For example, if your abandoned house has a trampoline and a child gets injured while playing on it, you may be held responsible for the injury.
If you are facing legal issues after abandoning a house, consult a lawyer, such as Steve Butcher Sr, to help you sort them out. For example, a lawyer may help you prove that you qualify for a tax break for not paying your mortgage or help you prevent adverse possession of the land if you have future use for it.