What to know about Illinois eviction moratorium

Now nine months into the pandemic, it’s clear that the housing market has fundamentally changed for renters, homeowners, property managers, and housing providers. Property manager Jenny Coopmans says the toughest part of her job now managing rent collections. “We have to make sure we can collect enough funds to keep the properties afloat. Owners are still responsible for mortgage payments, maintenance, insurance and other costs associated with the upkeep of the building,” she says.

There’s a lot to keep up with from federal orders to the state's eviction moratorium and local legislation changes. We’ll cover the latest updates so that you can prepare for what's ahead.

When will evictions resume?

In an executive order, Gov. Pritzker first put a moratorium on evictions starting on March 20. Since then, he’s opted to extend the order every month as it nears expiration and on October 16, the governor did just that. At a press conference, he stated, “Remember, nothing really has changed in terms of the effect of COVID-19 and its effect on the economy, its effect on people’s jobs and their ability, or inability, to pay their rent or mortgage.” So for now, this means the statewide moratorium on evictions for non-payment will last until November 14.

To be clear, the moratorium only prevents the court filing and enforcement of evictions, renters must still pay rent. There are some cases where the court will permit evictions but only when a tenant is breaking the law, posing a threat to others, or causing severe damage. These types of evictions are less common because they’re harder for housing providers to prove in court. So, the majority of eviction cases are due to non-payment.

How does the eviction moratorium from the CDC apply to Chicago?

In September, the CDC issued a moratorium on evictions until the end of the year. The CARES Act also had a moratorium on evictions, but it applied to much fewer properties and tenants. The CDC’s order includes all residential properties that are occupied by tenants who are receiving government assistance, have had their income impacted by the pandemic, or if they’d be homeless if evicted. Right now, the governor’s order is what applies to Illinois. The larger federal order would only come into play if the state’s mandate expires for good in November.

What does the COVID-10 Eviction Protection and Fair Notice ordinances mean for property managers?

The challenges of the pandemic brought Chicago’s housing issues to the forefront of the city’s agenda. Many policy makers called for changes to protect the fragile market, and while the ordinances primarily protects renters, they do have provisions that everyone should know.

This summer, the City Council approved the eviction protection ordinance which requires landlords to make a “good faith” effort in situations of non-payment. This means a conversation about payment plans or involving a third-party mediator. The ordinance also protects housing providers by requiring tenants to pay rent. Typically, a tenant has five days to respond to a landlord’s intention to file an eviction. A separate mandate, the Fair Notice ordinance which passed at the same time, extends that period to a total of 12 days if the tenant indicates they’ve been affected by COVID-19. It also requires that landlords must give 60 to 120 days notice (depending on how long the tenant has lived there) to tenants for non-renewals or rent increases.

Most of the measures put forth by policy makers have focused on preventing a wave of evictions. Coopmans says that owners need to be taken care of, too. “It’s crucial to provide assistance to both renters and property owners,” she says.

How Commercial Receiverships Work

What is a receivership?

Receiverships typically begin when a mortgage loan goes into default due to lack of payments from the commercial property owner. Similar to a home loan, once the property is in default a lender will likely initiate foreclosure proceedings. As the property goes into foreclosure, a lender will want to limit the bank’s liability and ensure that:

• The value of the commercial property isn’t damaged in any way by the borrower

• Any income for the property is being put towards the loan and maintaining the property only

This is where a receiver comes in to play. The receiver is requested by a lender and appointed by the court. They act as a neutral third party and it’s their job to meet the above objectives and are responsible for managing the property until the foreclosure is complete.

Additonal reasons for a receivership?

In addition to defaulting on a loan, a commercial receivership may be entered if:

• The value of the property is enough to satisfy the loan debt

• Waste has been committed on the property

• The government is foreclosing on the property to reconcile back taxes

What is a receiver?

As stated above, a receiver is a neutral third party individual or company that was requested by a lender and will be in charge of managing the property throughout the foreclosure proceedings. While the request comes from a lender, the receiver takes direction from the court only and acts in the best interests of both lender and borrower.

Above all, receivers are required to:

• Honor and uphold the contractual rights of the tenants in the commercial property

• Safeguard the welfare of all tenants and guests

• Continue to manage ongoing operations and expenses

• Make all commercially reasonable efforts to maximize profitability from the property

• Exercise its best efforts on behalf of the lender and borrower.

