Putting homeless in abandoned properties fraught with legal problems

Since moving into a home eight weeks ago, Tene Smith has hung one of her paintings on a wall, a reminder of her youthful aspirations to become an artist. She’s hosted a community group in her living room. Her daughter had a friend sleep over, and they danced much of the night.

It all sounds so normal. But the 40-year-old mother of four is never sure when she’s going to have to gather up her family and their possessions and leave.

Smith and her children are squatters, or as Liberate the South Side, the community group that placed her in the vacant home calls them, “tenants without a lease.”

And while Smith has started calling the Chicago property “my house,” she recently discovered that it is owned by a private individual who is trying to sell it and repair his own finances.

In Chicago and cities throughout the country, community groups and homeowners have rallied to protest what they decry as the inequities between bailed-out megabanks and financially strapped consumers. The Occupy Wall Street movement turned its attention to the housing crisis last fall, and groups around the country have worked to keep people in their homes, place the needy in properties that are seemingly abandoned and rid neighborhoods of blight. The size of the movement isn’t clear because most go unpublicized.

Mortgage servicers, reeling with hundreds of thousands of foreclosed homes, aren’t necessarily giving in. But they have to tread carefully in their dealings with consumers and activists, lest they risk more national media attention and another black eye resulting from news accounts of bankers putting families out on the street, regardless of whether they have a legal right to the home.

Still, the efforts haven’t always gone as planned, as evidenced by the turn of events at the duplex home on South Kenwood Avenue, where the owner of the vacant home suddenly reappeared in the picture.

And that is worrying to well-established groups like the Chicago Anti-Eviction Campaign, which plans to significantly ramp up the visibility of its “live-ins” prior to May’s NATO summit.

The anti-eviction campaign, which trains groups like Liberate the South Side in home takeovers and has participated in seven since June, calls the situation a public relations “nightmare.”

A spokeswoman for Liberate calls it a “calculated risk.”

Yet Smith, who will eventually have to uproot her family, is more optimistic, saying the home occupation, for however long it lasts, “lifted my spirits. It inspires me to do more extraordinary things with my life.”

The two-bedroom, one-bath duplex on a quiet, wide street in the Calumet Heights neighborhood sold in March 2006 for $114,500 to Benjamin Dodd, according to public records. In July 2007, it fell into foreclosure. By June 2011, the home was listed in the city’s vacant building registry as a partially secured troubled building.

Late last year, a group of Chicago neighborhood activists incorporated Liberate the South Side with the state as a nonprofit and received training in how to find, fix and occupy vacant homes. An “entry team” broke into the home to see its condition. They also determined, incorrectly, that it had been repossessed by Bank of America.

Volunteers pried the plywood off the windows, pulled up the carpeting that revealed stained hardwood floors and repainted the walls white. A furnace, water heater, refrigerator, towels and toiletries were donated to the home and family. Rotted drywall in the basement was ripped out, but dried brown sludge still covers the floor, and a broken sump pump sits crooked in its hole. Labor was donated by local contractors. Altogether, about $3,000 was invested in the home.

“We looked at a lot of houses in various communities, and this was one of the better ones,” said Shani Smith, a member of Liberate and Tene Smith’s younger sister. She sees the work as a move toward economic justice and away from the neighborhood blight that has, she said, unfairly affected communities of color. “We don’t feel like we’re breaking the law compared to what (banks) are doing to everyday families.”

When discussions to move the first family selected for the home fizzled, Liberate offered the home to Tene Smith and her children, who were living nearby with her parents, Shani and Shani’s son. Tene Smith wasn’t so sure.

“I had a lot of fears,” she recalled, sitting on the beaten-down blue couch in her living room. “Could the police just come in?”

Following the blueprint given them by the anti-eviction campaign, Liberate did a background and drug test on Tene Smith and told neighbors of their plans to remove a boarded-up, unsafe eyesore from their block by putting a family in the vacant home. They also put the heating bill in Liberate’s name, following the advice of an attorney who said that would entitle them to some occupancy rights.

Shani Smith said the group also notified the office of 8th Ward Ald. Michelle Harris of its plans. Harris’ office did not respond to a request for comment.

On a cold day in mid-January, Liberate led a well-publicized, well-attended community march and press conference to the home where Tene Smith had moved with her three children (her oldest daughter is away at college). Video of the event was posted on the organization’s Web page in an effort to bring attention to the impact of foreclosures on neighborhoods, particularly in communities of color.

Smith settled in, but she knew something was amiss when an appraiser knocked on the door one day. She called her sister, and members of Liberate came to the home before they let the appraiser in.

“I just sat in the kitchen and prayed,” Tene Smith said.

