And other legal tips for manuvering through the rules/regulations in Champaign/Urbana

• What is a 5 day notice? When is it used? What are the service requirements?
• What is a 10 day notice? When can I use this? Is this served the same way as a 5 day notice?
• Are there any other notices that I could be using?
• What can I legally deduct from a security deposit?
• What is required of me when doing security deposit returns?
• When do I “have” to pay interest on security deposits?
• How do I handle abandoned properties, legally?
• How do I put commonly metered utilities in my lease?

….AND MORE!!!

I know we all know this stuff, but has something changed…Is there a new ordinance or law that you have not heard about?

We would like to ask Art Mann to come back with more legal tips, What questions do you have?

No question is too small.
If you are thinking it, someone else probably is also.

Send Marita an email or bring your questions on Thursday. We will have cards available for your questions and if we don’t get to them, we will next time or you can put your contact information down for Art Mann to contact you directly.

To ameliorate the situation, consider addressing the issue of security deposits a month before the end of the lease. Sharing the following information with your tenant may help smooth the move out process:

Move In/Move Out Checklist

Provide the tenant a copy of the move in and move out checklists. The move in checklist shows the condition of the apartment when the tenant took possession. Include a note that indicates your desire that the apartment be returned in move in condition so that you can return the full deposit. You might suggest that tenants can request a walk-through to be sure they have met your standards.

If you attended Mr. Landlord Jeffrey Taylor’s presentation in April, offered by the Central Illinois Apartment Association and sponsored by our partners First Federal Savings, then you heard him describe steps you can take to have the unit “move-in ready” before the end of the lease. The procedure he describes makes it much easier to return the security deposit. Contact me if you’d like to know more.

Deposits Are Not Rent

Remind the tenants that security deposits can not be used for the last month’s rent.

Time Frame

Share with the tenants information on the State of Illinois’ required time frame for returning security deposits. It is as follows:

“A landlord leasing residential real estate containing five or more units who receives a security deposit may not withhold any part of that deposit as compensation for property damage unless he furnishes to the tenant, within thirty days of the date the tenant vacates, a statement of damage allegedly caused by the tenant and the estimated or actual cost of repairing or replacing each item on that statement.

If no such statement is furnished within 30 days, the landlord must return the security deposit in full within 45 days of the date the tenant vacated.”

Interest

Share with the tenants information on the State of Illinois’ or your community’s requirements for paying interest on security deposits. The State of Illinois’ requirements are as follows:

“If a building contains 25 or more residential units, the landlord must also pay interest on the deposit from the date it was paid, if held more than 67 months. (Interest is calculated at the rate paid by the largest bank in Illinois, as determined by total assets, on a passbook security account.)“

In Urbana, the regulations are more stringent. Urbana requires all landlords to pay interest on security deposits, no matter how many apartments are in their building, if the security deposit is $100 or more. If the security deposit is $99 or less and the building contains 25 or more residential units, then the State of Illinois’ requirements to pay interest is applicable.

If a landlord fails to return the security deposit promptly, the tenant can sue to recover that portion of the security deposit to which the tenant is entitled as well as the recovery of their legal fees. Therefore, it’s important to document the condition of each unit, follow the prescribed time frames and communicate with your tenants. You may find that this reduces your move out stress as well.

By George N. Skidis, Jr.

Whether the tenant leaves voluntarily or by legal force, you need to deal with the security deposit. Whether or not you are entitled to keep the deposit, you must comply with the state law.

In most states you must return the security deposit within a required number of days or send a certified letter to the tenant stating why you are keeping it. Even if you are entitled to keep the deposit, your failure to comply with proper procedure will result in a lawsuit against you for improper withholding. You can always sue the tenant in small claims court for rent owed and damages to the property, but you cannot withhold the security deposit without the following rules.

The only way to win an eviction is never to need one. Once the eviction procedure is started your goals should be minimizing your lost rents, stopping your damages, limiting your expenses, obtaining a monetary judgment and recovering your property.

As an investor working with tenants, you should be very familiar with the eviction laws where you do business. These basics of these laws apply to your property whether you are renting it out, sandwich leasing, lease optioning or selling bond for deed. Corporations, which are legal entitles, but not physical persons, must hire an attorney to represent them. Private individuals, sole proprietorships and individuals doing business under an assumed name or DBA can represent themselves in court.