What is in their scope of work?

• Maintain & secure the property (i.e. vandalism or damages)

• Negotiate and pay property expenses and taxes

• Sell the property (with court’s permission and additional party consent.)

  • Selling a property before the foreclosure ends can produce more net proceeds than a foreclosure sale. By agreeing to the preforeclosure, the defaulting borrower might be able to avoid a deficiency judgment

• Take over the bank account associated with the commercial property

• Establish itself as new management

• Manage new and current leases and collect rental income

• Make necessary repairs, work with local government to address any violations, and oversee any ongoing construction

How does a receiver get appointed?

Receivers are appointed by the court upon a lender request. Lenders are given the right to request a receiver upon most commercial mortgages when the borrower defaults. Depending on the case, some courts find a default to be sufficient enough grounds to grant an order of receivership. However, others require more proof that it is necessary. 

Advantages of a receivership

• A receiver will assist a lender in recovering funds by protecting the value of the commercial property.

• Depending on the skill of the appointed receiver, a property’s value may even increase- which both a borrower and lender can benefit 

Disadvantages of a receivership

• Lender and owner lose control of the property, its income, & potentially its disposition

• Receivers can be costly to hire and the lender is required to cover the cost of whomever the court appoints.

Overall, each commercial property is different making it important to weigh the potential liabilities. Does construction need to be done? Has management been abandoned and for how long? Are there any environmental concerns? Does the commercial property require marketing for tenants? From there, a decision can be made on if a receivership is worth pursuing.

Fall To-Do List For Property Owners

The Chicago winter season will be here before we know it! If you are a property owner you may be thinking about how you can save on your rental building expenses this winter. Not to mention keep your residents happy. PRG Management is here to help with a list of to-do’s that might save you a headache on those brisk, snowy days. 

Schedule inspections and winterizations. 

Have the roof, exterior, HVAC, and plumbing inspected. An exterior inspection could save you big on cash and time. Loose shingles, TPO, and siding could make way for sneaky leaks from melting snow and ice. Making sure your HVAC and plumbing is up to par will ensure you’re properly providing for your residents and potentially save you from any unexpected safety issues or damage over the season. Winterize your sprinkler system and pool. Protect the systems from freezing and therefore, yourself from any added expenses when you’re ready to bring your exterior back to life in the spring.

Perform any needed maintenance and make repairs. 

Consult your current maintenance requests for any items that could be worsened or made more difficult by inclement weather. Repair any loose siding, shingles, or TPO roofing before being further damaged by wind or water. Check on any underground plumbing before the ground freezes to avoid unnecessary expenses. Clean out the gutters to prevent leaks, rotting, and pest infestation from leaf and debris build up. Before it gets cold replace all furnace filters and do any needed furnace cleaning so residents and the property are ready for low temperatures. Consider insulating the pipes to save on utility costs and prevent a pipe burst.

Talk to your tenants.

Lastly, be sure to contact your tenants about doing their part in protecting their home. Remind them that furnaces should be set at no lower than 60 degrees to help keep pipes from bursting. On extreme days, have them leave sink cabinets open to give pipes more direct access to heat. Suggest they cover the interior of windows with an insulating film to further deter cold, keeping their heating bill down. Discuss any protocols for an extended absence so you can be certain the property is looked after. Make sure they know how to best reach emergency maintenance, should it be needed.

Get started early!

We never know when winter will really set in so get started on your Fall to-do list right now! Your residents will appreciate your proactiveness; your team will thank you for saving them time out in the cold; and you and your wallet will rest a little easier.

How to Increase the Value of a Rental Property

Rental property owners should always be thinking about how they can increase the value of their property. Improvements don’t have to break the bank to make a difference.

Simple things like preventative maintenance and general property management will increase the value of a rental building and decrease tenant turnover. It will also give owners the opportunity to charge higher for rent and attract new tenants, all of which will help their bottom line. Here are 6 easy ways to increase the value of a rental property.

Update Curb Appeal

Your rental doesn’t have long to make a first impression. Potential tenants are more likely to be drawn to a property that looks put together and taken care of. Aesthetic improvements such as power washing, repainting window shutters & doors, and landscaping, are inexpensive and will go a long way.

