10 Situations You Should Plan For as a New Chicago Landlord

Cartoonstock.com cartoon - worst case scenarioMost new landlords think through the steps involved in finding a tenant, but they rarely plan on what to do in the event that a major catastrophe or minor disturbance alters the flow of the occupancy. After 7 years in the rental market I can attest that every one of the 10 items on this list has occurred, sometimes on multiple occasions. I'm not going to tell you what your contingency plans should be, although I have served as a sounding board before in helping landlords hash out their worst case scenarios.

In all of these cases make sure that you know the city laws about what you can and cannot do, have contacts handy in your files who can handle the repairs, and know what your timeframe and potential cost will be is to resolve the issue. Make sure you've taken all the necessary preventive measures to keep these situations from occurring, without hindering your tenants' ability to live comfortably in their apartments. Figure out what insurance will cover. Figure out what your liability limits are. Having a plan in place will help you to keep your head about you and your wallet close to intact in these admittedly stressful scenarios.

Photo of fire damage caused by a space heater

Fire damage to a Florida apartment caused by a space heater.

1. Fire that damages a unit. 90,500 apartment fires break out per year in the United States. In 2010 that came to 440 deaths, nearly 4000 injuries and over $1b in property damage. (Source: [1]) 36% of all US fires in 2010 were to some sort of building, as opposed to wildfires, dumpster fires, cars, etc. (Source: [2]) Regardless of if it's a small grease fire that can be extinguished with a kitchen fire extinguisher or a space heater that arcs on an overloaded outlet, it's always possible that one of your apartments will be damaged by fire.

Skyline shot of Chicago apartment building on fire

3 alarm fire at 885 W Cornelia, summer 2011

2. Fire that destroys the building. A single apartment on fire is one thing. Losing an entire wing full of apartments, or worse, seeing your property condemned due to fire, is an absolute disaster. This is, oddly enough, one of the few scenarios that new landlords will actually plan for as it's a pretty extreme "what if."  Fires are tricky things to contain. A careless neighbor, vagrant or neighboring pizza place could take out your building. Make sure you've planned for fires both big and small.

3. Theft from the property. This is Chicago, and as we've discussed, there is no such thing as a safe neighborhood. Things get stolen. Whether it's something small like a laundry room detergent kidnapping, a bike from a storage room, or a break in with multiple items missing, you need to be aware that it does happen. Make sure your maintenance staff is clean and properly background checked on a fairly regular basis before you send them into your tenants' homes. Make sure your apartment locks get changed between tenants, as required by Illinois law. Figure out a plan of attack and remember that landlords' insurance plans rarely cover the cost of replacing tenants' belongings. That's what renter's insurance is for.

Graffiti on a Chicago wall

Jogging!Blago. It's funny until it happens on your wall.

4. Graffiti on the building. Tagging isn't just for gang-disputed territories. It happens citywide on any surface that's likely to get a lot of eyeballs on it. Property with plenty of eye-level flat surfaces and property in plain sight of the El are the most likely places to invite graffiti. Anticipate where on your building might be appealing to budding "artists" and figure out if you can either prevent the tagging or repair the damage quickly when it occurs, without harming your masonry. Learn to recognize the difference between gang tags and normal wall art - one's a lot more complex of a problem than the other for obvious reasons.

5. Overflowing bathtub or toilet. There's no polite way to put this. [Beep] happens, and rarely in a pleasant way. Pipes can get blocked up with artificial or biological waste, and tenants have a habit of reaching for the Liquid Plumr right off the bat, even when a quick plunge or snaking would be less destructive to the pipes and to the environment. If a drunk tenant passes out while filling the tub, or toilet gets backed up, or the tenants pour too much grease down the kitchen sink you could wind up with an overflow that takes out their floor, the downstairs neighbor's ceiling and possibly more. I remember one sink flood on the 6th floor of a high rise that melted the supporting drywall of the bathroom medicine cabinets for the 3 stories below before they finally stopped the gushing pipes.

