Property Management Training Manual

written by

Larry E. McCarthy

published by

A practical guide for developing a property-specific procedures manual

Residential

Property Management

Procedures Manual

LARRY McCARTHY,

Capacity Building Program Director for

Community Investment Corporation, began

his property management career in 1971.

Recognizing that spiraling costs of building

locked more families out of decent housing

each year, McCarthy decided to work on

finding solutions to the needs of lower

income families. This decision led him to

the Illinois Housing Development Authority

(IHDA) in 1978. During his four years

with IHDA, he was involved with the

management of more than 6,600 affordable

apartments throughout Illinois and was a

member of the agency’s team assigned to

turn around troubled properties.

McCarthy is a nationally recognized

affordable housing management expert. He

served for nine years as the President of

RESCORP Realty, Inc., which managed a

multi-family rental housing portfolio in the

Chicagoland area. Under McCarthy’s

guidance, that portfolio expanded from

1,600 to more than 4,000 rental units.

In July of 1991, a joint venture partnership

that McCarthy formed between RESCORP

Realty and Frank J. Williams Realty was

awarded the management of the Chicago

Housing Authority’s innovative Lake Parc

Place. Under McCarthy’s leadership, Lake

Parc Place received worldwide recognition

for excellence in publicly funded housing.

After touring Lake Parc Place, housing

officials from virtually every state in the

nation as well as dozens of foreign

About the Author

Residential Property Management Procedures Manual

countries praised the quality of the property

management. Newsweek magazine called

Lake Parc Place “A housing program that

actually works” and CNN described the

property as “the best managed public

housing in the country”.

McCarthy was the Chairman of the

Chicago Board of Realtors’ Property

Management Council from 1988 to 1989.

He co-founded and served as President of

the Property Management Resource Center,

a non-profit corporation formed to provide

property management expertise to groups

who develop low and moderate-income

housing. In addition Mr. McCarthy has

been a member and director of the

Apartment Building Owners and Managers

Association (ABOMA) and a director of the

Chicago Association of Realtors, where he

also served as Chairman of their Govern-

ment Affairs Committee. He was a co-

founder and served as a director of The

Real Estate Job Bank, an organization

dedicated to employment opportunities for

minorities within the real estate industry.

Previously McCarthy worked for Draper &

Kramer (D&K), Inc. where he oversaw a

portfolio consisting of over 1,900 urban

and suburban residential apartments and

400,000 + sq. ft. of retail shopping centers.

Prior to joining D&K, McCarthy was a

regional Vice President with Security

Pacific, Inc. a property owner based in

Seattle, Washington. He was responsible for

the Midwest region, which included over

11,000 apartments in a five-state region.

Acknowledgements

We wish to thank the following individuals

who have provided either materials that are

included or assistance in the production of

this manual.

■ Sue Brady

■ Pam Gecan, American Marketing

Services for her assistance in Marketing

■ David A. Schucker of The

Leadership Council for Metro-politan

Open Communities

COMMUNITY INVESTMENT CORPORATION

Community Investment Corporation (CIC) is a mortgage banking firm created in 1974, by Chicago’s

banking community. Fifty-one banks, plus Peoples Gas, Fannie Mae, and the Untied Methodist

Pension Fund, share proportionally in each CIC loan.

CIC’s mission is “to be the leading force in neighborhood revitalization through innovative financing

programs.” CIC is intended to serve as a catalyst for needed rehab lending and to foster the success

of cost-effective developers.

CIC specializes in multifamily rehabilitation lending. In its first 15 years of multifamily lending,

1984 to 1999, CIC has made 1092 loans totaling $415 million in CIC funds on buildings with

28,000 apartment units. CIC borrowers have received over $500 million in various financing

programs including no or low interest financing, tandem processed, and government second

mortgages. About 20% of CIC loans have government second loans.

CIC takes pride in its ability to offer timely loan processing and support through its dedicated and

experienced loan officer, construction review and closing staff.

CIC is committed to increasing the professional skills and knowledge of hands-on building owners

and property managers. In 1999 CIC will conduct fifteen basic level courses in property manage-

ment and maintenance. The courses will be conducted over four consecutive evenings, three hours

per evening, throughout the Chicagoland area. Additional one evening courses are regularly held on

seasonal topics such as landscaping (spring) or energy savings and heating systems (fall), plus

regular topics related to rehabilitation.

