All Forum Posts by: Account Closed

Hi Joe:

Answers:

1) The landlord should in no way discourage or incentivize the tenant to deny entry--that wouldn't be a good faith effort.  Telling them that they have a right to refuse is OK.

2) You'll have to deal with the municipality on that one.  State law does not allow a city to charge for something they do not do.  Just a side note:  A registration fee is different from an inspection fee...though some municipalities merge the two.

3) The municipality would set the fee, violation, etc. for no informing them of the move and the cost would be determined locally.  Some communities pursue civil infractions--others turn them into misdemeanor cases. Per your hypothetical case:  The new tenant has a right to refuse and if they say no, it starts all over again.

Make sure to only take advice from an attorney practicing law in Illinois and/or information from investors that have experience with evictions in Illinois. : )

Heads up:  The U.S. Supreme Court and many lower U.S. District Courts since then have ruled that rental inspections are legal and municipalities may carry out an inspection program and require registration and certification.  However, a municipality cannot force their way in--they must have the tenant's permission (not the owner's).  If the tenant does not give permission, the municipality can do one of two things:  get an administrative warrant (which does not require probable cause) or wait until the unit is vacant.  Also, the municipality cannot penalize the tenant or the property owner for the tenant exercising their right to refuse, i.e. fine, fee or condemn the property simply for the failure of the tenant to give permission.  All of this is required in order to protect the tenant's 4th Amendment rights. 

One particular and fairly recent case in Flint, Michigan found that the City of Flint was incorrectly carrying out their rental inspection program by not allowing for tenant's refusal and specifically stating in their ordinance that an administrative warrant was necessary where the tenant refused--if the inspection was not an emergency.  The City subsequently changed its ordinance but the Court ruled that it was too late in this particular case and the Plaintiff prevailed--basically because the ordinance was previously incorrect at the time of the Plaintiff's suit.  My attorney has stated that the court in this case did not rule all rental inspections unconstitutional--rather, just the way in which Flint was doing them.  (FYI:  I'm not an attorney, and I'm not giving legal advice--just passing along information.)

Good news:  RPOA of Michigan promoted a bill to change Michigan's law regarding inspections.  This law was signed by the Governor and goes into effect at the end of February 2018.  In short, under the current law, municipalities are allowed to enter a rental unit without permission--IF there is a clause in the lease allowing the landlord entry.  In other words, municipalities are allowed to enter under the landlord's contracted right of entry.  This law is unconstitutional because it does not provide the tenant an opportunity to directly deny entry for a government rental inspection.  These types of clauses in leases do not specifically give the municipality the right to enter--just the landlord.  Starting in February under the new law, municipalities must get permission from the tenant to enter the premises for a rental inspection.  The landlord must make a good faith effort to obtain the tenant's permission for the inspection.  If the tenant refuses, the municipality must either get an administrative warrant or wait until the unit is vacant.

A seller can counter any offer made.  If they don't get that--well, too bad.  If they are working with a real estate agent, shame on the agent for not simply pointing that fact out.  In fact, as a previous commercial real estate agent, I was more than happy to get any offer on a property I had listed--it's a place to start a negotiation.  An offer shows interest.  There's no negotiation if no offer is ever made.

The building code is just part of your concern here--the zoning code is even more important.  Make sure you can do this in the area of your property.  Many areas do not allow for expansion of rent units.  (Also, to others, do your due diligence--many rental property owners changed their tax status to single-family, owner-occupied during the last recession.  Investors that did not check out the status of these properties and invested in remodeling all the units have found themselves in a world of hurt when they discover the change in tax and zoning status.)

Many owners are reporting the same thing.  The market is changing due to many factors, not least of which is all the new and upcoming rental units coming onto the market.  These changes will influence where people choose to live and the rent they are willing to pay.  Most of the units becoming available are in the $1,200-1,400 per month range.   As the new units become available (and there are a lot more yet to come onto the market), tenants are likely to shift around, i.e. some will move into the newer units, opening up other units, etc.  In other words, it is likely that the vacancy rate is going to increase as leases expire.  Since vacancy rates were so tight over the past several years and rents increased so much, some renters chose to live in units that they wouldn't ordinarily choose to live in.  This will also drive a shift in the market as competition heats up for the newer units.

Also, according to economist in the area, we are heading into a recession in 2018 and that will likely have an impact too.

Bottom line, most investors believe we have hit the top of the curve in the area.  This doesn't make GR a bad place to invest--it just changes our numbers.  Be a smart investor!

Didn't read all the responses but Foremost Insurance offers vacant property insurance.

Land banks are good for one thing:  redeveloping property that is not economically feasible for an investor--i.e., the numbers don't work.  Just because a property has been condemned does not make it necessarily a problem for an investor--though land banks will tell you it does.  A problem with the land bank laws in Michigan is basically that any property foreclosed on for taxes or that has been condemned is blighted and land bank worthy.  Land banks will use these reasons to convince the municipalities to turn the property over to them for little or no cost.  Municipalities do this for one reason only:  To prevent investors (those terrible absentee landlords (sarcasm intended)) from buying and turning them into slums. For tax foreclosed properties, selling/giving properties to a land bank is almost always a lose/lose scenario for the county...especially in a tight real estate market.

Land banks that deal in properties that are investment worthy are simply acting as private investors with charitable and/or public funds.

Depends on where the property is.  Are the potential tenants likely to want a pool and willing and able to afford the maintenance?  If you choose to keep the pool, I'd do the following at the least:

• Make sure your insurance covers the pool and your provider knows you're renting the property out.  (Likely large increase in insurance.)
• Make sure the pool is up to code and you have the proper fencing, etc. to be in compliance.
• Include regular pool maintenance, opening and closing of the pool as part of the rent cost so you don't have to worry about the tenant's not taking care of things.  (This might not need to include the daily/weekly cleaning.)
• Have someone do a visual inspection a couple of times throughout the season to ensure that everything is as it should be.
• Create specific rules for the use of the pool, including the times of day.  (Neighbors hate frequent late night teen parties at the pool.)

Or, to heck with all that, and fill it!

Several agencies provide rental assistance but only after a  notice for eviction has been sent or the compliant has been filed.  As whether or not you like the program is likely irrelevant as most judges will say you have to take the payment.  (In fact, in many larger court districts, "eviction diversion" programs have been put into place whereby an agency commits (just before the hearing) to pay the outstanding rent.  If the payment is made, the eviction is expunged from the tenant's record.)