Tenant Payment Performance Update through December 2022
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We’re seeing progress with the courts getting caught up on evictions as we were granted 4 Writs of Eviction last month for nonpaying tenants!
We’re looking forward to the courts finally allowing us to get rid of all the nonpaying tenants in properties we manage.
The CERA program is almost at its end. We’ve been informed by numerous sources that CERA is paying out their final cases and unless the program receives more funding, we may not see any more checks after January.
Reality is also finally setting in for nonpaying tenants as courts grant judgments & Writs. Tenants that have ignored us, including not answering their doors when we knock, are now calling us nonstop, wanting to work out payment plans.
Many of these tenants are trying to work out the impossible. They want us to accept pennies on their large past-due balances, hoping to stay in their homes. We do try to continue to work with these tenants, but many are too far behind for any payment plan to pay off their balances in a reasonable amount of time.
Some bad news – we’ve noticed many bailiffs have increased their pricing. The average bailiff used to charge $500-$1,000. Lately, we’re getting prices starting at $1,500, some as much as $3,000. Unfortunately, owners who are already in difficult financial situations are being placed in even more difficult economic situations.
GOVERNMENT AID FOR PAST-DUE TENANTS
Michigan shut down the CERA application website on June 30. Tenant applications will be processed until the program runs out of money.
We have noticed that the organizations processing CERA applications and disbursing funds are giving the runaround when it comes to disbursing the funds. Despite following up with the organizations 3 times a week by phone call and email, it is hard to get a response. Emails are being ignored and when calling the organizations, they simply place us on hold for 30 minutes, and then the call drops. Even when getting ahold of a representative, they simply say we need to contact the caseworker or tell us the information we already know, the case is processing, and to be patient.
This is only getting worse as the other programs that were offering rental assistance are no longer processing applications. This is placing more pressure on CERA as tenants who are facing eviction are bombarding them with phone calls as these tenants are desperate. Unfortunately, these are the same tenants who have not paid rent in over a year and are the ones who are at the highest risk of being evicted.
TENANT APPLICANT SCREENING CHALLENGES
In addition to increases in fraud, we’re also seeing new and creative fraud ploys.
Here are some of the issues, we sometimes spend hours trying to validate, to keep from renting to bad tenants:
- Fake Landlords to Hide Poor Rental History – Typically a family member or friend.
- Fake Addresses to Hide Evictions Started – Courts are catching up on their backlog of eviction cases and tenants know their eviction will show up on their background checks. So, they are trying to move BEFORE an eviction judgment is entered by lying about where they live. Often, they claim they are living with a relative or friend.
- Fake Addresses and/or Landlords to Hide Past Due Rent – Legal Aid attorneys try to force many owners to accept Conditional Dismissals for eviction cases to get CERA funds. This avoids an eviction judgment being awarded and showing up in public records that background checks then pick up.
- Fake Paystubs & Jobs – We’re still seeing these, but not as often as during the COVID lockdown.
Due to concerns about being accused of Fair Housing discrimination, and getting sued, we have to proceed carefully with every application we receive. As a result, it’s taking us longer to process each application.
RENT PAYMENT TRENDS 30-60-90+ Days Behind Update
The numbers have gotten worse for rent payments due to holiday spending in December. We expect to see an improvement in rent payments when tax refunds start being received in February.
As you can see, the number of tenants paying full rent slightly decreased, most likely again due to holiday spending. Fortunately, those paying zero rent have also decreased.
We saw a decent increase in the number of tenants paying full rent. We were able to get rid of some of the non-paying tenants while also working with the ones that were a little behind to get them back on track. We hope this trend continues as we enter tax refund season.
Wayne County, specifically Detroit, has always been our biggest challenge due to the high percentage of tenants living paycheck-to-paycheck. However, with the courts catching up on evictions, and tenants seeing that reality, we are starting to see more tenants trying to pay something or contact us about Payment Plans to avoid eviction. While yes, we still have a relatively high number of cases, we hope that we can either help tenants get on track and pay their rent or have them evicted as necessary.