In the first ten of its twenty-five years, CIC helped pioneer single family rehab lending in low and

moderate income communities, providing $15 million in loans to rehabilitate 989 single family

units. CIC also provided home ownership counseling and technical assistance to 2,500 families.

Call CIC at (312) 258-0070 for information on loan products and rates, or to find out about training

sessions near you.

iii

Foreword

Residential Property Management Procedures Manual

Table of Contents

Introduction ......................................................................................................... page 2

1 New Property Take-Over ................................................................................. page 4

2 Tenant Selection Plan ..................................................................................... page 9

3 Fair Housing .................................................................................................. page 21

4 Marketing ...................................................................................................... page 36

5 Tenant Handbook ......................................................................................... page 42

6 Rent Collection ............................................................................................. page 51

7 Evictions ....................................................................................................... page 53

8 Enforcement ................................................................................................. page 59

9 Illegal Activities............................................................................................. page 60

Budgeting ...................................................................................................... page 65

Maintenance ................................................................................................. page 70

Residential Property Management Procedures Manual

Introduction

here was a time when the

ownership and management

of an apartment building

were largely unregulated. Landlords

were virtually free to rent and operate

their property in any fashion they

deemed reasonable. All you really

needed was the money for a down

payment, a building to purchase, a

cooperative lender and you were in

business.

Times have changed. Today’s

apartment industry has become

considerably more regulated. Land-

lords must comply with many Fair

Housing laws. In addition, some

municipalities regulate the way

properties are managed as well as the

manner and speed in which landlords

service the maintenance needs of

their tenants. Among the require-

ments today’s landlords face are set

minimum amounts of heat in the

winter and the installation of early

warning devices to protect against

smoke inhalation and carbon monox-

ide poisoning.

The task of managing residential real

estate has grown increasingly depen-

dent upon the ability to skillfully

operate within both the demands of

the marketplace and the laws that

regulate the industry. Today’s

property manager must be able to

compete with the manager of the

building down the street for suitable

tenants and, at the same time,

comply with federal, state, county

and local fair housing laws. In many

cities, including Chicago and smaller

municipalities, landlords must

comply with tenant/landlord ordi-

nances and with rules concerning

illegal activities committed by

tenants. Failure to comply can, in

some cases, result in seizure of the

property.

The key to successful operation of

any property is planning. All prop-

erty owners need a written plan

guiding the day-to-day operation of

their buildings. In fact, the actual

planning should start prior to

purchasing a property. Pre-purchase

planning should include deciding in

what neighborhood or area you want

to buy, what size building you want

to buy, and what mix of bedroom-size

apartments you want. You will also

have to decide whether you want to

buy a fix-it-upper, a brand new

building, or something in between.

Additional planning should include

how and where to finance your

purchase, how much equity you have

available and want to invest, and

what improvements you want to

make upon closing the purchase.

Once you’ve answered these ques-

tions, you’re ready to decide on a

host of management and mainte-

nance issues including the prepara-

tion of written plan on how to

address those issues. This manual is

intended as a guide for owners and

managers of multi-family buildings

for use in creating an operations

manual for their own specific prop-

erty. This manual contains proce-

dures and policies that have been

employed in various types of build-

ings throughout the Chicago metro-

politan area. With minor modifica-

tions, this procedures manual will

serve the needs of most multi-family

building owners and managers.

When it comes to rental policies,

every owner must recognize that the

rental policies you develop must be

documented and enforced. Whether

they are based on objective rules or

subjective preferences, rental policies

must be put in writing and applied in

a fair and equal manner to everyone

who inquires about, makes applica-

tion for, or rents in your building

Negligence in the operation of a

building can and often will result in

legal liability for any violations.

Ignorance of the laws is no defense.

If you plan on owning or managing

an apartment building, you must be

aware of the rules and regulations

that affect the way in which you

operate that building. Once you

know those rules and regulations, you

must manage yourself and your staff

in a manner that will not jeopardize

your business or the building.

This manual is intended to enable

you to manage your property more

skillfully. The end result is that you’ll

be better able to obey the law, achieve

financial success, and be a valuable

asset to the community.

Residential Property Management Procedures Manual

aking over or assuming

either the ownership or

management of an apart-

ment building requires a systematic

approach to the many tasks that

usually await a new manager or

owner. There are numerous details

beyond the closing table that you

must learn and address in a timely

and proper fashion in order to insure

that you start out on the right path.

