Foreclosure: a Renter’s Perspective

Foreclosure: a Renter’s Perspective

Following is a recent letter from a client describing her experiences living in a recently foreclosed apartment building and dealing with the new bank owners. Her words resonate in a way that ours cannot. We wanted to share her letter with you, as your support is what makes our interventions in these situations possible. Thank you!

I, and most of the tenants in my bank-owned building, would have given up our rights out of frustration and fear if it were not for the services of Lawyers’ Committee for Better Housing.

We had known for some time that our building was in the process of foreclosure. But we were not worried because we knew the Keep Chicago Renting Ordinance (KCRO) required the bank to either renew our leases or pay a $10,600 relocation fee. However, our collective peace of mind began to crumble as we came to understand that the bank was neither equipped nor inclined to perform the basic duties of a landlord. Soon after, our anxiety rose even further, as the bank engaged in scare-tactics designed to persuade us to move out on our own accord (therefore circumventing the requirements of the KCRO).

Thus far, the bank has used two tactics. The first is a passive approach: they benignly neglect the responsibilities of building management. The second is more aggressive, entailing periodic eviction threats. The only reason these tactics are not working is because we are represented by Lawyers’ Committee for Better Housing.

The benign neglect of our building started with the dumpster. Like many people facing foreclosure, our landlord was behind on utility payments. By the time the bank’s ownership became official, we’d been without the dumpster for three weeks. When I called to inform the bank about the issue, I was treated to a ride in a bureaucratic wormhole. We’ve all been there: every person I talked to told me to call a different department until I’d looped back around to the first department I’d called. My first reaction was to marvel at their incompetence—the bank must deal with similar situations all the time, I thought, how hard could it be to hire a property manager? But I discerned a more calculated strategy when I learned they were efficient enough to hire a lawyer to deny any responsibility for building maintenance: if they drag their feet with maintenance responsibilities—even going so far as to stall in court—many tenants will choose to move out on their own accord. I certainly considered it. The dumpster was one thing, but what was next? Water? Heat in the winter? Luckily, one of my neighbors had reached out to our Alderman’s office. A staff member there arranged for an emergency court hearing. The judge assigned a temporary receiver to handle basic maintenance and rent collection. Our contact at the Alderman’s office also contacted Mark Swartz from LCBH, who observed our hearing and later met with all of the tenants attending the hearing. He and an intern spent over an hour answering our questions and offering advice. Mark suggested we get organized by forming a tenants union, which we did, and promised to consult with the other LCBH lawyers about taking on our case for free, given that we were unable to afford lawyers on our own.

The bank’s second strategy, the eviction threats, probably would have worked on us if LCBH had not decided to take on our case. The first time I heard the e-word was in court, when the bank’s lawyer told the judge that they would not yet evict our former landlord (who was and is residing in the building) because “when the bank moves to evict they’ll be evicting the whole building.” Later, I spoke to the bank’s real estate broker on the phone who said “once the bank meets their legal responsibilities they’ll evict everyone in the building.” Then came the most blatant threat. In a letter taped to each tenant’s door, the real estate broker I had spoken to earlier demanded we contact her within five days or “the bank will begin the eviction process.” I sent that letter to our LCBH lawyer, Aileen Flanagan, immediately. She assured me that the bank had no legal authority to carry out this threat. Nonetheless, the next day, the bank’s lawyer told Aileen that he planned to ask the court to vacate the building on the grounds that none of the tenants had paid rent. Luckily, the bank’s lawyer was mistaken: we were all current on our rent. But I’m sure that in 9 out of 10 of these cases, tenants don’t pay rent. How could they when the bank never tells tenants where/who to send the rent? (Worse, some people might be tricked into paying rent to their old landlords – ours had tried that by promising to restore garbage collection, and threatening to cut off other utilities.) We were spared because we had already sent our rent to the building’s receiver. We sent proof of payment to Aileen, and at least at that hearing, the bank did not ask the judge to vacate the building because they had no leg to stand on.

By the time of this second building court hearing, we had been working with the LCBH for a few weeks. With their help we had two minor victories. First, the court recognized the tenants’ union as a legitimate entity with an interest in the case between the City of Chicago and the owner of our building over their maintenance responsibilities. The lawyer for the bank vehemently objected to the existence of the tenants’ union in an attempt to derail our motion, deny us the opportunity for representation as a collective, and generally make our lives more difficult in the hopes that, again, most of us would move out of the building on our own accord. The second small victory was the judge accepted the motion that Aileen presented on our behalf to order the bank to change the locks on all of the tenant’s units. We felt this was necessary since our former landlord still lives in the building and has a master key.

We still have a long way to go. The bank tells us that they haven’t had time to determine whether the leases that we sent them are valid, or whether they want to be landlords or pay us to leave. We anticipate a fight about the validity of our leases, and another fight to recover our security deposits when the time comes. (Our former landlord claims that the bank has them. The bank says our former landlord has them.)

I know my lease is valid and that I will be entitled to my security deposit when I move out. I understand my rights under the KCRO. But only a lawyer specializing in these issues is equipped to take on a bank . Their lawyers are very good at silencing tenants, exploiting anxious uncertainty about their living situation, and finding loopholes that enable the bank to avoid their responsibilities under the law. LCBH is generously providing us with their expertise. I don’t know what we’d do without it.