Category Archives: Landlords

Keep your rental filled and pick up a few more to spare.

Cook Eviction Stats Part 8: Lawyers and Juries

We’re talking about lawyers and juries and how they affect the eviction numbers today, along with some interesting data that I picked up along the way. This article is deviating a bit from the its predecessors in the series, in that I’m not going to be relying too heavily on the numbers I got from the Cook County Clerk. I’ve had to reach beyond to do some additional research. Instead of footnoting everything like I usually do, I will instead provided a bibliography of sources down at the bottom so you can read all of the reports at your leisure, if that’s your thing.

You can fit a couple of eviction hearings in the time it takes to cook Ramen.

You can fit a couple of eviction hearings in the time it takes to cook Ramen.

I want you to imagine a scenario with me for a moment. You are a landlord. A tenant moved into your apartment in October. It is now February and you have not seen a rent check since the first month. The tenant has moved in a whole crew of additional occupants, and a pit bull. They have also apparently spent their rent money on a big screen TV, because you can see it on the floor of their apartment, leaning against the wall underneath the big hole that it left when it fell down.

You filed to evict in after the 2nd missed rent payment, in early December, like any good landlord. Due to the wait and the holiday season, your court date was scheduled for early February. You arrive in court. You’re ready to tell your whole story.

Talk fast. You’ve got 90 seconds in front of the judge. You have to split that with the tenant if they decide to mount a defense. Better know your stuff. (more…)

Cook Eviction Stats Part 7: What does this mean for tenants?

I’ve spent the past 6 sections of this study focusing mostly on what the Cook County/Chicago eviction statistics mean for landlords. It’s time to focus a little on what they mean for renters. I’m not a lawyer, and I’m not going to tell you how to win your eviction case. There are far better resources than me out there for saving your bacon. This article is focusing on the numbers.

A lot of you have been involved in eviction cases.

7 out of every 100 apartments in Chicago will be the subjects of eviction cases each year. Given that apartments often house more than one person, this means if you’re a renter in Chicago, you’ve got quite a bit more than a 7% chance of winding up involved in an eviction suit.

This is what we're talking about here. It's undignified, it's obvious, and it's humiliating. And a lot of you have been through it before.

This is what we’re talking about here. It’s undignified, it’s obvious, and it’s humiliating. And a lot of you have been through it before.

By comparison, 8% of married Illinois residents wind up in divorce each year, according to the census bureau.[1] You probably know several people who have gotten divorced last year. This means that you may well know even more people who’ve been involved in an eviction case, although they’re probably not going to admit it to your face.

It costs a landlord quite a bit of time and money to file an eviction case. They’re not usually going to do it if a tenant hasn’t given them good reason to do so, and they’ve exhausted every other possible means of solving the problem. Eviction means they wind up with a vacancy on their hands, and usually one in worse condition than one where a tenant moves out of their own free will. However, if they’re gaining no income from a deadbeat tenant, it eventually becomes more cost effective for them to incur a short term vacancy.

There are a few basic things that a human being needs to survive. Food, water, air and shelter are the big ones. If you’re not earning enough money to remain in your apartment, there are plenty of steps you can take to get out of your lease before the court has to mandate that you do so. If a renter has allowed their shelter-related problems to spiral downward to the point of eviction, what does that say about their ability to prioritize?

This exists. It was mentioned in the New York Times. I don't even.

This exists. It was mentioned in the New York Times. What is this I don’t even….

Chances are good that you will get involved in partnerships with strangers at some point in the near future. It may be a business relationship, a roommate situation, or a dating scenario. Cook County makes it relatively easy for you to check if a person has been evicted before. Perhaps you should take a few minutes to for fact checking before you saddle yourself with a scrub.

You have slightly less than 40% chance of not getting evicted.

62.7% of filed eviction cases in Cook County wind up with the landlord getting the tenant thrown out of the apartment, with many of those cases tacking on an order to pay the back rent. It’s easy when looking at that percentage to envision the other 37.3% of cases involving renters proudly facing their landlords in court, delivering the smackdown of righteousness, and maybe getting their landlords slapped with fines for daring to drag everybody down to the 1st District courthouse.

This is not a picture of you in eviction court. Sorry.

This is not a picture of you in eviction court. Sorry.

I’m not saying that doesn’t happen sometimes.

However, those other cases could have had any of the following, less exciting conclusions:

  • The landlord and tenant settled out of court.
  • The tenant’s lease expired and/or they moved out before the court date.
  • The landlord accepted a partial payment of the balance due, and had their case thrown out.
  • The landlord forgot to show up for court.