If you are purchasing an existing

property, the first step to a smooth

takeover is learning as much as

possible from the seller. You’ll usually

find that sellers are cooperative and

willing to take the time to answer

questions about the property. To

make your information gathering

session as effective as possible,

prepare questions in advance and

keep detailed notes of the answers

you receive. The New Management

Assignment Takeover Checklist at

the end of this section provides an

excellent starting point. It contains a

list of the key information you’ll

want to gather from the seller.

New Property Take-

Over Procedures

Tenants of a newly acquired building

are also prime candidates to provide

valuable information. Typically a

property takeover will be the first

meeting or communication between

the new management team and the

tenants of the building. This can be

an excellent opportunity for you to

set a positive tone for your future

dealings with the tenants of the

building. If not carefully planned,

the first meeting could be poorly

handled and result in a combative

and potentially disruptive relation-

ship with the tenants of the building.

Many novice property owners or

managers start out with the belief

that it’s their building, and they’ll

run it the way they see fit. They

often mistakenly start with attitudes

such as—

■ “The tenants, after all, are just

renters who can be easily replaced.”

■ “Why should I cooperate with

renters? They’re the enemy in the

Tenant Landlord Wars. It’s my

building. I’ll call the shots.”

When properly approached, the

tenants of the building can be among

your most valued allies. They

typically are more familiar with the

physical property than you are, and

they are certainly more aware of

potential problem tenants. Tenants

help you pay your mortgage and

operating expenses. If things go as

planned, they will put profit dollars

in your pocket. Many tenants take

great pride in the place they have

chosen to call home and will enthusi-

astically assist you in keeping the

building up and finding new tenants

when you have a vacancy. Why

would you want to start out the

relationship with your tenants on an

antagonistic note when what you

really need and should want is a long-

term harmonious relationship?

When a building was previously

mismanaged, has some tenants who

may be involved in illegal activities,

or was allowed to fall into disrepair,

tenant cooperation at initial takeover

is especially important. In these cases

you will face some tenants who are

skeptical of your intentions and

others who don’t wish to upset the

status quo. You will need to quickly

enlist the help of those tenants who

are most likely to cooperate in your

quest to improve the overall condi-

tion and reputation of the property.

Existing employees, as well as

vendors who previously provided

services to the property are also

valuable sources of information. In

cases where little historic information

about a building is available, these

individuals can help you gain the

information you need to make a

smooth transition and get off to a

positive start. They’ll also help you

answer questions like, “Where are the

hidden flaws? What are the extra

special maintenance needs? How

were things handled in the past?”

This is all important information that

can assist you in future planning.

It can be useful to ask the same

questions of each of the groups

(sellers, employees, vendors and

tenants). You may end up with

completely different answers based

on the varying perspectives. While

that may appear to be troubling, it

can also be insightful. For example,

if you ask how well the hallways are

maintained, it’s not uncommon to

receive different impressions from

the janitor and the tenants. In this

example, the tenants’ impressions are

more reliable.

You will want to learn about the

tenants of the building from the

seller, from the other tenants, and

from the janitorial and maintenance

staff. You’ll learn which tenants are

good neighbors and which aren’t?

You’ll also find out who might have

someone living with them who is not

on the lease? Which apartments

have a high number of visitors at all

hours of the day? Who plays their

music so loud that they disturb other

tenants? Which tenants have guests

that hang out in the hall and leave

garbage about? The answers you

gather can prove very valuable as you

move forward.

Residential Property Management Procedures Manual

Location(s) of Property _________________________________________________________________________

__________________________________________________________________________________________________

Take Over Date ____________________________________________________

Building Phone Number ___________________________________________

Previous Management Firm ________________________________________

Contact Person(s) __________________________________________________

Telephone # _______________________________________________________

Existing Personnel _________________________________________________

___________________________________________________________________

New Management Assignment Takeover Checklist

Verify Occupancy:

Are fully executed current leases in place?

Yes ____ No ____

Are all rents current?

Yes ____ No ____

Is there a list of all residents with both home &

work phone numbers?

Yes ____ No ____

Have the security deposit amounts been verified?

With Lease Agreements?

Yes ____ No ____

With Tenants?

Yes ____ No ____

Are there any pending legal actions involving

tenants?

Yes ____ No ____

Have all vacant units been viewed to assure they

are vacant?

Yes ____ No ____

Are all delinquent renters in possession of the

units they lease?

Yes ____ No ____

Have all delinquent renters been served Termina-

tion Notices?

Yes ____ No ____

Services requiring assurance of continuation:

Has the electric company been notified of changes

and made final readings?

Yes ____ No ____

Has the gas company been notified of changes and

made final readings?

