This is from Exhibit A, Section 2 “Acceptable Conveyance Condition,” from HUD’s Mortgagee Letter 2010-18.
Conveyance Condition is the condition that a foreclosed FHA insured property needs to be in before the bank can give it to HUD. There are a many things that need to happen for a property to be in CC that are beyond the scope of P&P, like a clear title. The following is what we are concerned with.
- Securing includes all doors, windows, other openings, fence gates when pool/spa is present, and the pool.
- Maintaining the lawn means the lawn has to be cut within the last 2 weeks and shrubs trimmed once in a growing season.
- Winterization should take place during the winter season which is October 1st through March 31st.
So essentially you are on the hook to provide bids for all damages, debris, and personal property. Just don’t miss a roof, mold, or anything else that would be expensive for you to repair at your own cost. Don’t think they won’t make you reroof a house that you didn’t tell them had a leak. It’s happened to me before. If you have employees make sure they know how important it is to take pictures of the roof everytime they are at the property and of all the ceilings when they are inside the property. So if any of your clients ask if a property is in conveyance, try to always find something so you can say no. Don’t be the one on the hook for it.