What exactly does it mean when a building is condemned?

There is a lot of confusion surrounding how a building becomes condemned and what happens to it after. A condemned property is one that the government deems unfit for anyone to live in or utilize due to health and safety concerns. Living in a condemned home is illegal more often than not — though the legality depends on your location. Even if you can live in a condemned home in your state, you wouldn’t want to.

It’s possible to fix a condemned home, and remove its condemned status, but it can potentially cost a lot of time and money, depending on what’s wrong with it. It's common for professional estate professionals and home rehabbers to buy condemned properties, which are usually cheaper than move-in ready homes, and flip them, which can entail much more work than your usual fixer-upper.

What happens when a house is condemned?

When a building is condemned, the owner will be notified by the condemning authority by mail.

If someone is living in the house at the time, then they will most likely have to move out, and they can’t move back in until reasons the government condemned the home are resolved. 

For example, if certain renovations need to be made for the home to be considered livable, the homeowner can complete those and can then apply to have the condemnation removed. Court appearances may be required during the condemnation process. 

If a condemned building isn’t restored, the government may have it demolished at your expense.

Why are buildings condemned?

There are many different reasons a home may become condemned, but usually this happens when a home poses a safety risk to the individuals living in it and receives housing code violations.

Many people picture condemned homes as ones that are abandoned or are in a state of disrepair due to negligence, but this isn’t always the case. For example, some condemned houses may appear to be in good condition from the outside — it’s not until you renovate it down the road and hire an inspector that you realized there are underlying issues that the owners didn't catch or disclose. 

This is why it’s important not to waive your home inspection, even if you’re buying a house in cash and aren’t required to get one (as is the case when you take out a mortgage loan). The last thing you want is to move into your new home and find expensive repairs are waiting for you. 

Common reasons a house may be condemned

• Water damage
• Infrastructure failure
• Termite damage
• Unsafe building materials or building conditions
• Fire damage

Issues like broken plumbing systems can lead to major sanitary problems. Having too much clutter can also cause a home to become so dirty and difficult to navigate to the point that it becomes unsafe — especially if pest infestations form as a result of the clutter. Some homes have such a large presence of black mold or experience severe structural damage and due to one of these issues the home become uninhabitable.

While some of these problems may be avoidable (like clutter — a hoarder's home may face condemnation), some are clearly not (such as foundation damage that occurs after a storm). 

Related: 7 signs a house will collapse

Eminent domain 

When the government wants to change private property into public property, such as for extending a highway, they may condemn your house by exercising powers of eminent domain. If successful, the government is required to pay you out for your home’s market value. 

Can you sell a condemned house?

You can’t technically sell a condemned home, but you can sell the land it sits on. In most states it is illegal to live in a condemned home, which puts the owners in a very difficult position whether they want to hold onto it. They will be given the opportunity to make all necessary repairs, but generally that is a major financial undertaking, and may not be worth it depending on the status of the home and if infrastructural issues, like foundation damage, are the reason it was condemned.

It’s worth noting that when you sell a condemned house, you’ll sell it for much less than the market value given the conditions of the house and the fact that the buyer will have the added expense of tearing down the condemned house and removing the remnants for the land. These added costs can make it quite difficult for the buyer to secure a mortgage loan, which is why your best bet may be selling condemned homes to an investor, like one of the many companies that buy houses for cash. 

→ Learn more about selling a house in poor condition

Can you buy a condemned home?

People tend to buy condemned homes as a means to buy the land, since the house may be damaged and not worth repair. When you buy condemned property, you need to know what you're getting into. If the house is being sold sight-unseen, you won't be able to have a walk through.

Buying condemned property may be appealing to people who are just looking to build a custom home from scratch on the property, but there are a few things to consider. 

When a home is condemned, there’s a chance that there are unpaid property tax bills or liens on the home, and when you buy the home you may inherit that debt. You may also have to deal with squatters living on the property illegally. Do your research carefully before buying a condemned home to make sure you understand your rights as a property owner, and the logistical and financial commitment you’re taking on. One place to start is with a title search to see if there are any issues. 

If you decide to buy a condemned house, you’ll most likely need to buy in cash, since it can be difficult to find a lender willing to take on the risk to give you a mortgage. You will also have to jump through another hurdle — consulting with the city or town. The local government in your area may require you to prove that you have real plans for home and the financial ability to pay for them — whether you’re removing the home from the land or repairing the home in order to make it livable again. 

What it takes to fix the home to bring it up to living standards will depend entirely on the issues that led to the home being condemned, and the city is obligated to tell you what they are. 

If you’re not sure whether or not buying a condemned house is a good fit for your needs, you can weigh the pros and cons to help you reach a decision.

Pros of buying a condemned building

• Good deals and negotiating room
• Potential to renovate and profit off the home
• Easier to secure a desirable piece of land in a good area
• Saving a historic home
• Practice flipping a house more affordably

Cons of buying a condemned building

• Lengthy approval process for the sale
• Can be expensive to make livable again
• Demolition work and costs if you’re building from the ground up
• New problems during the remodeling phase
• Time-consuming repairs and construction
• Finding temporary housing while you await approval to live in the home

Some people may think that buying a condemned house is a good investment opportunity or gives them the chance to build a custom home or rehab one. However, this process is not for the faint of heart and can require jumping through a lot of hoops, especially if you’re not acquainted with the responsibilities of a serious remodel in the first place. It’s important to spend time researching the home and its needs carefully before choosing to buy a condemned property.