Additional ideas to step up your curb appeal and attract tenants to your property:

• Plant new grass.

• Paint the exterior.

• Trim back trees and shrubs.

• Install planters in front of an apartment building.

• Pour new concrete or install new pavers or bricks.

Prioritize preventative MAINTENANCE

Perhaps one of the most important ways to increase the value of a rental property is by conducting regular inspections and maintenance. A key way to increase returns is through preventive maintenance. Small things like changing filters, cleaning off A/C compressors, and clearing gutters will save owners thousands of dollars in HVAC and foundation repairs. Providing thorough maintenance between tenants and with current tenants can go a long way with lease renewal and increasing referrals.

Add Popular Amenities

Amenities are highly sought after by tenants. To keep up with the competition, owners can do things like:

• Invest in quality washers and dryers and make the space as inviting as you can. Adding tables or offering free wifi can help even if the room is unfinished.

• Make sure the rooftop space is kept clean and reflects that it is looked after. Adding small items like chairs, benches or flowers make the space more appealing and worth more to prospective tenants. 

• If there isn’t a rooftop/patio, build out a communal garden area. Depending on the size, include a seating area for residents to enjoy or allow them to grow their own plants. It creates the sense of community that many tenants look for and is a great asset for increasing the rental value of a property. 

• Maximize existing spaces. If the building has a basement that just needs to be cleaned out, do so, and then make storage available to tenants.

Focus on pain points

Property pain points go hand in hand with preventive maintenance and should be a priority for owners. Common pain points include:

• Kitchens: replace old/outdated appliances and increase appeal by update counters, old wallpaper, and even cabinet knobs.

• Bathrooms: faucets and pipes go through normal wear and tear so its important to maintain them before they turn into a larger problem.

• Windows and Roofing: leaky or run down windows can be a deal breaker for tenants. Swapping out old windows/roofing not only improves the look of your property but also help lower the cost of utilities.

These kinds of upgrades can be marketed to attract quality tenants and will reduce tenant turnover. Additionally, it gives owners the opportunity to charge higher rent since they will have a higher quality product.  

Always Evaluate the Market

It is important for owners to know what their property is worth at all times. Property managers are skilled in market evaluations and can help you price your property correctly. If you’re an owner in need of a rental valuation, you can request a free rental proposal from PRG Management. Learn More ⟩

In addition, rental season fluctuates so owners should price units accordingly. Fewer people are looking in the winter so offering a prorated discount is a wise choice and will bring in more prospects. Then, once renewal comes along, increase the rent back to the normal, non prorated amount. When doing this, it is important to make sure the tenant is aware that the price will be increasing. The increase should still be in line with the market and not be so much that it pushes the tenant to leave.

Screen & Communicate with Tenants

Fixing up a rental property won’t go very far if tenants are unreliable. This is where a property management company comes in handy, as they have access to the top screening technology. Doing credit checks and basic background checks will help owners find reliable tenants and decrease turnover.

Additionally, it’s important to communicate with current tenants. Keep them in the loop when building maintenance is being done and let them know they’re being heard and are a priority. When a service request is submitted, they should be responded to so they know it’s being worked on. A frustration that tenants express is when they’re left wondering whether or not a message was received and what’s being done about it. By prioritizing communication, owners will cut down on turnover and will increase referrals.

Top Questions when Interviewing a Chicago Property Manager

As a top Chicago property manager, here are the questions we as a firm are asked the most in the market.

How long are you locked into a contract?

At PRG Management, all management contracts are month-to-month unless otherwise stated or negotiated. We provide a professional service to our clients and we understand that our jobs are to take headache off our client’s plates.

However, contract terms are not always presented during the time of the proposal. Many owners are locked into services for a set time period. Make sure to understand how long the property manager will require you to stay with their service.

WHAT TYPE OF PROPERTIES DO YOU SERVICE?

• Residential Rentals or Multi-Family

• Mixed-Use

• Commercial

  • Retail

  • Office

  • Industrial

• Condominium Associations

• Homeowner Associations

• Townhouse Homeowner Associations

• Banked Owned/Distressed Real Estate

  • Commercial And Residential

What property management software or online tools do they provide?

