Can You Avoid a Landlord-Tenant Lawsuit? (A Quiz)
Can You Avoid the Lawsuit?
So you're thinking of becoming a landlord, or maybe you are one already. Are you ready to avoid the pitfalls of owning rental property in Chicago? This is one in a series of quizzes for landlord that will test your ability to avoid potential lawsuits and fines.
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You own a three-flat with a garden apartment. Historically you have not allowed pets. Your tenant in the garden unit is a single guy who works the night shift. He's been on your case for months now about noise from the tenants on the first floor, and has harassed the upstairs tenants repeatedly to try and "solve" the problem on his own. The first floor tenants are moving out. The good news is that you have a choice between three new prospective tenants who have applied to fill the vacancy. Which applicant do you choose?
Single mom moving out of her parents' home for the first time. She has a credit score of 740 and two kids, ages 4 and 8.
Visually impaired woman, age 50, on disability. She has a credit score of 620. She has a seeing-eye dog.
An unmarried couple in their 20's. He's a busboy and she's a bartender. They both have credit scores in the 500 range.
Question 1 Explanation:
Turning down the single mom may risk a fair housing lawsuit, but accepting her will mean more of the same problems with the downstairs tenant. If the downstairs guy threatens her you'll still wind up with a lawsuit. Accepting the unmarried couple with low credit opens you up to fair housing suits from both of the other applicants. While accepting the tenant with the dog requires you to bend your no-pets policy, it does keep you in compliance with the ADA and minimizes your risk of annoying the guy downstairs.
You receive a frantic call from a tenant in your Rogers Park building. It is 2am and there is water pouring down into her bathroom from the apartment upstairs. You listen at the door of the upstairs unit and hear water running in the bathroom. You knock loudly, announce your intent to enter, and go in to find the tenant passed out drunk in the tub with the water running. What do you do?
Turn off the water, drag the tenant from the tub to his bed where he belongs, drain the tub and go home.
Turn off the tap, cut off the hot water supply to the apartment so the tenant can't do this again, call your insurance provider to report the claim.
Call 911, turn off the water, drain the tub and mop up what you can, then go downstairs to help mitigate damages to the lower apartment.
Question 2 Explanation:
If you drag the tenant to his bed and he subsequently dies from alcohol poisoning you'll face a negligence suit from his next of kin. If you cut the hot water supply you'll be violating the CRLTO. While nobody wants to get the authorities involved, this situation has the health of your tenant and the health of your building on the line. Make sure you tend to the needs of all of your tenants equally.
You are in the process of refinancing your mortgage on your six flat in Hermosa. You've waited 50 days for the appraiser to arrive. You're planning on showing him your vacant unit but on the day of the appraisal you find that the lock has frozen shut. On your way into the building you run into one of your tenants. He is friendly to you but you know that his apartment is a mess and that he smokes a lot. Which apartment do you show the appraiser, since you can't get into the vacant unit?
Reschedule with the appraiser for another 30 days out when you can show the empty unit.
The apartment of the nice interior designer who lives on the 2nd floor. You know it looks just about perfect.
The messy tenant's apartment, after checking with him if it's OK to enter.
Question 3 Explanation:
While it means a long wait, the only good answer here is giving the appraisal a pass for today. Showing the messy unit, while it probably won't result in a lawsuit, could have a detrimental effect on your appraisal value. Showing the clean unit without giving prior notice to the tenants definitely opens yourself up for a lawsuit. It's critical to remember that you're dealing with other people's lives and property when you're going in and out of apartments. While it may mean that you deal with a higher interest rate for another month, better to pay the extra couple of hundred dollars than to deal with a lawsuit or lose the chance to refi altogether.
Your condo association has decided that in order to improve curb appeal, window air conditioners will no longer be permitted in street-facing windows. You're renting out your top floor condo, which has west-facing, street-adjacent windows that pile on the sunlight in the afternoon. Without window ACs, the rooms will easily top 110 degrees in the summer. What do you tell your tenant?
The tenant can safely ignore the condo association. After all, they're just leasing the unit, they don't belong to the association at all!
Offer to go half and half on a portable rolling air conditioner that can be unobtrusively installed in the street-facing rooms.
Suggest that the tenant get light-blocking curtains and use other rooms of the apartment during the hottest days of the summer.
Question 4 Explanation:
Tenants are subject to the bylaws of the condo association just as if they were owners. If you tell your tenant they are exempt, the association may fine you or sue you for non-compliance. If you're depriving the tenant of the ability to use part of their apartment for part of the year, then you are lowering the value of the apartment. AC is not considered an essential service in Chicago, but a 110 degree apartment is definitely a health hazard. They'd be within their rights to break their lease, withhold rent, or sue for damages. Splitting the cost of an unobtrusive replacement rolling air conditioner is the best course of action here. It will keep the association happy and allow your tenant to retain use of their entire apartment.
You have inherited your grandmother's 8 unit apartment building upon her death. You've been assisting her with running the place for several years now and the tenants all know you. The rents are low and you think you can do better to make the building profitable, so you decide to keep it. What steps do you take?
Next time you see the tenants, tell them that your grandmother has passed on and you're taking over the building. Politely ask them to make rent checks out to you from this point forward.
Send out new leases to everyone in the building with fair market rents, requesting that they sign or move out within 60 days.
Send a letter to all of the tenants explaining the situation. Let them know your full name and contact information, the name to make out the check, and what has happened to their security deposits.
Question 5 Explanation:
Leases don't just terminate when the landlord dies. They run with the building and are passed over to the next owner. If you want to get the tenants to pay fair market rents you'll have to negotiate that when their lease expires. Some leases have provisions that allow termination of leases with 60 day notice when an apartment building changes hands, but enforcing those clauses can be difficult. No matter how friendly you are with the tenants, written notification is required when you assume ownership of their building. Be as polite as you like in explaining the situation, but make sure that letter is in their hands within 14 days of the title transfer.
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Answer Choice(s) Selected
"Lawsuit guaranteed! Take some time to read up on the issues before you go any further into Chicago rentals."
"Needs work. You'll get better with practice, but in the meantime please consult with an attorney before you take action."
"Not too shabby! You've probably read through the RLTO a few times but haven't had much chance to deal with landlord-tenant issues hands-on. Try joining a local landlord association to trade real life stories and scenarios."
"Nicely done! You're a pro at this. A few missteps along the way but I'm sure you're probably kicking yourself over that one question you got wrong. Don't worry, better to get it wrong here than when you're face to face with a tenant, right?"
"Perfect job! Brag to all your friends that you got them all right! (But not to your tenants. That would be a bit gauche, don't you think?"