Tenant Payment Performance Update through April 2023
We’re not aware of any other local management company sending their clients these types of updates! Please let us know if you hear of another company doing so.
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The courts continue to catch up on their caseloads, even the City of Detroit’s 36th District Court. We obtained 2 Writs of Eviction in April and over 7 judgments. We were able to execute 3 evictions, and several tenants with high balances also vacated on their own.
While more tenants are paying rent on time and making an effort to catch up on past-due rent, we have noticed a new trend. Desperate tenants are going to court and fighting repairs that they caused themselves trying to get the case either dismissed or go to trial.
Then at the second hearing, the tenants will argue and try to drag out the case. The tenants will create such a ruckus in court that the judge will ask Legal Aid to supply a free attorney for the case and schedule a third hearing. At the third hearing, both the tenant and their attorney will not agree to anything to close the case and will ask the judge for trial arguing that there are major issues pending to be resolved.
The judge will either decide to adjourn the case a 4th time or set the trial date. All of this is a delay tactic to either try to have the eviction case dismissed forcing the landlord to start all over or drag out the date that the inevitable will happen. What we are doing preparing for this is making sure we have all communication of a maintenance issue that the tenants have ever reported and what we have done to resolve it. We also have proof of what repairs were done. We submit this, plus anything else to prove the tenants are just stalling.
GOVERNMENT AID FOR PAST-DUE TENANTS
Michigan shut down the CERA application website on June 30, 2022, stating applications will be processed until the program runs out of money.
We’ve not received CERA funds in 2 months, so aren’t counting on them anymore.
TENANT APPLICANT SCREENING CHALLENGES
We continue to see different cases of application fraud. With each case we see, every applicant is becoming more creative with how they try to cover their fraudulent acts.
Another challenge is that Legal Aid is using delay tactics to force landlords into agreeing to a Conditional Dismissal that waives a monetary judgment for the tenant vacating the property. This doesn’t show up in public records as an eviction and the current landlord has every reason to misrepresent the facts, to get rid of the tenant when we call them for a reference!
So, many applications are taking longer to process. Also, due to concerns about being accused of Fair Housing violations and getting sued, we have to proceed carefully with every application we receive.
THE SQUATTERS ARE COMING, THE SQUATTERS ARE COMING ☹
Most landlords won’t rent to a tenant just evicted. So, the increase in evictions will leave many more tenants with nowhere to move to.
We’ve been warning landlords about a coming spike in squatters. To address this issue, we’re now recommending vacant Class C properties have furnaces & hot water heaters removed, the water turned off and more, to deter squatters. There is NO perfect solution for this issue as anyone with enough determination & time can break into any property.
Unfortunately, we can’t count on the Detroit Police for assistance to remove squatters. Despite what they say publicly, when we actually contact the Detroit Police for assistance they make us supply a lot of paperwork and then seem to always find an excuse to tell us it’s a civil matter and we have to start the eviction process. Police in the suburbs are much more aggressive about squatters!
Our biggest current challenge is the number of applicants using fake addresses and landlords to hide that they’re in the process of being evicted or were recently evicted.
RENT PAYMENT TRENDS 30-60-90+ Days Behind Update
Our numbers for tenants paying on time stayed constant. Even better, the number of tenants 90 days behind decreased. Tenants with past-due balances continue to work out payment plans to avoid eviction. We’ve also continued to remove non-performers.
We saw a slight drop in tenants paying full rent, but a corresponding increase in tenants paying partial rent. The good news is tenants paying no rent dropped to almost zero!
The number of tenants that paid no rent dropped to zero! We saw a corresponding increase in the number of tenants paying full and partial rent. We hope this trend continues with the number of tenants paying full rent hitting 100% soon.
The performance here was mixed as tenants paying full rent dropped, but this was offset by an increase in tenants paying partial rent and a decrease in tenants paying no rent. Overall, more tenants are finally contacting us to work out payment plans and evictions are actually happening. We’re looking forward to seeing the paid-in-full number improve next month.