All Forum Posts by: Justin Abdilla

I could have sworn I saw this question posted last week!  In the thread I responded to last week, I chimed in that I thought you're best off either waiving the back-owed rent or coming to a reduced payment plan position for something.  In my state, Illinois, it's going to be damn near impossible to evict someone before July.  I think most landlords in my area haven't quite realized that just because the courts are open doesn't mean those courts are accessible.  I suspect you will have to file the equivalent of a forcible detainer action in California in a few months time and pursue an eviction and back rent. 

For now, I don't know if it's worth it to you to preserve your tenants or not.  Only you can know that for sure.

@Account Closed Illinois' FDCPA prevents debt collectors from threatening suit when a suit is impossible.  That's the section to which I'm referring.  225 ILCS 425/9(a)(20) prevents a debt collector from threatening a legal remedy which does not presently exist.  Debt collectors are completely screwed by the Illinois orders, including order 2020-10.

I'm a lawyer!  This is pretty close to the state of the law in my state, Illinois.

In Illinois, you can execute an addendum to a lease stating the lease "memorializes" the previous transaction with no problems. There's a case on this called Rosestone Investments LLC about backdating critical mortgage documents and land interests that goes into way more details.

Practically speaking, we would probably just have our client add a signature onto the lease. I think the situation presented here is a member of an LLC, but not all members, signing the lease. One member is going to be good enough to demonstrate actual authority to contract, so the lease should still be good.

I just wanted to chime in that this was my exact experience as counsel for someone who was renting section 8 in IL.  The payment was not an issue, but compliance with regulation was a huge huge hassle.  It's so easy to find a private tenant in Illinois that you should just list the property on any of the million sites that help people find housing.  I prefer hotpads, but your mileage may vary.  Good luck!

For most places, city zoning overrides county, because the City is the municipality administering the property law on the home.  I don't know of a case in Illinois where county zoning trumped city.

If permits weren't pulled and it's incorrect, we typically schedule a meeting with the City Engineer to determine the cost of compliance and then do it.  In Illinois, compliance usually means paying for the permits you needed to pull and meeting the standards those permits would have required you to meet.

That third question is going to be highly dependent on where you are and what common practice is in your city.  It's pretty hard to get a second improvement built onto one lot, especially if the first improvement is a multifamily property.  I think you're better off trying to partition the lots and then seeking approval from zoning/planning/buildings department to improve that structure.  I don't do a ton of new construction law, but I know trying to get 2 free-standing residences on one property can be awful.

I'm an attorney in Chicago, and I do mostly real estate and tenancy.  For right now, there's no real way that you can evict them for non-payment of rent.  The judge simply won't let you appear to get a judgment, so no matter what you do to evidence that they should be paying you, they're living there, and they aren't paying you, you won't get a signed judgment that evicts them.

I would say even sending a 5-day letter is a mistake.  The FDCPA says that you cannot make communications with legal action against a borrower that you can't or won't take.  You can't evict them right now if they don't pay within 5 days, and frankly, we don't know when the Courts will resume.  I have some cases set for the first week of June, but I really expect those are going to get continued again.  A savvy tenant, or a tenant with a savvy legal-aid representative, will hit you with a consumer debt collection practices counterclaim for doing eviction-related tasks during the stay.

I turned on notices for this thread so I can reply and help if you need.

@Conor Duffin You're getting competing answers because the answer is different depending on who you ask.  For lawyers, the home is under contract at the accepted offer.  For Realtors, the home is under contract once it passes attorney review, inspection, and appraisal.  This is also highly state-specific, so my answer is only good for Illinois.

Talk to a Florida lawyer first, but I don't think you should.

I have done a ton of foreclosure defense in Illinois, more than all but a small handful of lawyers.  We would typically jump at the chance of a deed in lieu.  Deed in lieu usually means a waiver of all claims of back owed money.  That means as an investor, you're accepting that they're just going to move out instead of paying debts.  Not the best for your bottom line.

The other consideration is whether you think your borrower is going to destroy the property.  I find that is a real rarity in foreclosures, and in several hundred foreclosures, I had precisely two clients damage the property to any significant extent.

I saw you received some advice about considering the environmental factors in your foreclosure resolution.  That's great advice because you need to be cognizant of Fair Debt Collection laws.  You want to maximize the protections that you have as a landlord and minimize the recourse that the resident has against your debt.

Still, best practice is to call a Florida lawyer.  Good luck.

I would absolutely hire a lawyer to review the PM contract.  The power of attorney you're giving the PM is enough to prompt you to want a review.

I'd ask about the duration and extent of the power of attorney, the reserve amounts, payment distributions and the scope of the PM responsibilities.  Are there any vacancy fees in it?  What does your manager actually DO is the biggest question.  Oftentimes there are still responsibilities you will have as the owner in the PM contract, so make sure those responsibilities are well understood and are things that you can handle wherever you will be relocated to.

My biggest lesson learned from PM groups is that a big group with a lot of clients is normally pretty complacent, but has great connections.  I find the small and mid-size PMs, running 50-200 properties, are good firms.  The ones that I find running 1,000 doors are usually overwhelmed.

@Carson Eagle I don't love these facts as an attorney.  I'm sure the defense will argue that you had notice of the cracking because it was visible in the original inspection.  Your inspector told you the cracks were fine, too.  Did you go after the inspector at all?  It's usually damn near impossible to win against an inspector, but it's often worth naming them to get party depositions against them.

I'm not sure what the statute of limitations against failure to disclose inspection defects is in your state.  In Illinois, it's usually one year, but you did say you've been at this for a year.  I'm guessing that if your litigation has gone on for a year, you filed within the statute, but the issue is whether the damage was a known, latent defect in the property that was a material defect to the foundation.

To me, this feels like a little better than a 50/50 case.  Given what you said about wanting to know your options, I would still say that's a question for your lawyer but this feels like a case that should settle.  Only $65k in controversy, probably $20k in attorneys fees to do the job lean, or $35k to do it right.   I'm not sure why this wouldn't settle, but that's got to be based on your individual facts in the case.

Call your attorney, sit down and ask your lawyer what your settlement options are and what the dialogue looks like so far.