Yes ____ No ____

Has the water company been notified of changes

and made final readings?

Yes ____ No ____

Has the scavenger company been notified of the

change in ownership/management and billing?

Yes ____ No ____

Have you provided for ongoing janitorial

services?

Yes ____ No ____

Have you provided for ongoing maintenance

services?

Yes ____ No ____

Have you provided for ongoing landscape

services?

Yes ____ No ____

Building Code Issues:

Are there any existing Notices of Violations?

Yes ____ No ____

Does each unit have an operating smoke detector?

Yes ____ No ____

Are carbon monoxide detectors in place?

Yes ____ No ____

Are there proper locks on windows and doors?

Yes ____ No ____

Are all windows and screens in good repair?

Yes ____ No ____

Has the building been properly registered with

the city?

Yes ____ No ____

Emergency Procedures:

Have you contracted with an answering service for

after hours?

Yes ____ No ____

Have current residents been informed of any

changes that they’ll be required to make?

Yes ____ No ____

Have emergency point people been identified

and provide with your emergency procedures

plan?

Yes ____ No ____

Have emergency service providers been identified

and contracted with?

Yes ____ No ____

Residential Property Management Procedures Manual

Reports from Previous Owner/Agent:

Regulatory Agreements

Financial Reports

Inventory

Security Deposit Listing

Waiting Lists

Legal Actions

Current Billing

Personnel Records

Service Contracts in Place:

___________________________________________ terms ________________________________________________

Immediate Actions Needed:

__________________________________________________________________________________________________

Comments:

__________________________________________________________________________________________________

Completed By ________________________________________________ Date ______________________________

electing tenants is likely to

be one of the first issues you

face. It is also one of the

most important issues in the opera-

tion of your building. You can limit

management difficulties by properly

preparing a Tenant Selection Plan and

applying it to everyone who inquires

about renting at your building. A

well thought out plan will be far

more effective than the “gut instinct”

approach to tenant selection. Yet the

common reaction to the suggestion

that landlords need a Tenant Selec-

tion Plan is something like, “Why do

I need a Tenant Selection Plan? I’ll just

place an ad in the paper and rent my

vacant apartments to whoever responds

to the ad so long as they look like they’ll

be good tenants”!

Tenant Selection

There are many reasons to develop a

well thought out Tenant Selection

Plan. A Tenant Selection plan will

create objective measures that can be

used to determine which applicants

are more likely to be good tenants.

A good plan will, at least, review an

applicant’s:

■ credit history

■ previous landlord references

■ number of people who will reside

in the apartment and will verify:

■ employment

■ income information.

Failure to perform basic background

checks can result in leasing an

apartment to a bad tenant who not

only won’t pay rent but may also

destroy your building and its reputa-

tion. The end result is a combination

of emotional stress, financial burdens

from lost rental income, and possible

damage repair costs. A loud and

obnoxious tenant may also drive

good tenants from the building.

Though it is possible to evict bad

tenants, eviction can take months

and hundreds of dollars to accom-

plish.

A good Tenant Selection Plan won’t

guarantee that you will never rent to

a bad tenant, but it can lessen that

risk. A good plan carefully applied to

every applicant will also provide

safeguards against possible violation

of fair housing laws.

The following sample tenant selec-

tion plan is intended as a guideline.

The building owner and managers

must set the standards for occupancy,

income, and previous rental and

credit history. The sections in bold

italics are areas that you should

modify to fit the standards you

decide upon.

Residential Property Management Procedures Manual

Sample Tenant Selection Plan

I. INTRODUCTION

This Tenant Selection Plan outlines procedures that will be followed in selecting new tenants for the Your

Apartments building. All apartments within the property will be leased in accordance with all applicable

fair housing laws regardless of race, color, creed, religion, sex, national origin, ancestry, familial status,

military discharge status, marital status, age, sexual orientation, or handicap of the applicant(s).

II. RENTAL UNITS

Your Apartments will offer 6 rental units. The number of rental units at the property that are reserved for

rental households are as follows:

Size of Unit Number of Units

1 BR ........................................................ 2

2 BR ........................................................ 2

3 BR * ...................................................... 1

* One 3 BR apartment is designated as an owner/manager/model/office apartment and is not available for rent.

III. SCHEDULING SHOWINGS OF AVAILABLE UNITS

Contacting Interested Individuals

When a unit becomes available, a showing will be scheduled with interested individual, generated

from a waiting list or an advertising program, on a first come, first served basis. Management will

indicate what information the applicant should bring to complete a rental application.

