Month: February 2022

By Robert L. Cain, Copyright 2022, Cain Publications, Inc.

We have had problems with my tenants’ refusal/difficulty vacating the rental unit after the lease term has expired. We have told them well in advance that we will not be renewing the lease, but they still will not leave at the designated time. HELP! What do I do to get them out? At this point, isn’t this considered trespassing? How do I get them out? Am I able to lock them out of the dwelling? Thank you for your advice on this matter, Jane Jefferies

Every once in a while landlords have to deal with people who seem to be unable to rent the U-Haul and get their stuff somewhere besides their ex-landlord’s property.  Usually, those who are not wanted have the good sense and grace to move out.  Apparently, these folks have neither good sense nor grace.  You are in a position to make their renting from another landlord extremely difficult by providing an accurate reference when a prospective landlord calls you for a reference. This offense ranks right up there with a midnight move-out owing two months’ rent. 

In the meantime, however, to protect yourself from the court system that consistently comes down on the side of tenants, take some specific steps. It doesn’t matter if the tenants are good, bad, or somewhere in the middle; courts in many places go out of their way to protect tenants from those “evil, greedy, uncaring landlords.”

Those tenants are trespassing, but you would have no luck with the police having them removed since police don’t want to get involved in a “civil matter.”  That is in spite of the fact that these people are in the property stealing the rental because you can’t rent it while they are occupying it. Besides, the police officers would have to write long reports about what happened, something that, trust me, they hate to do. 

You will have to file an eviction against these holdover tenants. One step that might persuade these squatters to move immediately is that you inform them that you are going to file the eviction at the courthouse the next day if they have not vacated.  This is a slam-dunk eviction since they had been notified, presumably in writing, that they were to vacate at the end of the lease.  Big warning! If you did not notify them in writing, you will have to begin the process all over again. Otherwise, the judge would throw the case out of court since you have no proof that you told them you were terminating their tenancy. Check the procedure for starting the procedure in writing below.

Do not, under any circumstances, ever, even think about locking them out until you have the judge’s order in hand evicting them and a deputy sheriff or constable to serve the papers.  Locking them out is called constructive eviction and is illegal in every state.  Likewise, don’t take the front door off, turn off the heat or electricity.  Anything you would do to make living in the property difficult or impossible is considered constructive eviction and would result in a judge ruling letting your tenants live rent-free for several months.

If your “notice” that you would not be renewing their lease and they were going to have to move was oral, it is not valid.  Here’s what you have to do.

Send a notice in writing, according to the laws specific to Chicago, where your property is.  Laws are different in every state and in some cities, so do not under any circumstances use a form you find at the office supply store.  Those forms are generic and dangerous, and probably comply with few state laws or city ordinances and almost certainly not the ones where your property is.  Get a form from your local apartment or rental owners association, or from an experienced real estate attorney. If you use the wrong form, your tenants could end up staying rent-free for three months.

Make sure you give adequate notice, whatever that is in your area.  Most state laws are for 30 days, but check to make sure.  Also, make sure the procedure for serving the notice.  Can you mail it Certified Mail?  Can you send it First Class Mail?  Must it be hand delivered?  Must it be served by a process server?  If you don’t do it right, once again your tenants get to live rent-free for a couple or three months.

Finally, do not accept any rent from these tenants during this debacle.  If you accept rent from them, you have confirmed their tenancy and must begin the process all over again. 

These tenants will get out soon as long as you do everything exactly correctly. As I said before, the courts are there to protect tenants, not landlords.  With each step, you take to get rid of these undesirables, keep that in mind.  Your final reward will be when you get a call from another landlord asking for a reference.

By Robert L. Cain, Copyright 2022, Cain Publications, Inc.

PROPERTY NEWS SERVICE

Americans are “hoarding money,” reported the Wall Street Journal January 13. “Worried about their health, their jobs and the prospect of a deep recession,” they socked away money and “amassed record savings levels.” I’m not certain what Americans the Journal was describing, but it certainly was not the average person.