Half of those causes are clerical errors, and will probably wind up in a re-filing of the same case at a later date. As for the other half? Well, the point of filing an eviction case is to get a tenant out of an apartment before the lease ends, and sometimes to force them to pay back rent. If those goals are accomplished in any other way, then the case doesn’t need to go all the way to its conclusion. I’d say less than 10% of the tenants who are taken to eviction court wind up “winning” their case at the point that they’re standing in front of the judge.

Even if you win your case, there are repercussions.

There’s been a recent trend with the weak economy where people just stop paying their rent or mortgage and wait for the axe to fall. Renters who are reading this series may be doing so with an eye towards this kind of strategic delinquency, hoping that the eviction proceedings will take long enough that things will turn around for them before the sheriff comes to call. Here’s the thing: your credit will recover in time from everything else you can do to it, but an eviction filing will follow you forever regardless of the verdict.

In all of this analysis, I’ve not really addressed one glaring issue: the fact that I could pull eviction statistics going back to 2004. In fact, if you visit the website of the Cook County Clerk of Court, you’ll find that you can search through online case records going back to at least 1991. In other words, some of those records are old enough to drink.

In order to find out about a low credit score, someone would need your permission and a lot of your personal data to pull your credit report. By contrast, if the state of public records access remains consistent, anyone and their brother can dig up that information without you knowing. That includes future potential roommates, landlords, business partners and employers. Yes, it’s possible for a researcher to see that your case was dismissed. But that’s because it’s possible for them to casually breeze through all of the details of your case.

Now, some of you will react to this with outrage at the courts for making the data public. However, the public records are available because the courts are paid for by the taxpayers, and we have a right to know how our money is being spent. If you want to avoid having the details of your eviction lawsuit made public, don’t get involved with one in the first place.

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  1. [1]US Census Bureau: Marital Events of Americans: 2009

Cook Eviction Stats Part 6: Forcible Entry vs Joint Action

There’s two different types of eviction cases that can be filed by a landlord in Cook County. One is called “Forcible Entry & Detainer,” and the other is called “Joint Action.” In order to explain the difference I’d like to take a moment to talk to you about Buffalo wings. This will make sense in a moment, I promise.

Chicken Evictions
just wings The Wings. The meat of the matter. What you’re really there for. Forcible Detainer & Entry. In other words, the landlord wants to get the tenant out of the apartment. This is the core purpose behind every eviction case.

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Cook Eviction Stats Part 5: Are eviction filings increasing?

The Chicago Landlord-Tenant ordinance has been amended many times since its creation in 1986. The most recent changes were in 2004, 2008 and 2010. By and large these changes have been in response to major trends in landlord-tenant behavior. For example, since 2010 landlords have had to tell their tenants the name and address of the bank where a security deposit is held. This was so that tenants could still track down their deposits if the bank foreclosed on their apartment building.

As is often the case with law changes, the general reaction to new CRLTO amendments has involved a lot of hand-wringing and fretting among landlords. Meanwhile, the economic troubles that have plagued our country in the past half a decade would theoretically cause more tenants to miss rent payments and get into situations that might prompt an eviction case. This nasty combination of tighter laws and a weaker economy made me wonder if the rate of eviction filings was getting higher or lower over time.

Evictions by Year: City and Suburbs (more…)

Cook Eviction Stats Part 4: Comparing Districts

How this article started

It is a peculiarity of American evictions that they are held at the county/parish level instead of at the city/municipal level as one might expect. This means that even though Chicago rentals are generally protected by Chicago-specific laws, evictions are handled by the Cook County District courts, of which there are six.

Cook County District Courts
District/Location Coverage
1st, Chicago City of Chicago
2nd, Skokie Northern Suburbs
3rd, Rolling Meadows Northwestern Suburbs
4th, Maywood Western Suburbs
5th, Bridgeview Southwestern Suburbs
6th, Markham Southern Suburbs

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Rent Bacon, January 2013 – New Format!

New. Improved. Actually Useful.

Rent Bacon, January 2013: 1 bed/1 bath rentals Chicago

The Rent Bacon index number is an indicator of how a district is performing compared to the HUD Fair Market Rents. Landlords can use it to figure out how much more to charge this year. Tenants can figure out how much more it will cost to move.

Welcome to the new Rent Bacon. As I explained last month, I’ve redesigned the Rent Bacon concept to be more comprehensive and more recent. I’ve spent quite some time over the past month thinking about the goals for this monthly series and I’ve got some really exciting results for you.

First of all, we will be rotating monthly through 1 bed/1 bath apartments, 2 bed/2 bath apartments, and 3 bed/2 bath apartments so that we hit all three of the most popular apartment sizes at least once a quarter.

Secondly, we will be looking at 3 month averages instead of one month averages in order to get a decent sample size in each of our zones.

Thirdly, and this is most exciting, the index is actually useful. The new Rent Bacon Index is a rough estimate for how much more the same apartment is worth this year over last year. This means that if you’re a landlord, you can use it to figure out how much to increase rents this year. If you’re a tenant, you can figure out how much more or less you can expect to pay to move to the same size apartment in the same area.