IV. THE APPLICATION PROCESS

A. Application

Each prospective tenant will complete a written rental application. Management will charge a

$100 application fee. If the applicant is accepted, the application fee will be credited toward the

security deposit. If the applicant is rejected, the application fee will be refunded within fourteen

(14) days of the date of the rejection notice. If the applicant is accepted for occupancy but refuses

a unit, the application fee will be forfeited.

B. Credit Check Fee

In addition to the application fee, Management will charge a non-refundable credit check fee

of $25.00.

C. Verification of Information on Application

Management will take the following actions with respect to all written applications:

1. Order a written credit report.

2. Request a Verification of Employment or Income.

D. Home Visits

After Management has completed all other steps in the application process, Management will

conduct a home visit on all applicants living within a 25-mile radius of the building at the time

of the application.

V. ELIGIBILITY REQUIREMENTS

A. Income

Annual gross income of households in the building must be equal to or greater than the income

guidelines attached to this PLAN.

B. Households/Unit Size Limitations

The unit applied for must have enough bedroom space to accommodate the applicant’s household.

As a guideline, no more than two people will be permitted to occupy a bedroom. In selecting a unit

size for the applicant, management will balance the need to avoid over-crowding a unit with the

objective of maximum utilization of space. (Chicago’s building code requires a minimum of 125 sq.

ft. of floor area per person)

VI. SELECTION AND REJECTION CRITERIA

The fact that an applicant meets the eligibility requirements does not mean that the applicant will be a

suitable tenant. The prospective tenant must be able to fulfill lease obligations. In making this determina-

tion Management will consider various criteria, along with any related explanations offered by the applicant

concerning the facts involved, including changes in circumstance. Rejection of an applicant may be based

on one or more of the following criteria:

A. Insufficient/Inaccurate Information on Application

Management will consider whether the applicant refuses to cooperate fully in aspects of his/her

application process, or whether the information supplied has been intentionally falsified.

B. Credit and Financial Standing

1. Management will consider the applicants’ history of financial obligations, (including timely

payment of rent, outstanding judgments or a history of late payment of bills). If Management

rejects an application based upon the credit report, Management will give the applicant the

reason for rejection and the name of the credit bureau that performed the credit check. Appli-

cants will also be given the opportunity to have corrections made to the report.

2. Management will take into account inability to verify credit references. It will take into account

special circumstances in which credit has not been established (income, age, marital status, etc.).

Lack of credit history will not cause an applicant to be rejected, although, in such circumstances,

Management may require that a person with a history of creditworthiness guarantee the lease.

3. Management will consider whether the applicant demonstrates financial ability to pay the

monthly rent for the apartment.

Residential Property Management Procedures Manual

C. History of Residency

Management will verify and document the previous two years of housing for each applicant,

including applicants who were homeowners or lived with parents/guardians. As part of this

review, Management will consider whether the applicant or any other person who will be living

in the unit either has a history of criminal conviction for acts that involved physical violence to

persons or property, that endangered the health and safety of other persons; or that involved

the manufacture or distribution of a controlled substance or is currently addicted to, or

engaged in the illegal use of, a controlled substance. If an applicant is currently receiving treatment

for addiction to a controlled substance, Management will not reject the applicant so long as he or she is

acceptable as a tenant in all other respects. Management will consider all circumstances regarding

criminal activity as well as the period during which it occurred.

D. Unsanitary Housekeeping

Management will consider unsanitary housekeeping by the applicant. This criteria is not

intended to exclude households whose housekeeping is only superficially unclean or disorderly

if such conditions would not appear to affect the health, safety or comfort of other residents.

VII. ACCEPTANCE/REJECTION PROCEDURES

A. Acceptance Notification

Each accepted applicant will receive a written notification indicating the date that the rental unit

will be available for occupancy (Exhibit A).

B. Rejection Notification

Management will promptly send each rejected applicant a written rejection notice stating the

reason(s) for rejection (Exhibit B).

VIII. DOCUMENTATION

Management will document every step of the tenant selection process. Applicant files will be main-

tained by Management which will include, but not limited to, copies of the following correspondence:

Rental Application

Credit report

Housekeeping Report

Employment/Income Verification (see page 17)

Exhibit A - Acceptance Notice (see page 14)

Exhibit B - Rejection Notice (see page 15)

Exhibit C - Underwriting Worksheet (see page 16)

Previous Landlord Verification (see page 19)

Prepared By: ____________________________________________ Date: _________________________________

The Rental Process

he following basic steps should

be applied for everyone who

makes application for an

apartment at your building. Sample

forms that you may use are included

in this section.