Meet Joe. Joe couldn’t be more average. He and Joan, his wife, are 38 years old and earn the median $51,383.18 a year net in salaries. Also right at the average, they spend $61, 224 a year. Trouble is, with expenses exceeding their incomes every month, they go farther in the hole, scrimping and running up their credit card debt.  They would love to save money, but can’t figure out how. They hope a big tax refund will help pull them out of debt. Forget about saving anything. They just want to get somewhere approaching debt-free.

During COVID, they got the opportunity to spend less with Joe working from home a lot, not having to buy so much gas, and eating lunch at home. Beginning February 2020, Americans’ savings rate jumped over 30 percent. COVID was to blame, as people curbed spending and stockpiled cash but left Joe out of the equation. Some of the savings went to retirement funds which now have an average balance of $255,200, not enough to retire on but a good start if you’re 40. Joe just wishes he could save into his retirement fund more than his company pays.

Average Joe has company in his lack of savings. Statista reports that 81 percent of people have less than $5,000 in savings. Mostly that 30 percent increase in savings was from people earning more than the average person. From people with higher than average incomes or lower expenses in 1990, gross private savings in the US went over $1 trillion for the first time reaching $1.14  trillion. It reached $4.72 trillion in 2019, far more than the rate of inflation which would have amounted to $2.13 trillion.

Joe lands smack dab in the middle of average of 48.5 percent with a high school diploma and a couple of years of college. He dropped out to earn money.  During his short college career, he accumulated student loan debt amounting to almost $39,000, just about average and that he still pays on. He has more student loan debt than credit card debt, also just about average. No wonder Joe can’t save a dime.

The savings aren’t spread evenly. The average American household has saved $41,700, a misleading number. A more accurate and telling measure, the median savings are only $5,300 which means half of the people have $5,300 or less in savings. Joe joins the 55 percent of the population that couldn’t survive more than four months without income if he lost his job. He’d have to deplete his minuscule retirement fund to survive then find a way to pay the taxes on it.

One place Joe isn’t average is his credit score. The average FICO score, reports Experian, is 711. What with having to skip payments occasionally and worry that his car might be repossessed because of missed payments, declined credit cards because of missed credit card payments and that he might be evicted because of late rent payments, Joe’s credit score is 625. He teeters on the edge of insolvency every month. The stress and credit score are killing him.

Joe rents a house but the rent keeps going up and he has been late with the rent six times in the past year.  With the eviction moratorium over, he is afraid to open his mail from the property management company. It gets worse. Rents are increasing more than 30 percent in some cities making living too expensive for even ordinary people like Joe who have stable jobs and questionable credit. With the lack of available housing, landlords can be just about as restrictive as they want in their rental requirements. Joe needs to move and might be forced to get “creative” in the information he puts on his rental applications and the documents he presents.

He’s not alone. Snappt reports that 12.2 percent of rental applications contain fraudulent information.  Joe will have to resort to document fraud to even get a landlord to consider him. With his credit score at 625, he is competing with applicants with average or better scores. The house where Joe and his family live is a place he can be proud to live in. He won’t be so proud of where he ends up after he is forced to move. Worse yet, if the landlord discovers his fabrications, he’ll have to move again immediately for lying on his rental application.

Then there’s Joe’s job. He’s worked there for five years and his present home is a ten-minute drive to work. When he has to move, chances are the drive will be much farther and thus harder on his car. If the car breaks, Joe might not have the money to fix it considering that 44 percent of people find themselves unable to come up with even $400 in an emergency, reports debt.org.

Those who should know keep talking about how people are doing better than ever with savings growing and wages increasing. They talk about the pent-up demand for spending and the inflation that results partly from increased spending. Rarely mentioned are the “average” people stuck in the middle, just trying to get by and hoping nothing so much as an unexpected $400 bill shows up.

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