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Conveyance condition is the required condition and status of a property necessary for HUD to take the property into their inventory and control.
Many companies “enhance” the meaning of conveyance condition but as per HUD Guidelines, for a property to be in Conveyance Condition the following items must be completed before conveyance:
For a property to be in Conveyance condition, HUD requires:
• If conveyance is during grass cutting season, the grass must have been cut within two weeks of conveyance. (varies by state)
• Mortgagees are to remove materials considered unhealthy or hazardous are to be removed 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 occurred, 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.
• The property is free from any damage, other than that due to mortgagor neglect/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.