I recommend that you learn the landlord tenant laws and the timetable for evictions in your county, even if you are a corporation. If your business is not a corporation, and you have any doubts as to how to proceed, hire an attorney. You should probably hire an attorney to handle your case the first few times just to see how it is done. Landlord tenant law is not difficult to understand, but it is very technical.

A minor flaw in your paperwork or filing, or conduct could mean having your case thrown out. Being thrown out means you get the luxury and expense of starting all over and the tenant gets more free rent. Thus you should consider paying an experienced landlord-tenant attorney to do the job. Make sure it is an attorney that specializes in landlord tenant law.

An eviction proceeding is known by various names depending on what part of the country has jurisdiction. In Saint Clair County, Illinois is referred to as “Forcible Entry and detainer” but I have also heard it called a “Summary Proceeding” or “Unlawful Detainer” proceeding. In any case the plaintiff (property owner) is filing a lawsuit against the defendant (tenant).

The purpose of the lawsuit is to obtain a court order to permanently remove the tenant from the premises. A “Forcible Entry and detainer” called an F.E. & D. lawsuit is the only way to legally remove any and all tenants from the premises.

There are many ways to illegally remove a tenant from the premises.

Such an action is called “Constructive Eviction”, those days are over. No matter how much they owe you or how emotionally charged the situation is, don’t even consider trying it. It is illegal to physically or constructively remove the tenant from the premises. You cannot change the locks, shut off the power, and remove an exterior door to repair it, board up the house, place fake condemnation placards on the dwelling or other similar action.

Before you can commence the proceeding, you need to terminate the tenancy; you do this by serving notice on the tenant as required by your state law. For nonpayment of rent, the notice can be a three or five day notice depending upon jurisdiction. It frequently has a heading such as “Pay Rent or Quit”.

When serving a “Pay Rent or Quit Notice” never include the day of service in your calculations of the time period. If notice is properly served on the 10th of the month, the time period starts on the 11^th In this case five days would expire at midnight on the 15th

On the sixth day after serving a five day “Pay Rent or Quit Notice”, if the tenant has not paid the rent in full or moved out after that time, you can commence legal proceedings to recover possession of your property. This means your case can be filed anytime after the 15th I normally wait an extra day or so before filing, some judges like patient gracious property managers.

Q: After I moved into my apartment, the original landlord sold the property to a new owner. I paid my security deposit to the original landlord, and continued to pay rent to the new owner. My lease is up soon, and the new owner says he never got any deposits from the old landlord, so he can’t refund anything to me. Is there any way I can get my deposit back?

A: There should be, assuming your rent is paid in full and there are no damages. Whether or not the old landlord gave the new landlord any security deposits, the new landlord is responsible to you for your deposit. It’s the law.

That law is the Illinois Security Deposit Return Act, which provides a rare direct solution to your problem. It makes it clear that the new landlord steps into the shoes of the old landlord, and is liable for the deposit.

The law says: “In the event of a sale . . . of residential real property . . . by a lessor [landlord] who has received a security deposit or prepaid rent from a lessee [tenant], the transferee [new landlord] of such property shall be liable to that lessee for any security deposit, including statutory interest, or prepaid rent which the lessee has paid to the transferror [old landlord].

All those words (74 in all, counting those left out) boil down to saying the new landlord owes for the deposit you paid to the old landlord.

Old and new landlords should explicitly deal with security deposits whenever rental property is sold. One way is for the old landlord to actually hand over a pot of money, representing the deposits, to the new landlord as part of the sale. Or, the new owner can get a credit for the deposits the old landlord would pay, and simply reduce the amount paid to the old landlord for the property.

But sometimes, especially with Mom-and-Pop rental properties, neither side thinks about deposits when a house or apartment is sold. That’s where the Act comes in.

So, the new landlord is liable, even if he got nothing from the old landlord for deposits. To protect against the new landlord claiming that you wouldn’t get your deposit back anyway, because of damages or clean up charges, carefully document the condition of your apartment when you move out (e.g., photos, videos, witnesses). If the new landlord then doesn’t voluntarily return your deposit, you can sue in small claims court for a refund. That’s where you can use those photos, videos, and witnesses.

If there are 5 units where you live, your landlord has either 30 days from when you move out to explain in writing any deductions from your deposit, or 45 days to return the deposit without deductions. And if there are 25 or more units, you get interest–but only at a current rate of about 1% a year.