RENTAL APPLICATIONS should be

completed and signed by everyone

interested in renting an apartment at

your property. All sections of the

application should be completed. Be

certain that those individuals who

will be responsible for rent payments

sign the application and authorize

you to investigate their credit history.

Requesting and photocopying a

photo ID can help verify the identity

of an applicant. Attach the photo-

copy to the application.

The UNDERWRITING WORK-

SHEET in this section is a form used

to determine the applicants’ ability to

pay the rental amount you are

charging. Information about the

applicants’ income, and existing debt

should be measured against the rent

and other associated housing ex-

penses. A sample form is included

along with suggested ratios of income

to rent and income to rent and other

debt. When you stay within the

recommended ranges, your chances

of receiving rents on a timely and

regular basis are likely to increase.

VERIFICATION OF EMPLOY-

MENT/INCOME forms guide you

through the process of determining

the employment status of the

applicants. This form should be filled

in and signed by the applicant(s) in

the appropriate spaces. The property

owner/manager can then mail or fax

the signed form to the personnel or

human resource department of the

employer. To ensure that the em-

ployer completes the form, do not

allow the applicant to hand carry the

verification form to and from the

employer. You may have to perform

a telephone follow-up in cases where

a response is not received within five

working days.

The CURRENT OR PREVIOUS

LANDLORD VERIFICATION

FORM is used to determine the

applicants’ current rental status as

well as previous rental history. This

form should be completed by the

applicant(s) and signed. The form

should then be faxed or mailed to the

current and a least one previous

landlord by the owner or manager.

Again, do not allow the applicant to

hand carry the form. Don’t be

surprised if telephone follow-up on

your part becomes necessary.

CREDIT REPORTS should be

conducted on every applicant who

has sufficient income to qualify for

your apartment. Select a Credit

Bureau that can provide rapid service.

Many companies can provide a report

within hours, while others might

require a day or two. Some bureaus

can provide additional services such

as eviction court searches and

criminal background checks. How-

ever, it’s important to realize that

they are likely to charge additional

fees for these services.

If you want to obtain access to public

records such as eviction cases,

judgments, liens, or criminal convic-

tions, you may wish to visit the

county building that serves your area.

Often the public can use computer

terminals for these background

checks.

Whatever methods you decide to use,

you must apply the same procedure

for screening everyone applying for

residency at your property. Failure to

apply the same procedures can result

in fair housing violations. The

following forms can help in selecting

tenants and may be modified for your

specific property. We encourage you

to choose selection criteria that can

be employed consistently and

speedily.

2 TENANT SELECTION

Residential Property Management Procedures Manual

EXHIBIT “A”

ACCEPTANCE NOTICE

DATE:___________________________________________

NAME:____________________________________________________________________________________________

ADDRESS:_________________________________________________________________________________________

CITY/STATE/ZIP:___________________________________________________________________________________

RE: YOUR APARTMENTS

Dear Mr./Ms.:_____________________________________________________________________________________

After careful consideration and review of your application and other tenant selection criteria, you have

been accepted for occupancy at Your Apartments. Your ______ bedroom apartment will be available on

________________________. Please contact our management office at (312) 555-1234 to make an appoint-

ment to sign your Lease Agreement and complete all other necessary paper work.

We look forward to your being an occupant at Your Apartments.

Sincerely,

Manager/Owner

REJECTION NOTICE

DATE:___________________________________________

NAME:____________________________________________________________________________________________

ADDRESS:_________________________________________________________________________________________

CITY/STATE/ZIP:___________________________________________________________________________________

E: APPLICATION FOR AN APARTMENT AT YOUR APARTMENTS

Dear Mr./Ms.:_____________________________________________________________________________________

Thank you for your recent application for a ______ bedroom apartment at Your Apartments. After

careful consideration and review of your application, we regret that we are unable to accept your applica-

tion for tenancy at this time for the following reason(s) marked with an (X) below:

( ) Your household size cannot be accommodated at Your Apartments.

( ) We have received a consumer credit report from ABC CREDIT BUREAU, a usually reliable credit

reporting agency, which contained negative information. You may contact the credit reporting agency

directly within 30 days to obtain the information supplied with us.

( ) Based upon our underwriting policies, the income of your household is insufficient after allowing for

long-term obligations, to pay the rent and utilities for the apartment you applied for.