About The Graphic (more…)

Cook County Eviction Stats Part 3: Are other trials also biased?

When I started this adventure I based my concept of “a fair court system” on an ideal of 50% of cases won by the plaintiff (the landlord) and 50% won by the defendant (the tenant). Even something between 48-52% would have been sufficient. The results I got from the Cook County Eviction stats over the past 8 years indicated that 62.8% of eviction cases were won by the landlord. If I compared this to my idea of a perfectly fair system it clearly indicated a bias, and not the “anti-landlord” bias purported to exist by many Chicago landlords.

The world is not perfect. Neither is the justice system. I started wondering if my ideal 50/50 split of verdicts was even attainable outside of a courthouse run by androids and angels. What if the court system is structured so that 62.8% is as close as you can get to a fair trial in the US? I started digging to find out the verdict balance in some other types of cases.

Is it possible that the Cook County Eviction court is the fairest one of all?

Could Cook County Eviction court be the fairest one of all?


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Cook County Evictions Part 2: Yes, Virginia, there is a bias.

OK that was mean of me. I gave you a teaser at the end of Monday’s article, indicating that there was definitely a bias in the Cook County courts when it came to evictions. I even gave you a pie chart with the numbers intact but the categories redacted.

When I did my small-scale analysis in May 2012, I came to the conclusion that the system was biased when it came to money judgments but basically fair when it came to getting possession of apartments back from deadbeat tenants. Landlords stood to win their cases about 50% of the time, which is exactly what you’d expect to see in an unbiased system. However, once I obtained the large-scale data from 8 years of eviction history and crunched the numbers, a different picture emerged. This picture will allow us to temporarily put to bed the pervasive urban legend that the courts are biased against landlords.

That’s right. 222,323 cases were found in favor of the landlord. 131,423 cases were found in favor of the tenant. The division is consistent across all six districts and consistent regardless of if you filed for possession only, or for possession and money. So if you’re a landlord, you’ve got just about a 2 out of 3 chance of winning your case. So there. Ha.

Maybe Not. (more…)

Cook County Evictions Revisit Part 1: Intro

Returning to the Scene of the Crime

In May of 2012 I did a three part series that tried to debunk the urban legend that Chicago’s government entities are biased against landlords. I investigated the CRLTO and found it to be weighted heavily in favor of the tenant. I also investigated eviction proceedings using the Cook County Clerk’s website. Based on the information I used, I came to the conclusion that the courts were also biased in favor of the tenant. However, I didn’t feel too confident with those results.

I'm not doing so well in disproving the rumor that I count beans as a hobby, am I?

I’m not doing so well in disproving the rumor that I count beans as a hobby, am I?

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PSA for the Accidental Landlord: Profit is Not Guaranteed

The alternative of renting your home in a slow market has become increasingly viable in the past few years. I’ve worked with a number of buyers lately who have mandated that their new home be viable as a rental further down the road. Even though the market is improving, there are also still sellers out there who don’t want to short sell and turn to rental as an option. I call it “accidental landlording.” As one of the few Realtors in my office specializing in rentals I pick up several of these each year as referrals from my peers. With at least a quarter of the accidental landlords I meet, I have to have the following conversation:

Me: “Based on the current market, I’m thinking we could get $X per month for renting this property.”

Client: “But my monthly expenses are $X+500!!! We have to ask at least $X+600 so that I can turn a profit on this rental.”

Me: “I wish I could say it worked that way.”

Me, internally:

Logo from an indie film that failed to get funding. So Sad,Analogy Time!

So let’s say you’re 25 and you are living in Rogers Park without assigned parking. Poor you. You need a car, though, so you buy a little 5 year old Jetta second or third hand. You can parallel park anywhere and not pay too much. It serves your purposes. You have your brother paint it purple so you can pick it out in the mall parking lot. You cover it in bumper stickers. It’s unmistakeably your car, through and through.

10 years pass. You’re still driving that Jetta, but now you’re working for a catering business in Elk Grove Village, and you have two kids. You finally have to bite the bullet and give up your beloved compact. The folks in town don’t look kindly on your old John Kerry ’04 bumper stickers and there just isn’t room for your life in your car anymore. Back when you were 25 you never thought you’d be in this situation. You didn’t consider if the Jetta would suffice if you wound up in a situation where you had to haul a lot of stuff and small people around.

I had a lot of trouble finding pictures of VWs covered in bumper stickers. Lots of Toyotas, but not a lot of stickered VWs with an acceptable reuse license. VW owners don't like to share their pics.

I had a lot of trouble finding pictures of VWs covered in bumper stickers. Lots of Toyotas, but not a lot of stickered VWs with an acceptable reuse license. VW owners don’t like to share their pics.

