Tenant Payment Performance Update v2023 – 10
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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Michigan’s Supreme Court made some of the COVID-19-related temporary eviction changes permanent. They went into effect on November 6, 2023. Nothing new, just a few minor changes. Each individual court has some flexibility in implementing the changes. We already know Detroit’s 36th District Court will take the side of tenants.
Our attorneys discussed the changes with their colleagues and updated us on what the majority believes, shared below:
- Certificates of Compliance: A certificate of compliance/rental license/landlord license (the cities all name them differently) will now be critical when filing an eviction. We strongly recommend that landlords in the Metro Detroit area work on meeting whatever criteria the city their rental is in regarding inspections and compliance. Judges MAY refuse to process an eviction case for nonpayment related to a property without one.
- Default Judgments: A judge may enter a default judgment at the first hearing if the tenant doesn’t appear. It will depend on how the courts decide to enforce this. It may speed up the eviction timeline for some cases.
- Rental Assistance: Tenants must now show proof they have filed for assistance and are limited on how long they have to do so. If the tenant submits proof of rental assistance, the court will adjourn the case for a limited time to allow assistance approval.
We have successfully recovered possession of 5 units during the month of October. 2 of these cases were with squatters. We look forward to removing a few more before the unofficial suspension of holiday evictions.
TENANT APPLICANT SCREENING CHALLENGES
We’re still receiving a lot of subpar applications due to the winter season and the slowing rental market. Due to Fair Housing requirements, we must process all received applications consistently the same way.
Several months ago, we noticed many Legal Aid attorneys were legally extorting our clients with offers of Consent Judgments or jury trials. Jury trials may take 6+ months to resolve, allowing nonpaying tenants to stay longer. The Consent Judgments offer quicker property recovery but avoid an eviction being entered against a tenant. So, no eviction shows up on a background check of these tenants.
In response to this trend, our Application Department has started checking court records for eviction filings. This is a time-consuming process as the records of several courts must be checked manually. Also, due to human error, we must check several name variations. Our efforts are paying off though as we are finding an increasing number of applications with recent eviction filings. When we ask for an acceptable explanation for these filings, most applicants withdraw their applications or disappear.
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 number of our tenants less than 30 days behind on their rent has increased!
We’re, of course, doing everything we can to keep improving this number.
Our numbers are maintained for this month. We continue to work with the number of tenants paying partial rent on payment plans to get them back on track. We hope this trend continues.
We saw a slight decrease in the number of tenants paying full rent. The good news is that the number of tenants paying no rent stayed the same.
For Wayne County, we saw a slight increase in tenants paying full rent, a drop in tenants paying partial rent, but an increase in tenants paying nothing. This is not a surprise given the winter season. We’ll be aggressive in starting eviction cases against these tenants.
We do anticipate some deterioration of Class C tenant payment performance as we get closer to the holiday season, due to some tenants prioritizing holiday spending over making their rent payments. Many of these tenants though, will enter payment plans and catch up when they receive income tax refunds near the end of February. Unfortunately, it’s an annual occurrence for many tenants living paycheck-to-paycheck, which we’ve yet to figure out a legal way to deter. We are open to your suggestions!