When Is A Property In Conveyance Condition?

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For a property to be in conveyance condition, HUD requires:

• The property be undamaged by fire, flood, earthquake, tornado, hurricane, or boiler explosion

• If conveyance is during grass cutting season, the grass must have been cut within two weeks of conveyance

• Mortgagees are to remove materials considered unhealthy or hazardous prior to conveyance

There are further HUD conveyance condition requirements concerning roof damage and fire insurance claims but whether these would be a condition for conveyance does not depend on whether the conditions exist or not, but rather when did the conditions occur, when were they discovered and when were they reported.

Additional conveyance conditions may be required by the M&M responsible for the property. The conditions may vary a little from one area to the next and from one M&M to another, but the conditions for property conveyance usually are:

• The mortgage company has clear title to the property which is usually accomplished as a result of the foreclosure sale

• The property must not be occupied

• The property is secure and has been secured following the guideline requirements including lock codes

• Outbuildings must be secured with proper locks and key codes

• Boarding, if required, must be complete as per the HUD specs

• Pools, hot tubs, and/or spas are secure

• The property has been winterized

• Utilities have been transferred into the mortgagee’s name, if required

• If the property has a sump pump, the sump pump is functional and electricity is on and transferred into the mortgage company’s name.

• Exterior debris and health hazards have been removed from the property

• Interior debris and health hazards have been removed from the property

• Personal property has been removed from the property

• Grass has been cut within two weeks of conveyance, if conveyed during grass cut season

• The property is free from any damage, other than that due to mortgagor neglect and/or unfinished renovations, except for fire, water, freeze, flood, earthquake, tornado, hurricane, boiler explosion, vandalism, and roof damages.

• There are no outstanding property condition code violations or citations.

If any of the above listed is not completed, the property is not in conveyance condition. The only exception to these requirements occurs if HUD has been advised of an issue where the requirements have not been met and has agreed to accept the property as is.

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2 thoughts on “When Is A Property In Conveyance Condition?

  1. These two clauses, excerpted from the above, seem to be contradictory or at least their wording is not as clear as one would want. Can you please clarify for the readers?

    The property is free from any damage, other than that due to mortgagor neglect and/or unfinished renovations, except for fire, water, freeze, flood, earthquake, tornado, hurricane, boiler explosion, vandalism, and roof damages.

    The property be undamaged by fire, flood, earthquake, tornado, hurricane, or boiler explosion

  2. If a property has a Pool, does the pool have to be drained (per regs) to be considered in Conveyance Condition or do all gates and fences just need to be secured with locks?

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