With the growing number of online and computer-based tools in property management, staying up to date with a powerful marketing and tracking software is very important in the industry. One thing that investment property and homeowner association clients regularly fail to ask during the interviews with new property managers is what type of software or technology the property manager utilizes. As time goes on, any property without powerful and state-of-the-art technology will fall behind and have increasing headaches in management.

At PRG Management, we understand that our service is directly related to time available for the property manager to organize and coordinate value-add projects around the property. Any property manager without the proper tools will spend more time on day to day activities (and therefore less on additional wish-list projects), or need to charge more to be profitable in the industry.

All residents should have a smartphone app, be able to pay online, and view financials that are updated in real-time 24/7/365. In addition, residents are able to track work-orders submitted and see updates as they come in. This allows for better communication and improves transparency rather than using an online form that gets completed but often leaves the tenant in the dark regarding any updates.

Is there any markup on maintenance or kickback from vendors?

Markups and Kickbacks are a common occurrence in property management. All owners should know whether or not a property manager is profiting from any repairs or maintenance at their property. A markup gives improper incentives to the property manager, making it more about saving costs for the owner which can lead to a conflict of interest if the owner is not aware of these up-charges. If a markup is understood by the owner or a cost is added to reimburse a property manager for their expenses, markups or kickbacks can work. At PRG Management, no property manager can accept a kickback from a vendor, utility, or service provider.

Are there other property management costs In addition to the management fee?

Many owners sign up for property management services and find that there are several additional expenses that were unknown and added without anticipation. While most owners have conversations with property managers about what they charge, to ask this question indirectly, every owner should know how their funds are being allocated on top of the standard fee (if any).

At PRG Management, to decrease our management fees and align our costs with our services provided, we have structured our fees to include a few line items. This allows us to avoid overcharging clients that do not incur these additional services and also avoid under-charging those clients that are costing additional time/resources. Find out more here for a detailed proposal and discussion on how we intelligently structure our management fees for a win-win partnership between owner and manager.

Is the owner responsible for marketing costs of the rentals agent?

Most of the costs that a property manager incurs are passed through to the owner. One cost that many rental owners do not project (beyond rental fee) is marketing costs for their property. Owners should ask if the For Rent signs, photography, and 3rd party listing technology or MLS fees are an owner expense.

At PRG Management, our leasing agents include and take on the risk of the listing fees for individual units. For larger properties that require a custom or commercial-grade signs or listing fees, all associated costs are discussed with the owner. Additional marketing costs are also dependent on the leasing fee and are approached by a case-by-case basis that always requires owner approval fist.

What financial reports does the property manager provide?

Many property managers send (or should send) rent proceeds on a regular basis unless the owner requests no distributions. But where do these numbers come from? How will your accountant file your taxes in the new year? Every property manager should provide a Rental Owner Statement to Rental Owners that includes details on the expenses and all incoming and outgoing line items. For HOA board members, the property manager should send an income statement on a monthly basis.

At PRG Management, our tools allow owners to view financials online, updated real-time on a 24/7/365 basis. Also, additional reports include a delinquency report, balance sheet, reconciliation report, unpaid bills, and transaction detail or summary.

How frequently and what time of the month do owner distributions occur?

For investment property owners, it is important for the investor to know when their distribution will be sent. As funds are collected by a property manager, there is a period of time where the accounts need to be checked and reconciled for accuracy. Typically once an accounting period closes (end of the month) a bank reconciliation occurs for all checks and deposits over that period of time. Once this is finalized, the owner draws can occur. Make sure to understand your property manager’s process before agreeing to services.

Do you require a reserve or deposit for the manager to hold in their account?

Typically property managers hold funds on account for expenses that may come up after an owner distribution is sent. Property managers are not banks or lending institutions and do not have the ability to front expenses on behalf of their clients. Sometimes these reserves are dependent on size or number of units.

What is your lease renewal and rental marketing process?

Vacancies are a large cost of any rental owner. Understanding when the tenant’s lease is expiring and how soon the property manager markets the rental for lease is crucial in increasing the profitability of any property.