( ) We were unable to verify employment or a stable source of income.

( ) Your check for the credit report fee was returned to us by your bank marked “Insufficient Funds” or

_________________________________________________________________________________________________

( ) The information given us in your application is different from what we have gathered from reliable

sources.

( ) The housekeeping report on your current apartment indicated a condition of unsanitary or hazard-

ous housekeeping.

( ) We have been unable to verify a previous credit file.

( ) We obtained negative information from a previous landlord.

( ) A person who will be living with you, has a reputation for criminal conviction or criminal acts which

we feel would adversely affect the reputation of the building or the health, safety, or welfare of other

residents.

( )_______________________________________________________________________________________________

Sincerely,

Manager/Owner

EXHIBIT “B”

Residential Property Management Procedures Manual

UNDERWRITING WORKSHEET

Applicant: ____________________________________ Unit Address ________________________________________

Rent (1) $ ___________________ Utilities (2) $ ___________________ Parking (3) $_____________________

Monthly Housing Cost (TMH) (1+2+3) = $_______________________________ (4)

Income: Source of Income:

Principal Wage Earner $ _____________(5) _________________________________________

Spouse $ _____________(6) _________________________________________

Other Income $ _____________(7) _________________________________________

Other Income $ _____________(8) _________________________________________

Total Monthly Income (TMI) (5+6+7+8) = $ ______________________________(9)

Long-Term Obligations (LTO) (installment payments which will continue for 3 months or more)

Payee Monthly Amount Balance Owed

_______________________________ $ _______________________(10) _______________________

_______________________________ $ _______________________(11) _______________________

_______________________________ $ _______________________(12) _______________________

_______________________________ $ _______________________(13) _______________________

_______________________________ $ _______________________(14) _______________________

Total Long-Term Obligations (LTO) (10+11+12+13+14) = $ ____________________________ (15)

Ratios:

(a) TMH (4) / TMI (9) = ________% Housing expense to income ratio 25% - 35% is the desirable range

(b) TMH(4) + LTO(15) / TMI(9) = _____% 40% - 45% is a desirable range

EXHIBIT “C”

VERIFICATION OF EMPLOYMENT

Name of Employer ____________________________________________________________________________________

Address ___________________________________________________________________________________________

RE: _____________________________________________________ SSN: ____________________________________

Applicant/Tenant Name

__________________________________________________________________________________________________

Applicant/Tenant Address City State Zip Code

The individual named above has made application for housing. In order for the individual to become

eligible we must verify employment and income. The individual has authorized below your release of the

requested information. The information you provide will be used only for the purpose of determining the

individuals eligibility for housing. We are required to complete our verification process in a short time

period and would appreciate your prompt attention and response. A self-addressed envelope has been

included for your convenience. If you have any questions please feel free to contact our office.

_______________________________________________________ ____________________________________________

Name Telephone Number

Employee Authorization

I, __________________________________________ , hereby authorize _______________________________________

Applicant Employer

to release the information requested below regarding my employment and compensation.

______________________________________________________________________ ___________________________

Signature Date

TO BE COMPLETED BY EMPLOYER

Date of Employment ____________________________ Position/Occupation ___________________________________

Date of Termination (if applicable) ____________________________

Current Rate of Regular Pay $___________________________ per ______________________ (hour, week, month, etc.)

Current Rate of Overtime Pay $_________________________ per ______________________ (hour, week, month, etc.)

Number of hours/week employee normally works _________________________________________________________

Anticipated average earning of overtime per week $_______________________________________________________

Residential Property Management Procedures Manual

Gross annual earnings you anticipate for this employee for the next twelve months.$______________________________

Gross amount including all tips, bonuses, overtime, commissions, etc.) $_________________________________________

Do you anticipate any changes in the employee’s rate in the near future? Yes _________________ No _______________

If Yes: New Rate $____________________ Effective Date _____________________

If the employee’s work is seasonal or sporadic, indicate lay-off periods. ___________________________________________

Additional Comments: _______________________________________________________________________________________

_____________________________________________________________________________________________________________

Employer Certification

I certify that the above information is true and correct:

_________________________________________________________________ ___________________________________

Name Title

_________________________________________________________________ ___________________________________

Address Telephone Number

_________________________________________________________________ ___________________________________

Signature Date

Warning: Section 1001 of Title 18 of the U.S. Code makes it a criminal offense to make willful false statements or

misrepresentations to any Department or Agency of the United States as to any matter within its jurisdiction.

