If I walk away from my house but the bank refuses a deed in lieu of foreclosure, can I be liable if someone gets hurt on the property?

UPDATED: Feb 15, 2012

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If I walk away from my house but the bank refuses a deed in lieu of foreclosure, can I be liable if someone gets hurt on the property?

My bank says they can’t do a deed in lieu of foreclosure because there is a 2nd mortgage with a different bank. The debt has already been discharged in bankruptcy court and I’ve moved out of state. Can I mail the keys back to the bank and stop paying the home owners insurance and not worry about being sued if someone get hurt on the property?

Asked on February 15, 2012 under Real Estate Law, New Jersey


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

No, you can't do this.

You can't make *anyone*--including a bank--take ownership of or responsibility for your property. Therefore, you are still the owner of the property and so still responsible for any injuries or other damages caused by the property (for example, do you have an oil tank--if you do and it leaks, you would be responsible for the envirnomental remediation). If a bank or town forecloses on you, for unpaid mortgage or property taxes, that is different; foreclosure severs your ownership. But until and unless that happens, or you find someone who will voluntarily buy or otherwise take it, even at very bad (for you) terms, you are legally liable.

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