Module 1 – Inspection Commonalities
Chapter 7: Determination of Occupancy Status
Determination of Occupancy Status
An accurate determination of occupancy must be made on all inspections. Any factors used to make this determination should be noted on the inspection form or in the comment section.
Try to include some of those reasons in the photo of the property (ex. car in driveway). The best way to verify occupancy is to make contact (if permitted) with someone at the property and note their relationship to the property (owner, non-owner, relative). If contact is made with a tenant, it is a best practice to obtain the lease information to include within the report. If contact was made with a neighbor, make note of their name and their proximity to the property or their address. If contact is not made, try to list at least three reasons the property is occupied (example: furniture, car, lawn, decorations, animals, and people). On Bankruptcy or No Contact inspections, give as much information as possible and write in the comment section, “Unable to check closer due to Bankruptcy status”. To document occupancy:
● When reporting “occupied by direct contact”, the inspector should be sure to indicate who he spoke with and any additional information including their name and temperament.
● If the inspector determines that a property is occupied by visual observation, he should mark “occupied by unknown” since the mortgagor was not confirmed to be the occupant.
● When verifying occupancy, the inspector should us as many reasons as possible.
∙ Dogs may be abandoned, cars may belong to neighbors, or the yard may be maintained by a neighbor. The more reasons for occupancy status documented the better.
● The best way to verify occupancy is by direct contact with the occupant.
Determining a property is vacant sets several actions in motion and allows the mortgage company to begin taking steps to preserve their asset. Failure to promptly secure a property after it has been deemed vacant can lead to large monetary losses and threatens the integrity of the property. When calling a property vacant, it is important to walk all four sides of the property and note if it is secure or not secure. It should also be noted if there is personal property at the premises, and if there is a pool or hot tub. Any damages should also be noted. Inspectors are also required to check the status of utilities. If unknown, specify the reason why. Inspectors should never enter a vacant structure unless an interior inspection is ordered.
● Unless the order is for a bankruptcy or no contact inspection the inspector should walk the property to determine if it is secure or if maintenance is required.
● Best practices are to provide photos of all 4 sides of the property. If an area is inaccessible, then provide photos of why it is inaccessible.
● Do not enter a vacant property, including the garage, unless the order includes an interior inspection.
● Report the property as secure only if all doors and windows are locked, including garage, outbuildings, and upstairs windows. Take any necessary photos indicating where the property is unsecure.
∙ If the property is unsecure, secure the property if possible by locking open doors or shutting windows, and note in the comments.
● The inspector should take as many photos as needed to document his findings at the property. Photos taken through the windows are helpful in showing lack of furniture, minimal furniture, etc. Photos of electric meters, grass height, and any damages found at the property are also helpful.
● Some companies require that a vacant sticker be affixed to the property notifying the mortgagor of the vacancy status being reported to the mortgage company and the mortgage company’s right to secure the property.
● Most companies require that FTV (First Time Vacant) inspection results be returned within 24 hours due to the additional risk involved for the client.
● Report findings regarding common vacancy questions:
∙ Is there personal property on site?
∙ Is there a pool or hot tub on site?
∙ Is the pool or hot tub secure?
∙ UTILITIES ON? – Electric – Gas – Water
∙ Maintenance or Re-securing Recommended?
∙ Change Locks
∙ Replace Glass
∙ Cut Grass — Note height of grass
∙ Secure pool/hot tub? – Pools need secured if not behind locked gate.
∙ Remove Debris
∙ Other? _________ – Other could be to repair hazards, roof, etc.
Partially Vacant Properties
Partial Vacant findings apply to only the following property types:
● Other multiple unit property types
● Properties with single access point
When one or more of the units is vacant on these property types and other units are occupied the inspector should mark the results as Partially Vacant. Include all vacancy information for the vacant unit. Note how many units are present, which units are vacant and how vacancy was determined for each unit.