Still, no efforts were made to remove the family, and Liberate learned that although Bank of America was the mortgage servicer seeking to foreclose on the home, Dodd still owned the property. In fact, Dodd and the bank agreed to try to avoid a foreclosure by listing the home as a short sale and offering Dodd a $2,500 relocation fee at closing. Listed for sale Feb. 7, it’s now priced at $32,100.

Dodd declined an interview request. However, David Piche, the Re/Max Signature agent who is working with Dodd and the bank, said he has urged Dodd to call the police and have the family removed.

“He has not done that,” Piche said. “Would you buy it with these people there, and not knowing how you’re going to get them to leave and how much it’s going to cost, for a $30,000 property?”

On Tuesday, Piche received an offer for half the list price on the house.

“Part of the reason for that is these people are adding risk to the transaction,” he said. “A buyer is going to assume this occupancy, which is an issue. (Smith) is not the only one who needs help here. Maybe they’ve made some improvements, but it’s more than offset by the risks they’ve brought to the property.”

Smith’s story is not an isolated incident. Another group, Communities United Against Foreclosure and Eviction, moved a family into a vacant home in the city’s Belmont-Cragin neighborhood in a well-publicized event late last year.

Foreclosure proceedings had been initiated against the homeowner by Bank of America. That homeowner now has gone to court to try to evict the family, and though the bank is not officially a party to the legal action, it is helping the homeowner. It has assisted homeowners in similar situations elsewhere in the country.

“Because we knew about it, we are taking steps necessary to protect our customer,” said spokeswoman Jumana Bauwens. “First and foremost, we’re protecting the asset. We want to make sure the asset is not destroyed.”

Meanwhile, Communities United has also moved a family into a vacant home in Rogers Park, and this month it took over another home with the same goal.

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“It’s more like a live-in,” said Toussaint Losier, of the anti-eviction campaign. “Folks during the Civil Rights (movement) did a sit-in. Part of what we’ve been trying to say is, ‘What does it mean to have homeless families in the city of Chicago, and more abandoned properties than there are homeless families?'”

But situations like the one on South Kenwood weaken the movement because the campaign’s target is banks, not homeowners who abandon their properties because they can no longer afford them, said the campaign’s chairman, Willie J.R. Fleming.

“You can’t take a shortcut in this,” Fleming said.

Legally, the issue of Smith’s occupancy sends attorneys to their law books.

She isn’t the legal occupant of the home, but it’s a different situation than, say, a homeowner who returns home to find someone in their house and calls the police. In this case, community members know she’s been there for some time. The owner would have to try to evict Smith under the state’s Forcible Entry and Detainer Act, designed to protect tenants from quick, forcible evictions, said Mark Swartz, legal director of the Lawyers’ Committee for Better Housing.

“They’re doing (the occupation ) in the light of day,” Swartz said. “It’s a very clever strategy.”

It’s also powerful advocacy, Swartz said, but added, “There’s a great risk here. We need to be concerned about the people. We need to be concerned about the laws being followed. Organizers have a whole different toolbox than attorneys. I think these people believe they are advocating for a more humane way.”

Timothy Hufman, an attorney with the Legal Assistance Foundation of Metropolitan Chicago, isn’t so sure a tenancy has been established, because it could boil down to a case of he said/she said between Dodd and Smith.

“If the owner says, ‘I never told them they could stay there,’ they’re screwed,” Hufman said.

Until she hears different, Tene Smith continues her daily routine, working two part-time jobs, going to school to become a welder and caring for her children. She has met Dodd, who, she said, told her she could stay in the home until it sells.

“This keeps me on my toes for the goals I want to accomplish,” Smith said. “I do believe I am going to have my own home.”

Liberate is taking it day by day as well.

“Our view is until it sells, we’ll stay there and encourage the bank to donate the property and let (Dodd) off the hook,” said Kristi Sanford, a spokeswoman for the group. “If he does sell the house, it may be largely because of the work that was done. We always knew that there’s just no guarantees.”

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Battles across the nation

Around the country, community groups affiliated with Occupy Our Homes, an offshoot of the Occupy Wall Street movement, and others are fighting the evictions of homeowners from foreclosed properties and placing the homeless in vacant residences.

In New York, a group garnered much publicity late last year for moving a homeless man and his family into a vacant home. Last month, according to media accounts, the owner, who had moved to an apartment while he tried to negotiate a mortgage modification with his lender, returned to find the home gutted.

In Atlanta, protesters pitched tents in the front yard of a home that had gone to foreclosure sale, which the daughter of the owner didn’t know about until after her mother died. Now, Chase Bank is working with the family to find a resolution agreeable to all parties.

And in Minneapolis, community activists drew attention to the plight of a former Marine whose home is in foreclosure, and he eventually was offered a mortgage modification.

Occupy Our Homes has said it will have a national “week of action” Monday through Friday to protest the foreclosure practices of the nation’s largest banks.