What to Know About the 2021 Illinois Rental Payment Program

The Illinois Development Authority will be accepting applications for the Illinois Rental Payment Program (ILRPP) on Monday, May 17 at 9 a.m. 

As an emergency rental assistance program, ILRPP is designed to help Illinois households that are unable to pay rent due to the COVID-19 pandemic. The program is funded by a $500 million grant that will help thousands of renters avoid eviction so they can remain safe during the pandemic.

Grant Information

The maximum grant amount is $25,000 per tenant and the approved amount will be given directly to the owner. Applicants are eligible for up to 15 months of assistance, paying up to 12 months of missed rent payments and up to three months of future rent payments. The coverage period is June 2020 through August 2021.

Application Process

The emergency rental assistance is free to tenants and owner/housing providers so there is no application cost. To receive funding, both the owner and tenant must submit a joint application and provide valid email addresses, a long with additional household information to apply. If the application is approved, the grant will be paid to the owner/housing provider in the form of a check.

Owners are highly encouraged to reach out to tenants to discuss the application process and begin preparing materials. Your property management company should also be able to assist in connecting with tenants. 

Additional Program Details

For additional information on the Illinois Rental Payment Program, including eligibility and documentation requirements, please visit www.ihda.org/ilrpp. All ILRPP applications must be submitted online at ILRPP.IHDA.org and will be accepted starting on Monday, May 17. 

Housing Provider Frequently Asked Questions: CLICK HERE
Tenant Frequently Asked Questions: CLICK HERE

Spring Cleaning Tips to Improve Rental Property ROI

There’s nothing better than Springtime in Chicago. The weather gets warmer, flowers start to bloom, and people are outside ready to enjoy the sun. Spring is also the start of renting season. For rental property owners this means seasonal maintenance and building updates. To help owners maximize renting season, we’ve put together a Spring cleaning checklist that will help improve ROI for rental properties.

External Maintenance

Clear Debris:

Gutter and downspouts clogs are very common after fall and winter. Inspecting and clearing out gutter debris is a critical step to avoiding external building damage. This can be done with a garden hose or owners can contact their property management company to take care of any larger issues.

Boost Curb Appeal:

Spring season means warm weather, and warm weather means that people will be spending more time outside walking around. One of the easiest ways an owner can boost property return is through landscaping and creating curb appeal. This includes trimming trees, planting flowers, power washing the building, and creating an overall welcoming environment. Not only will the curb appeal attract new potential renters but it will also keep current residents happy.

Inspect Roofing:

Cold Chicago weather can cause shingles to loosen up, allow rain to seep into the foundation, and cause major problems. The cold also means animals are looking for spots to keep warm and the roof to a rental property is an easy target. This is why it’s important for property owners to have the roof inspected every spring. They should be on the lookout for water damage, loose shingles, and any potential access points for animals. This maintenance will also help prevent bugs and insects from nesting under the roof when they emerge with the warm weather.

Internal Maintenance

Building Updates:

Spring cleaning extends to more than just clearing out clutter. Properties that have common areas like a lobby, mail room, hall entrance, workout space etc., should be thoroughly inspected and considered for updates. Building updates are a great way for owners to improve property ROI and can be as simple as repainting or adding interior décor. When a space looks fresh and modern, it boosts property appeal, attracts new renters, and improves the building’s overall status. A more luxurious feel/look to a property provides owners the opportunity to adjust the cost of rent to match the new features.

HVAC & A/C Checks:

Air conditioning systems can be affected by the low winter temperatures. This can cause problems when residents decide it’s time to start up the A/C so a proactive approach is best. A/C maintenance includes things like checking panels, pipe insulation, outdoor coil, and filter replacement. Changing furnace and A/C filters ensures that residents are getting the most from the property’s HVAC systems and can prevent costly repairs in the future. These small but necessary maintenance tips will help maintain current tenant relationships and gives them the opportunity to leave positive feedback which can attract future tenants.

If you’re a home owner ready to sell, check out Pearson Realty Group’s tips for getting your home ready for the market. Click here to learn more 〉〉

Update: Illinois Eviction Moratorium

Governor Pritzker extended the Illinois eviction moratorium to April 3, 2021. Executive order 2021-05 was signed on March 5th and included both an extended moratorium and made a change to the procedures for evictions.  

What’s new:

Imminent threat / Dangerous Tenants case: Once a landlord receives an Illinois Tenant Declaration from a tenant, they may only proceed with the eviction if the tenant: 

• Pose a direct threat to the health and safety of other tenants 

• Are an immediate and severe risk to the property

 This means that emergency evictions can move forward even if a tenant is a “covered person” under the executive order. 

Who is a “Covered Person”:

Tenants are considered a “covered person” if they meet all four of the following:

1. INCOME: At least one of the following applies to me:

(i) I expect to earn no more than $99,000 in annual income for Calendar Year 2020 (or no more than $198,000 if filing a joint tax return), or

(ii) I was not required to report any income in 2019 to the U.S. Internal Revenue Service (IRS), or

(iii) I received an Economic Impact Payment (i.e., the stimulus check) pursuant to Section 2001 of the CARES Act.

2. INABILITY TO MAKE PAYMENT DUE TO COVID-19: I am unable to make a full rent or housing payment due to a COVID-19 related hardship including, but not limited to, substantial loss of income, loss of compensable hours of work or wages, or an increase in out-of-pocket expenses directly related to the COVID-19 pandemic.

3. BEST EFFORTS: I am making my best efforts to make timely partial payments that are as close to the full payment as my circumstances permit, taking into account other expenses that I must pay (e.g.,food, utilities, phone and internet access, school supplies, cold-weather clothing, medical expenses, child care, and transportation costs, including car payments, maintenance, and insurance); 

4. AT RISK: If evicted, I would likely become homeless, or be forced to move into and live in close quarters in a new shared living setting because I have no other available housing options.

 

Additional Protection to Renters:

Chicago’s Eviction Protection Ordinance was approved in June 2020 and is still in effect. The ordinance requires that landlords extend a seven-day cooling off period if tenants respond to the five-day notice with a Tenant Notice. The tenant has to prove unpaid rent stems from financial hardship that are caused by the pandemic. The Ordinance is meant to help protect tenants from loss of shelter, while protecting landlords by requiring tenants to pay rent.

What happens if rent repayment negotiations fail?

Tenants who are served with an eviction notice after failing to pay rent are covered under the COVID-19 Protection Ordinance. The ordinance does not apply to other material breaches of the lease agreement. This does not mean that tenants are free from paying rent. They are still responsible for outstanding rent balances.

If a landlord decides to move forward with eviction fillings over unpaid rent, they will need to prove to a judge that they made an effort to work with the tenant first. Landlords must show they entered good faith negotiations with the tenant including repayment plans or mediation efforts.

However, landlords should be mindful that even after proving a willingness to accept late payments the eviction process may not proceed. Additionally, in order to accept partial payment the landlord must back out of the eviction process and start over with a new five-day notice. Landlords must also have a letter that requests “strict compliance” with payment deadlines.

What about the CDC’s temporary eviction moratorium?

Since Illinois has a moratorium on residential evictions that provides the same/higher level of public health protection than the CDC’s order, the CDC’s moratorium does not apply. However, if the moratorium is not extended after April 3, 2021, the CDC’s order will apply. This would provide a temporary hold for qualifying IL renters for almost two more months.

Click here to read the full executive order.

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.

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.

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.