As a Chicago property manager, no tenant is allowed to receive their lease renewal offer greater than 90 days from their lease expiring per the Chicago RLTO. After some time to think, review, and accept (or deny), the property should be marketed between 30-60 days prior to lease expiration.

With the growth of COVID-19 in 2020, we understand that it’s not always possible to execute this marketing period, and not every property will be at 100% occupancy. At PRG Management, our general rule is to market every property 60 days in advance to lease expiration. Contact us to find out more about our experience, best practices, and how our leasing partner, Pearson Realty Group, helps to limit owner vacancy.

What kind of lease do the tenants sign?

Standard lease terms do not always protect owners from risk and clarify tenant vs owner responsibility. This can cause the owner additional expenses for repairs or maintenance. At PRG Management, we have experience dealing with and preventing issues from all types of situations that we layout in advance of any tenant taking possession of their property.

Are your property managers licensed?

All community association managers are required to be licensed with the State of IL. Any person performing a licensed activity per the IL Real Estate Act of 2000 is also required to be licensed. Know the difference between licensed and unlicensed activities and whether or not your property manager is properly licensed. This also includes leasing activity.

Online Tools for an Easy Owner Experience

The goal for most property owners is to maximize the profit of their investments, as well as maintain and increase the value of their properties. However, owners can find themselves bogged down in tasks like collecting rent payments/fees, managing complaints and repairs, property preparation, and vendor coordination. So to help owners focus on what’s important, property management companies provide owners with a suite of online tools for an easier owner experience. Here are a few ways those tools help owners maximize their return on investment.

Landlord Communication & Transparency

Communication between owners and property managers is key to a successful working relationship. With online tools like Buildium, property managers can easily share financial reports and important building documents that owners can access at any time. Owners can also keep up on the latest maintenance updates, vendor efficiency, and payments. Reach out to our property management team to see how else owners are kept in the loop.

Marketing Tools

Finding the right tenants and minimizing vacancies can be a primary stressor for property owners. This is where property managers come in handy. They are skilled in rental marketing and use expert tools to create rental ads, take high-quality photos, and host open houses even virtually. They also have local real estate knowledge and will be able to help you set a competitive rent price. Hiring a property manager with marketing experience can help fill your property sooner and reduce the time it sits vacant.

Tenant Communication & Retention

Without the right online tools, tenant communication can feel like a full-time job. Property managers have access to technology that allows them to reach out directly to tenants and solicit feedback on a large scale. While face-to-face conversations are valuable, following up online allows managers and owners to easily organize feedback and make decisions with all of the information in one place. That way, property owners and managers can ensure the updates made to units have a proven return on investment.

Additionally, management software needs a human touch. If renters aren’t shown proper attention or feel like they are being heard in their requests, they may look elsewhere. By tailoring responses and creating a personalized customer service experience, renters are motivated to stick around, and strong relationships help to build and grow a sustainable business. 

Tenant Screening

Property managers use online tenant screening for quick and easy tenant screening to fill vacancies with the right people. By allowing a management company to handle tenant screening, property owners will be shielded from rental scams and will have more reliable tenants. This kind of experience takes time and insomuch means avoiding bad tenants, scams, and lawsuits. Thorough tenant screening is arguably one of the most significant benefits a property management company will provide.

Easy Payments

Confirming rent payments and juggling the paperwork for a property’s expense payments (insurance, maintenance, taxes, etc.) is very time-consuming. Rather than property owners taking on this stress, a management team has the right tools for an easier owner, tenant, and vendor payment experience. Streamlining the payment process through online automation helps keep the books organized and maximize the owner’s return on investment.

Reach out to one of our skilled property managers to learn more about PRG Management’s tools for owners and tenants.

Recoup Losses & Rent Payments During COVID-19

The coronavirus pandemic has caused a spike in Illinois unemployment as people experience unexpected job loss and furloughs. As a result, Chicago property owners' are faced with the unprecedented dilemma of coping with multiple tenants who can’t afford to pay rent at the same time. With limited options, landlords/owners are left wondering how they can collect rent payments and recoup losses during COVID-19.

Below is a list of guidelines and resources to help Chicago property owners navigate this unusual time. 

Can tenants be evicted for not paying rent?

• According to Gov. Pritzker, the state won’t allow evictions while under the stay-at-home order. 