A single-purpose purchase will not necessarily serve well when faced with new tasks. The more something is customized, the harder it is to make it change gears (pun intended).

The same thing goes for your home.

Why did you buy your home?

If you’re currently a homeowner, chances are that you didn’t give much though to the rental value of your home when you bought it. You might have thought a bit about resale value, but not about whether or not it would make a good apartment. Likewise, if you took out secondary loans on the property you probably didn’t think about having some poor renter cover that cost on your behalf further down the road.

You probably considered how you could customize the house, the caliber of the kitchen appliances, the color of the wood floors and the size of the yard. You ensured it would suit your particular needs for light, space, and storage. You thought about whether it fit within your monthly budget. You probably didn’t consider whether or not it would generate positive cash flow 8 years later.

There’s a lot of investors out there who won’t purchase a property until they’ve analyzed whether or not it will generate positive net cash flow. They think about what will appeal to the largest number of renters. How long those renters will stay. The cost of gas to drive back and forth to the property. The breakdown rate of the appliances. The value of parking spaces. The depreciation. And when it comes to apartments, there are more owned by investors than by “accidental” landlords. Investors set the market rent rates.

A purchased home should be like the cast of "Star Trek" - very good at playing their specific roles.

A purchased home should be like the cast of “Star Trek” – very good at playing their specific roles.

Meanwhile, a good apartment needs to be like the Saturday Night Live cast: able to do a decent impersonation of any type of home for a short period of time.

Meanwhile, a good apartment needs to be like the Saturday Night Live cast: able to do a decent impersonation of any type of home for a short period of time.

Going back to the car analogy, let’s suppose you tried to lease your 10+ year old Jetta for $180 per month when you were done with it. Laughable, right? Who on earth is going to sign a fourth hand lease on a heavily customized car? And who on earth is going to pay the same for it as they would for a new 2013 Jetta at the dealer?

Why should you expect that your home, bought for and customized to suit your needs, will work well when repurposed as a means of generating ongoing income?

Agents Can’t Force the Market.

If I’m trying to list your home as a rental, I want to list it for as high a rent as I can possibly get. I’m working on straight commission here. Your profit is my profit. However, “possibly” is the real operative word in that first sentence. If it’s priced too high, your home will not rent. Nobody will even see the ads.

Most renters don’t care about your monthly expenses. The general opinion of a landlord is that they’ve got bottomless pockets full of money, especially if they own a fancy condo with granite counters and stainless steel appliances. After all, you have two homes and they have none.

If I deliver a number that’s lower than your cost of ownership, the question should not be “can I find some idiot renter who’s willing to pay $500 over market rates.” After all, that type of renter is not likely to remain financially solvent for long in any respect, and an insolvent renter is a renter headed for eviction court. Rather, the question should be, “which will cause less damage to me in the long run?”

Short selling your home has its problems. It affects your credit, your tax returns, your buying power, and your self esteem. You may face long market times. You’re at the mercy of the banks. Renting frees you from all of that. For some it may be easier to write off a $500 loss each month than a $300k loss all at once. The market times will probably be shorter. The banks don’t have to get involved.

However, renting doesn’t free you from the property itself, and you may find that dealing with tenants and the Chicago rental laws for a year is far worse than dealing with a bank for 60 days on a short sale.

The better approach is to expect both the sale price and the rental price quoted by your agent to be below what you paid for the property, especially if you bought in during the 2000’s. Rather than weighing just the money values, think first as to the benefits of the entire scenario before making your decision.

Could the scenario from ‘Rent’ really happen in Chicago?

The musical “Rent” was a seminal piece of theatre for me and a lot of my peers when we were in college in the 90’s. For many of us, it colored our perspective of landlord-tenant issues for years to come. The actual plot of the musical doesn’t really depend on the apartment issues – the characters could have the same conflicts and growth without the framing device of the rent scenario that gives the show its name. However, as a framing device to drive urgency and establish the setting, the choice to focus all of the action around a particular apartment building in New York serves as effective shorthand for establishing a villain and the low-income, counter-culture status of the main players.

Today I want to take a look at the various problems in the landlord-tenant relationship and living situation portrayed in “Rent” from a perspective of the Chicago market. Is there any way that this could come to pass in Chicago? How can it be avoided? What parts of the assorted conflicts do we take for granted as likely to occur in a renting situation, and how can a landlord structure their business to keep it from arising?

Before we get started, though, I want to see how far we’ve come since you started reading this blog. If you’re familiar with the plot of “Rent,” see how many potential problems you can identify if those people were renting in Chicago. If you’re unfamiliar with the show, I’ve included a video of the final Broadway cast performing the first 7 minutes, which should give you a good idea of what’s happening. Then come on back and we’ll go through them together.

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