26 Dec 2013

“Keep Chicago Renting” Keeps Receivers Working

0 Comment

On June 5, 2013, the City of Chicago enacted the “Keep Chicago Renting” ordinance which became effective on September 24, 2013. The law may place an additional financial burden on lenders to the tune of $10,600 per renter. In short, the Ordinance requires lenders and banks who take title to a property after September 24th as a result of foreclosure, offer tenants the option to either renew their lease at no more than 102% of the current rental rate, or give the tenant a “Tenant Relocation Assistance” payment of $10,600. According to one expert, to avoid the costs and complications likely to result from this new ordinance, lenders foreclosing on residential property in Chicago should consider use of a receiver, whose services are not subject to the ordinance. A receiver can receive rents, operate the property, evict delinquent tenants—while avoiding directly transferring property title to the lender.

In weighing the alternatives between paying relocation fees versus hiring a receiver, one of the critical questions lenders will be faced with is who is watching over the investment. It is especially critical this time of year to be sure properties are properly maintained and heating units are working correctly. On an initial visit to a property recently we found every single window open, and upon investigation discovered carbon monoxide present. Not only was this costly to the bank who assumes utility bills until the property is sold, it was a hazardous situation because of the dangerous levels of CO present. To make matters worse, there were adjacent tenants who would have been adversely affected had we not been able to rectify the situation immediately. Hiring a receiver not only mitigates costs, it can also prevent further liabilities when in close quarters with other buildings.

There might be times when a paying the relocation assistance fees are in order, but when they aren’t be sure you are using receivers who take pride in their work and pay attention to details. Before you select your Receiver ask if they visit the property upon initial take over and be sure they willingly work weekends in order to stabilize your investment quickly. Quality receivers will work diligently and thoroughly to help creditors ease the foreclosure process.

If you need a Receiver for your property, contact Steve Saunders today at Steve@sresusa.com. We submit biweekly Property Inspection Checklists, collect rents and pay bills, administer tenant compliance, manage vendor performance, stabilize property operations, plan leasing tenant retention strategies, prepare court and financial reports, and we organize and keep accurate records of all income and expenses. In addition, we use web based solutions such as Dropbox and Evernote so our files are transparent to both the bankers and the Judges. Saunders Real Estate Solutions Inc. – we are here to protect, preserve, and maintain your properties! www.sresusa.com

For additional information: http://www.law360.com/articles/472944/chicago-foreclosure-ordinance-hampers-lenders

About the Author

In 1991 Steve Saunders began his real estate career selling homes in the Midwest. He has sold over $100 million in real estate so far. In 1998 Steve started his first property management company to provide clients a facilities management solution and property oversight for their commercial portfolios. His call center was the first for a local management company and it successfully provided clients with detailed monthly financial reporting on maintenance activities.

Leave a Reply