  • Cook County extended its suspension of eviction cases through May 18.

  • Properties with a federally backed mortgage (Fannie Mae, Freddie Mac, and other situations): the federal CARES Act includes a moratorium on filing eviction cases until July 25 for non-payment of rent and prohibiting late fees

• Evictions can still be filed during the order.

  • Once the stay-at-home order is lifted, landlords will be able to move forward with eviction cases that were filed during the crisis.

  • If tenants are not currently paying rent, they may be locked out/evicted once the case goes through

For more tenant rights, please visit the Metropolitan Tenants Organization.

Offering Discounts or Deferring Rent Payments

In conjunction with tenants pleas, Mayor Lightfoot asked property owners to “give tenants some grace, whenever possible during these trying times.” To help, many landlords/owners are offering to discount or defer rent payments as tenants adjust to COVID-19.

Below are options for property owners who want to differ rent payments.

• Paying back deferred amount in equal parts

  • Offer tenants to sign a lease amendment that agrees to defer collection of the May rent & obligates the tenant to pay it back in equal parts over the remaining months. 

  • EX: Rent is $1200 per month and their lease is up in 3 months, the tenant could pay $0 May but would agree to pay a total of $1,600 in each of June, July & August

• Allowing the use of security deposits

  • Offer to refund the tenant’s security deposit on the condition that it’s used to pay May rent & would not receive it once they move out.

  • Include that any repair charges will be separate if there are damages upon the time of moveout.

• Allowing use of last month’s rent prepayment (if the lease required one)

  • Owners can offer tenants a lease amendment that allows the use of the initial pre-payment for May rent. 

Property owners have several ways to support tenants during this difficult time. Be sure to consult an attorney and document any rent relief effort with a lease amendment signed by both landlord and tenant.

How can property owners recoup losses?

During the Coronavirus pandemic, property owners may find financial relief through a variety of local programs. Landlords/owners who have allowed delayed or skipped payments on rent are even more likely to receive help. Every landlord operation is different, and each one should carefully consider which program is best for their needs.

SBA Paycheck Protection Program:

• The CARES Act federal relief package created a new SBA loan program called the Paycheck Protection Program.

• Funds can be used for mortgage payments, rent, utilities, and certain other existing debt obligations.  

• Multifamily owners may qualify as small businesses for the purpose of these loans.

Learn more about the Paycheck Protection Program on the SBA website.

SBA Economic Injury Disaster Loans & Loan Advances

• Loans are for business owners in Illinois suffering from temporary losses of revenue.

• Like all lenders, the SBA will evaluate the creditworthiness of your operation before extending funds.

• Multifamily owners may qualify as small businesses for the purpose of these loans.

The instructions and the forms required for loan applications can be found on the SBA’s website and more info on disaster relief funds are there as well.

Resiliency Fund

• The City of Chicago has launched the Chicago Small Business Resiliency Fund, which will help to provide small businesses with emergency cash flow.

• Multifamily owners may qualify as small businesses for the purposes of these loans. More information on eligibility is expected soon.

Learn more about the Resiliency Fund here

For assistance property management, please feel free to reach out to us and our team of experts.

City of Chicago Side Walk Repair Program

If you are a Chicago property owner or Chicago property manager and want to take advantage of free assistance to help alleviate the costs of your concrete sidewalk repairs, there is a program you need to sign up for this upcoming week. The Shared Cost Sidewalk Program is a great benefit to owners who want to share the cost of their sidewalk repairs with the City of Chicago.  Over thousands of Chicagoans have previously been a part of this great program and the city expects similar numbers this year as well.

Chicago property owners will have 24 hours to apply for the 2020 shared cost sidewalk program starting at 6 A.M. on Tuesday, January 7th and ending at 5:59 A.M. on Wednesday, January 8th.  This program highly benefits owners who have sidewalks that are within the public right of way and are not vaulted or custom. The cost per square foot that will be charged to the property owners is well below the price of a private contractor. Senior citizens and persons with disabilities are also eligible for a 50% discount when using the program.

According to the city, costs for sidewalk repairs can range anywhere from $600-$1,500 for a standard job. This program will be a great service for owners who are wanting to cut those prices in half this year.