6. Tenant death. If people are going to live in your apartment they may also die in your apartment. Figure out what you will do if they die on site. Think about how you would handle their belongings and family access if they die in the middle of their lease regardless of the location. Figure out what you must disclose about the situation to subsequent tenants - there are laws about that kind of thing. Check in on your elderly tenants and those who live alone. Make sure to have emergency contact info for all of your tenants.

What's more frightening, too many clowns or too many tenants?

7. Tenant wants to get a roommate. (Or tenant sneaks their girlfriend/boyfriend into the apartment.) This happens a lot. One tenant on the lease, 2 people or more in the apartment. In this era of stringent background checks and rising rents the only way some unemployed renters are going to find housing is by sneaking in to their friends' apartments. If you're lucky you'll be introduced or the existing tenant will ask what the roommate policy is. If you're not lucky you'll find out when they move out that your studio apartment has been the home to four guys working shifts at Denny's and two of their pothead girlfriends.

8. Tenant wants to get a pet. (Or tenant gets a pet without permission.) If your condo building says no dice on the pet situation, then the answer is clear - no pets, not your fault, so sorry. However, if a tenant decides midway through their stay to adopt a pet and you've not set a clear pet policy, you may wind up with a four-legged tenant or two. Many shelters call a tenant's landlord to confirm pet policy before they will allow adoption, but there's no stopping a tenant from giving a false number. There's also no way to control a tenant who brings in strays or feral animals from the alleys, nor vet techs who wind up fostering as part of their job. Also give some thought to medically necessary companion animals. They must be allowed, so regardless of what your stance is on pets in other situations, make sure you've made room for them in your plans.

9. Domestic violence or sexual assault on the property. I'll give you a crib sheet on the law for this one - it's called the Illinois Safe Homes Act and it allows tenants who are survivors of domestic abuse and/or assault (or threatened by it) in their apartments to terminate their lease without penalty. A landlord cannot reveal to subsequent landlords if a tenant invoked the Safe Homes act to terminate their lease. If you don't think it will happen on your property, check out some numbers quoted verbatim from the American Bar Association's survey of Domestic Violence (visit the survey for sources):

  • As of 2000, approximately 1.3 million women and 835,000 men were physically assaulted by an intimate partner annually in the United States.
  • 1,006,970 women and 370,990 men are stalked annually in the United States.
  • 28% of female victims and 10% of male victims obtained a protective order. 69% of female victims and 81% of male victims had the protection order violated.
  • According to the best available estimates, between 1 and 2 million Americans age 65 or older have been injured, exploited, or otherwise mistreated by someone on whom they depended for protection.
  • 11% of lesbians reported violence by their female partner and 15% of gay men who had lived with a male partner reported being victimized by a male partner.

By the way, for anyone reading this looking for info on how to invoke the Illinois Safe Homes Act on your own behalf or on behalf of a friend, you can find some great info in multiple languages at the Sargent Shriver National Center on Poverty Law.

10. Drug use on the property. When showing occupied apartments I have a special form letter that I carry around in my trunk. It reads, in part,

Your landlord has retained me to show and lease your apartment to a new tenant. In the interest of keeping the showing process as brief as possible, please make sure that all personal items and potentially illegal possessions are out of sight if you know I am scheduled to show your apartment.

The file is called "hideyourbong.doc" and I have to distribute 10-15 copies per year. That awkward moment when you need that letter while showing the apartment to an off-duty police officer? I never really want to live through that again.

But seriously, no matter what your views are on drug use, legalization, distribution and manufacture, you need to be aware of it and how it affects your property. Property used as a meth lab will probably put you back to scenario #1 or #2 above: fire in the unit or fire in the whole building. Drug users and heavy drinkers can pass out in other sketchy locations and bring home fleas & bedbugs on their clothing. Grow lights put extra demand on the building's wiring. Knowledge of increased police activity at a property spreads through the real estate community very quickly by word of mouth, and you will have trouble attracting the clean & sober tenants.

I'll probably return with another list of situations, but I'm sure this is plenty to get you guys started. Landlords reading this, do you have any great stories to share about how you dealt with some of these situations? Let us know in the comments!


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