There’s a Stranger in my home!

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A claim in the making.

This week’s claim is a hypothetical based on a true story told to me by an acquaintance named Bob. Bob lived in Northern California and had an elderly mother with a home in the Southern California area some 400 miles away. The mother had been put in a nursing home for Alzheimer’s and was not likely to return to her house. The house was in her name and Bob was not able to sell it. His mom had been in the nursing home for two years before she died and he inherited the home.

Bob had visited the home only occasionally when he went to see his mother. Prior to her death, Bob had not been to the home for 8 months. When he went to the home to take out his mother’s possessions and get it ready to sell he was met with a real surprise. There were tenants in his home; the home had been re-landscaped and had a new paint job, as well. When Bob rang the doorbell of “his” home, he was met by a woman and, in the background, were a group of children playing. Bob asked “who are you?” and the reply was they were the tenants. It took little time for Bob to be told that “his” home had been leased to this family by a real estate company down the street. The tenants were paying $1200 a month and had put a deposit on the home equal to their last payment.

As you read this story you have got to be asking, how could this have happened?…Am I reading this right?… Is the woman writing this article crazy? The story seems outrageous but is not as uncommon as you might think. This is the practice of “rent skimming” which has evolved out of the foreclosures and properties just sitting vacant, unattended and “vulnerable”. “Rent Skimmers” are people who pretend to own a foreclosed or vacant property and scam tenants out of thousands of dollars in security deposits and fees. Rent Skimmers phony-up lease agreements and prey upon people who often have lost their own homes and are looking for a reasonable place to live. The lessees are the innocent victims.

So, back to Bob. After hearing the story he immediately went to the real estate company and confronted them. They admitted to the illegal leasing of the premises and offered to return all of the money they had earned on the rental. This particular situation had an interesting twist. While Bob should have been incensed and taken legal action against the company he decided to take their offer AND to keep the tenants on in the home. It ended up being a good deal for him.

This bizarre story has some interesting insurance twists and turns. Who is supposed to be insuring the property after all? The leasing company that had no ownership interest at all but had entered into a contract (illegal in all aspects)? The tenant who had entered into the contract which, of course, was invalid? Bob’s mother who had maintained a Homeowners Policy for all those years in the nursing home, which if put to the test may very well have been invalid because she was not “in residence” as required by the policy? Or how about Bob, who had no ownership interest until his Mom had passed away?

A claim in the making. But as luck would have it, nothing actually ever happened to the home so we didn’t have to test the question of coverage. Homeowner beware—there may be a stranger in YOUR home.

~Laurie