The number of participants the city will accept is based on the availability of funds. It is also a first-come, first served basis, so owners need to act quickly!

To submit an application for this beneficial program, you can apply online at 311.chicago.gov. All applicants should specify that they want to participate in the Shared Cost Sidewalk Program, if they are a senior or have a disability, and they need to provide the property owner’s full name, contact number, email, and the property’s full address. There are also other items you can ask for such as wanting a courtesy walk or landing step installed or if you are interested in removing and replacing your driveway apron (if applicable).

You can also apply by calling 311 or 312-744-5000. The city is expecting a high interest in this program and will have extra 311 operators on hand to field calls. Contact your Chicago property manager or contact our office if you would be interested in having our team submit the request on your behalf.

The city has put together a useful list of frequently asked questions and some more information on the program that you can view by going here: https://www.chicago.gov/content/dam/city/depts/cdot/sdwlk/sharedcost/SCSP_FAQ_2019.pdf

Should You Require Tenants to Have Renters Insurance?

As a landlord with a lot of stake in owning a multifamily property, it’s important to protect your assets at all costs. Requiring your tenants to obtain renters insurance will be that extra layer of protection that you may need. It’s better to be over cautious than under prepared! Renters insurance is relatively inexpensive and shouldn’t be a deal breaker for most tenants. As a Chicago property manager, we recommend all owners to require tenants to have renters insurance.

What is the advantage?

For one, it keeps you (the landlord) out of court! If something happens to a tenant’s belongings or someone gets hurt in the tenant’s apartment, having renters insurance will prevent the tenant from going after the landlord. Renter’s insurance policies generally have a minimum limit of $100,000 general liability, which can cover a majority of damage to the property or any damaged or missing personal belongings.

For example, say a pipe burst and damages the unit, some personal belonging in it, or even the unit below it. Renters insurance would be able to cover a majority of the cost! Say your tenant hosts a party it results in someone getting injured, the first person that typically that gets contacted to cover the damage will be the owner/landlord. If the tenant had renters insurance, the owner/landlord wouldn't have to deal with it. Essentially, the landlord will be covered for any scenarios like this that fall under the renter's insurance maximum coverage.

It also keeps you from renting to a bad tenant. If a tenant complains about having to pay this, generally, affordable monthly cost of renters insurance, then maybe that is not a tenant you want to have in your building. There is nothing wrong with a tenant wanting to stay within their means, but this minor detail could be telling of their ability to pay rent.

So can you require your tenant to purchase renters insurance?

Absolutely, as long as you require it of all your tenants! This requirement should be included in your rental lease agreement and should be reviewed with the tenant so it’s clear (as people often don’t read the terms in fine print). It would even be helpful to make this known in your rental listing so people are aware upfront.

As a Chicago property manager, renters insurance is a great line of defense in the case of an emergency for all parties involved. There are no disadvantages to requiring this of your tenants, so any owner should think about implementing a required renters insurance policy. 

Understanding The Role of a Property Manager

A property manager acts as a third party who is hired by a landlord or property investor to manage the day-to-day operations at a rental property. The exact responsibilities vary depending on the type of property, the terms of the contract, and the type of services that company provides. Understanding what a property manager does, and whom they are to you will increase the likeliness that all parties involved are happy.

To the owner…

A property manager acts as a mediator between you and your tenants. This prevents tenants from constantly bothering you about things that you are potentially unable to deal with. The property manager will handle the rent collecting, property maintenance, managing budgets and keeping track of important records. Many times the owner of an investment property does not live at the property and most likely works a day job, making it difficult to handle these kinds of things, and hiring a property manager will ease the situation. You’ll have an ease of mind knowing that there is someone else out there helping take care of your property.

To the tenant…

You will go to the property manager for any issues you have with your lease or rental property. The property manager is being paid to deal with maintaining your property and noise complaints or any other emergent situations you may have. But you have to keep in mind that the property manager has strict budgets and requirements given to them from the property owner, and may not be able to give you everything you ask for.

Understanding what a property manager is and who they are to you will make their role easier on everyone. Property managers have a tough job, but they also have thick skin and know how to deal with these situations in the best way possible.

If you have a property and are in need of a property manager, consider Two Blue. We have a great reputation for our provided services, and we'll even give you a free estimate!