Tag Archives: lease expiration

Dear Piggy: I lost my apartment! What do I do?

An apartment is never yours until the day you move in!

I recently received emails from a couple of beleaguered old friends who know that I work in the rental market. Names of the senders have been changed, naturally.

I’ve been away for the summer and my apartment lease is expiring at the end of the month. I warned my landlord that I would be out of town for a few weeks. While I was gone, the my lease renewal deadline came and went, and now my apartment has been rented out from under me! What can I do? — Sheila P.

And here’s the second one:

My boyfriend and I just rented our first two bedroom apartment together, but when we called the landlord to schedule key pickup we were informed that the current tenant is in jail! The apartment will not be clear in time for us to move in, and there’s no way for anyone to know how long it will take to clear the place out. We searched for weeks before we found this place. What do we do? –Marcus R.

A sad day for all. There’s nothing so frightening than having your current or future home yanked out from under you. A successful apartment move has many points of failure. Tenants tend to forget that apartment housing is a temporary arrangement, and that even a signed & fully-paid lease is subject to multiple contingencies. If you’re in a situation similar to Marcus or Sheila, read on to find out your options.

Analogy Time!

Go forth and shelve righteously, Librarian Repossession Brigade! [photo from 2011 Madison, WI protests by Madison Guy]

I got lucky today. I had a debt of just over $75 forgiven by the Chicago Public Library as part of their “Once in a Blue Moon” amnesty program. An overdue library book is a low-stakes version of Sheila’s situation. It is made very clear to us when we borrow the book (or apartment) that we will have to give it back. The date when we will have to do so is also made very plain to us. When that time passes, we can either bring the book back so that others may use it (move out), or keep it to ourselves and rack up fines. The only difference is that the library is not going to send the librarian repossession brigade to forcibly recover the books from our grubby little hands.

Even if Sheila had forgotten her precise lease expiration date over the course of the year, she probably remembered vaguely when she moved in, and probably had a pretty good idea of when her lease was going to expire. She probably assumed that the landlord would allow her to go month-to-month after the lease expired, or maybe she had an inkling of when the renewal offer would arrive and it just slipped her mind with all the travel.

Now, the landlord did the right thing by sending a paper renewal offer. A renewal, once signed, is as binding of a contract as the original lease, and a verbal renewal means a month-to-month agreement. However, in this day and age one would think that an emailed renewal as a PDF attachment would be just as effective. One would also think that the landlord would have called Sheila to warn her when her place went on the market, but this information could well be in the renewal letter itself. Under normal circumstances Sheila would have at least had a warning that the unit was being shown, as advance notice from the landlord would be required before any in-person showing. These days, though, an apartment can rent via video tour without the new tenant ever setting foot in Chicago, let alone entering the actual unit. The scenario, while obnoxious, is possible.

Sheila’s Options.

This is a situation where someone is going to get hurt and probably lose some money. The best possible option is the one that causes the least damage to the fewest people. Technically she had equal responsibility with her landlord for ensuring that she still had a place to live after her lease expired. Just like the library “due date” card, the start and end dates on her lease were clearly stated. The landlord has made it clear to her in writing that this scenario could occur.

Option 1: Move out.

If she goes, she needs to find a new apartment or a friend to crash with very quickly. This is obviously a very expensive and inconvenient option, but if the landlord is that uncommunicative it might be for the best. I wouldn’t recommend taking this route unless there’s no other recourse, though.

Who loses out? Two people: Sheila has to move, and the landlord has to incur the expense of turning over the apartment.

Option 2: Holdover.

Lack of communication only serves to narrow your options.

If Sheila does not get an agreement from her landlord to permit her to stay past the end of her lease, and then stays put, she’s now into what’s called a holdover situation. The landlord would have to get her evicted via the court system, a process that could well take months. However, Sheila should be aware that most Chicago leases have a holdover clause in the event of just this sort of situation. It usually reads something like this:

Tenant agrees that in the event Tenant fails to vacate and surrender the Premises upon termination of this Lease or Tenant’s right of possession of the Premises that: (1) Tenant shall pay as liquidated damages for the entire time that possession is withheld a sum equal to the greater of (i) three times the amount of rent herein reserved, pro rated per day of such withholding, or (ii) Landlord’s actual damages if same are ascertainable;

So basically, Sheila’s rent just tripled. And she’ll have an eviction on her record if she stays on without permission. As much as it would be tempting for Sheila to give back the same lack of communication that she received from her landlord, I’d also recommend that she avoid this particular option. Eviction records last a very long time.

Who loses out? All three parties: The new tenants lose the apartment, the landlord has to evict, and Sheila has to pay 3 times the rent and deal with the judgment on her record.

Option 3: Explain and Negotiate

Both parties are kind of in the wrong here. Sheila was lax in not paying attention to her lease expiration date. The Landlord was also in the wrong to not reach out to Sheila when he didn’t received a reply from her and theoretically knew she was out of town. Sheila should also know that the landlord is going to incur a considerable cost by turning the apartment over, even if the new tenant moves in on the same day that Sheila moves out. Both sides have something to gain from talking this out, as long as they can do so calmly.

My thought is that it’s in Sheila’s best interest to send a polite, non-accusatory letter to the landlord explaining the situation and offering to stay on at a rate that matches the new tenant’s rent. She should point out the potential for saving money. The letter should seek a win-win goal.

If the landlord has multiple apartments or friends with apartments, it’s possible that he may be able to shift the new tenants to another space. Yes, it’s annoying for the new tenants, but the landlord if he’s good will get two leases for the price of one and will get to retain a (probably very grateful) tenant.

