Tenant Payment Performance Update v2023-12
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EVICTIONS UPDATE
Well, the holiday season is officially over and so is the courts’ unofficial holiday shutdown. Now, we’re dealing with delays caused by the huge court backlogs. This happens every year and the courts should be caught up in a week or two.
Holiday spending this time of the year always leads to more nonpayment issues. While our team tried their hardest to work with tenants and get them on payment plans, many didn’t. So, we’ll be forced to file more eviction cases this month. Most tenants will eventually use their income tax refunds to catch up on their rent in February, but there’s no way for us to predict who will pay and who won’t. So, we have to keep legal pressure on everyone.
TENANT APPLICANT SCREENING CHALLENGES
We are halfway through the winter season. This is the hardest time for landlords to place tenants. In early February tenants will get their W-2s and file for rapid income tax refunds. This will cause showing and application activity to increase by the end of February. Right now, we’re still dealing with a lot of subpar applications.
Several months ago, we noticed many Legal Aid attorneys were “legally extorting” our owner clients by threatening a jury trial if they didn’t agree to a Consent Judgment. 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 must 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 tenants paying full rent dropped as expected. Many tenants living paycheck-to-paycheck, with no savings, choose to spend their funds on the holidays instead of rent. Tenants understand that the courts are closed for the holidays and by the time their case is processed it is tax season. Typically, this is the time we see tenants either pay or move.
Macomb County:
The number of tenants paying full rent decreased, again, as expected. This is due to tenant holiday spending. Our delinquencies department continues its efforts to work out payment plans with the tenants to avoid evictions.
Oakland County:
We saw a slight decrease in the number of tenants that paid full rent. The number of tenants on payment plans has been maintained
Wayne County:
We saw a decrease in the number of tenants paying full rent. However, we did an increase in tenants reaching out to us for payment plans and have cooperated with them. We will continue to work with the tenants to stay on track and avoid eviction. We do anticipate that by the end of February, we will see an increase in the number of tenants paying full rent.
