Tenant Payment Performance Update through September 2022
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.
Please be sure to share this with anyone you know interested in real estate investing or looking for a better property manager, so they can see what they are missing!
EVICTIONS UPDATE
We are excited to say that last month we executed 2 evictions in Detroit and have a couple more writs ready to execute in October. This is great news as we’ve been able to start seeing some positive movement in Detroit and Pontiac courts.
These two courts have been the worst with backlogs and nonstop adjournments when it comes to processing eviction cases. While Writs are continuing to trickle in, we do want to stress it is still very challenging to obtain one. Even if we obtain the Writ of Eviction, tenants can still go to the courts and file a motion to Stay, so they can remain in the home. We have a case where the tenant claimed they had COVID and could not be evicted and the judge set aside the Writ, forcing us to chase the judge for updates. Luckily, our attorney was able to finally get the Writ after a one-month delay.
Rumor has it that CERA will officially end on October 14th. Owners hoping for additional CERA funds will be disappointed, while others tired of judges granting numerous adjournments, to give tenants every possible chance to get CERA, will be hoping their eviction cases are processed quicker.
We have received word that a new program will be rolled out in Detroit around October 14th providing full legal representation to tenants who qualify and are facing eviction. Legal Aid will provide attorneys for FREE to represent qualifying tenants. The Detroit Free Press recently published an article about state funding and private donations funding the program with around $18 million dollars to help cover these legal services. This program WILL NOT help tenants find rental assistance. Legal Aid attorneys are looking for every possible technicality to get eviction cases dismissed. They are confirming the landlord/owner, who’s on the deed, was the tenant was served properly, if the owner has the property Certificate of Compliance, etc. All to thwart owner attempts to get rid of non-paying tenants. Please click here if you would like to read more about this.
As we have written in the past about Detroit’s Certificates of Compliance requirements, we wanted to take the time to talk about the consequences of not having one. In these cases, you can receive hefty fines from the city. If you have an eviction case and do not have the CoC there is the chance that the judge can stay the eviction case for 90 days where if you can obtain the CoC they will process the case and if not, then the case is dismissed and we will have to start over with a termination case and terminate the lease.
Our attorneys tell us that starting sometime later this month, Detroit’s 36th District Court is supposed to STOP their multiple adjournments. This should lead to faster eviction cases!
Currently, we are still dealing with Detroit judges adjourning cases 2-3 months out, claiming their dockets are just that full.
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 are seeing more and more tenants having their CERA applications denied for various reasons.
We’re also experiencing questionable delays with the organizations approving CERA applications and disbursing funds to owners. These delays cause us headaches because judges will not issue a Writ of Eviction when a tenant has a CERA approval. We currently have a case we’ve been stuck waiting 3 months for funds but are unable to evict the tenant.
While there are still other programs offering rental assistance, it’s our understanding that these programs are just as badly backlogged as CERA. Please keep this in mind before recommending we research other programs for your past-due tenants.
We’ve noticed that a certain percentage of our tenants have gotten numerous rounds of CERA funds and are now applying for every possible program they can find to pay their past-due rent. Since some of these tenants haven’t paid rent in over 18 months, it’s our professional opinion that they will never pay rent and will need to be eventually evicted. They’ve become accustomed to not budgeting for rent payments and we won’t be able to convince them otherwise.
As you can tell from this monthly article, we pay close attention to tenant performance. So, we’ll pursue nonpaying tenants aggressively to replace them with better ones.
TENANT APPLICANT SCREENING CHALLENGES
We continue to see different cases of application fraud. This can be anything from income fraud all the way up to residency fraud. The sad thing is some landlords are also committing fraud to get rid of problematic tenants.
Tenants who are currently being evicted or recently evicted are trying to hide these by giving fake addresses or fake landlords. Why? Because they know the eviction may not show up on a background check.
When a tenant receives CERA for non-payment of rent, the courts enter a conditional dismissal. This document means the eviction is not on their record and does not show up when we pull our background check. Also, Legal Aid attorneys are negotiating deals that if the tenant vacates by a certain date, a conditional dismissal will be entered.
This makes it very challenging to get an accurate verification of rent payments for some tenants.
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
In our update, there is not much change from last month. As we get closer to the holiday season, we anticipate more tenants falling behind on rent as they use their money to fund their holiday festivities. We hear lots of excuses, but many then use their income tax refund to catch up on their past-due rent.
Macomb County:
We saw a sharp decrease in the number of tenants who paid rent for the month of September. While we were able to execute an eviction in September, we have seen that tenants did not pay rent as they should forcing us to start more cases. We hope that while these tenants are in the eviction process they are able to catch up on their balances.
Oakland County:
We are excited to say that are seeing more tenants paying their balance. As you can see, we have been able to evict the more problematic tenants. Using this example, the other tenants who had higher balances are finding ways to pay to avoid eviction. We do expect this trend to continue where tenants either pay or we can evict them.
Wayne County:
This month´s update is showing the problematic effects of CERA ending. Lots of the tenants in the City of Detroit have gotten addicted to CERA covering their rent. Now that CERA is ending these tenants are choosing not to pay to force us to process evictions for them. Unfortunately, we expect the number of non-paying tenants to rise as we enter the holiday season. However, we hope that the 36th District Court in Detroit will process evictions faster allowing us to get rid of these non-paying tenants.