If the landlord has just one unit, the new tenants are in for a shock much akin to what Marcus is going through, but there’s a very good chance that the they had several backup choices in mind. Even if a lease is fully signed by all parties and the deposit has been paid, it is still contingent on the landlord being able to deliver the apartment on the first day of the lease. Tenants, I hate to say this, but the apartment is never fully yours until the day you move in!

Who knows, it’s also possible that the landlord forced the new tenant into an earlier lease start date than they actually wanted.

Who loses out? The new tenants, and even then only in terms of time. They will get their deposit back, and there are other apartments. Unless this problem is discovered on moving day, chances are that any damage to the new tenants can be contained and the financial loss will be minor.

All told, option 3 actually causes the least harm, if it can be negotiated calmly and fairly without invoking the demons of the court system and the BBB. Of course, this puts the new tenants in a situation very similar to that of poor Marcus.

Marcus’ Options.

This is really a book. I kind of don’t want to live on this planet anymore.

At the other end of this spectrum is Marcus, who is probably thinking all kinds of mean things about his landlord and sticking little pins into the voodoo doll of the jailed, outbound tenant. After searching high and low with his partner and viewing about 15 apartments, they were so happy to finally find the one they wanted. And now it won’t be ready, there’s no ETA as to when it actually will be ready.

Option 1: Sue anyone and everyone.

The landlord had no right to advertise the apartment for rent! The landlord has a binding contract with Marcus! The landlord has to give up the apartment right now! Sue the family of the current tenant! Sue anyone involved in this whole mess!

Yes, Marcus can do this. Let’s go to the CRLTO, section 5-12-110(b) for proof.

Failure to Deliver Possession. If the landlord fails to deliver possession of the dwelling unit to the tenant in compliance with the residential rental agreement or Section 5-12-070, rent for the dwelling unit shall abate until possession is delivered, and the tenant may:

(1)     Upon written notice to the landlord, terminate the rental agreement and upon termination the landlord shall return all prepaid rent and security; or

(2)     Demand performance of the rental agreement by the landlord and, if the tenant elects, maintain an action for possession of the dwelling unit against the landlord or any person wrongfully in possession and recover the damages sustained by him.

If a person’s failure to deliver possession is wilful, an aggrieved person may recover from the person withholding possession an amount not more than two months’ rent or twice the actual damages sustained by him, whichever is greater.

Marcus can terminate the lease, or he can “maintain an action for possession.” That means suing, kids. And he can sue the landlord or the person wrongfully in possession.

Suing may make Marcus feel better, but it won’t get him into the apartment any faster, and will probably take up valuable time that could be spent looking for a different apartment.

Option 2: Go in and remove all of the current tenant’s belongings yourself.

This is also known as “breaking and entering,” or “trespassing and theft.” NO. Just. NO. Unless Marcus wants to get up close and personal with the outgoing tenant in jail – as a cellmate – NO.

Option 3: Wait for the apartment to be ready.

Under some circumstances a holdover situation could be cleared up very quickly. I’d imagine that the family of the jailed tenant does not want to be liable for triple the rent. Provided they can be found quickly and are responsible sorts, the apartment could very well be ready in a week or so. If Marcus really has his heart set on that apartment and only that apartment, it may be worth the wait.

If Marcus takes this option, the landlord may be able to assist with either storage of the furniture or a hotel, and should definitely waive the rent for the time that the property was unavailable. A former client of mine with multiple units offered a spare empty apartment in the same building for a couple of weeks when a similar situation arose due to the death of an outbound tenant, and then had his own workers shift the incoming tenant’s stuff into the real apartment once it was cleared.

Option 4: Find another apartment FAST.

There’s a fifth option but it involves some wibbly wobbly timey wimey stuff that is way beyond my pay grade to explain here.

It’s no secret that there are always apartments available in Chicago, and many of them are available to move into today. In a pinch you can always find a space. It may not be the dream apartment you’ve been waiting for, but it’s at least something. On the plus side, if it’s available for immediate move in you know for certain that it’s already empty!

This exact situation is why I will always sign my renter clients to representation agreements that run for about two weeks after their lease begins. Just in case something unforeseen happens and they cannot move in, I want to make sure they know that I can and I will find them a replacement immediately. I’ve done several rentals to folks who had the U-Haul sitting out front as we signed the paperwork.

This option does come with two warnings. First, Marcus must make sure to notify the first landlord in writing that he intends to terminate the agreement. Second, in the rush to find a backup apartment do not forget to do some research on the replacement landlord.

Have you ever found yourself in either of these predicaments? What did you wind up doing? Tell us in the comments!

The Accidental Landlord’s Guide to Lease Renewals

If you are like many of the landlords I’ve worked with in the past 12 months, you’re pretty new to this whole rental thing. You found yourself unable to sell your home for a price that was worth the effort, so instead you are offering it to tenants for the time being. Meanwhile, if you’re a regular reader you’ve seen what’s happened to Chicago rent rates over the past year and are wondering what to do to maximize your return on investment. As you approach the end of your first lease term with your first tenants, here’s a timeline you can use to handle the renewal offer, and if necessary, the re-renting of the property. It will give you plenty of time to make plans if your tenants decide to leave, while staying within the bounds of the Chicago Residential Landlord Tenant Ordinance. This guide assumes that you are a private landlord, not living in the same building with your tenants, that your tenants have been on a lease for over 6 months, and you want to keep them on a lease rather than going month-to-month. (more…)