PLEASE RETURN THIS FORM TO:

______________________________________________________________________________________________________________

Current or Previous Landlord Verification

TO: ______________________________________________________________ DATE: ____________________________

current or previous landlord

_____________________________________________________________________________________________________________

street address

_____________________________________________________________________________________________________________

city, state, zip

Applicant’s Authorization

To Whom it May Concern:

I herein authorize you to provide information regarding my length of residency, rental payment history and

any lease agreement infractions to the landlord named below.

I would appreciate your immediate attention to this request so that my application can be processed in a

timely manner.

Sincerely,

__________________________________________________________________ _______________________________

applicant[‘]s signature date

Dear Landlord:

The above named individual has made application for residency. As part of our routine background check we ask for

the cooperation of current and previous landlords to provide information UPON [[from]] which we will base, in part,

our decision on the on the suitability of the applicant for housing.

Any information that you provide will remain confidential.

Sincerely,

______________________________________________________________________________________________________________

Owner/Manager

How much is (was) the tenant’s rent? __________________________________________________________________________

Does (did) the tenant pay their rent on time? Yes ____________ No ____________

If no, how often is (was) the rent late? _______________________________________

Did you ever have to file a suit to collect rent? Yes ____________ No ____________

Residential Property Management Procedures Manual

Does (did) anyone else live in the apartment? Yes _________ No _________ If yes, how many people? ______________

What where their names? _____________________________________________________________________________________

How long has (was) the tenant at this address? Move-In _______________________ Move-Out ______________________

How did the tenant keep house? Good ____________________ Fair ___________________ Poor ____________________

Does (did) the tenant play loud music or throw loud parties? Yes ____________________ No _____________________

Does (did) the tenants children cause damage or disturbances? Yes ____________________ No _____________________

Are there any other problems, complaints, comments or issues you think we should be aware of?

_____________________________________________________________________________________________________________

_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Based on your experience with this tenant would you rent to them again? Yes _______________ No _______________

If no please comment as to why. ______________________________________________________________________________

Please mail or fax the completed form to: _________________________________________________________________

_________________________________________________________________

any property managers

believe that they both

thoroughly understand

the fair housing law and comply with

it. Yet they are not aware that there

are actually several fair housing laws.

These laws go well beyond prohibit-

ing the obvious racial discrimination

that most people associate with fair

housing. For instance, if your

property is within the City of Chi-

cago, you could be dealing with

thirteen protected classes of individu-

als. Can you name all thirteen of

those protected classes? If not, you

are in serious risk of violating the fair

housing laws. It is essential to learn

the laws and to comply with them

fully.

Fair housing complaints are most

prevalent in rental housing. In

Chicago, for example, the law

includes prohibitions against dis-

crimination on the basis of the source

of income. While the law does not

mandate that you accept prospective

Fair Housing

renters who have a certificate or

voucher from the federal section 8

housing assistance program, it does

not allow you to reject them solely

on the basis of their source of rental

payment.

Fair housing laws do not allow you to

bar families with children from your

property by setting unrealistic

occupancy limits. For instance, a

two-bedroom apartment is generally

felt to be adequate in size to house

four individuals (two persons per

bedroom). The key word is “indi-

viduals,” and their ages, sex, and

legal relationship to one another are

not relevant to their being housed.

Start by defining the appropriate

maximum number of individuals

permitted in each unit. While it is

generally adequate to set a limit of

two persons per bedroom, you should

review the square footage and

configuration of your apartments to

determine if that level is fair and is

not designed to avoid renting to

families with children. We suggest

that you review the “Keating Memo”

that is included in this section to gain

a fuller understanding of how

“number of occupants” relates to

both the number of bedrooms and

size of the unit.

The following are the laws and

ordinances that may apply to the

property you manage. Read them

carefully. Then incorporate those laws

that apply to your property into your

overall management and marketing

plan.

Use the information contained in

these ordinances to make sure that

you understand your local Fair

Housing laws. Then, develop a

tenant selection plan that is in

compliance with those laws. Finally,

follow that plan with every applicant

to ensure compliance and to protect

yourself from potentially costly

violations.

Residential Property Management Procedures Manual

Protected Classes

Protected 1866 1968 Equal Credit Illinois Chicago Cook County

Classes Civil Rights Fair Housing Opportunity Human Rights Fair Housing Human Rights

Act Act Act Act Ordinance Ordinance

Race x x x x x x

Color x x x x x

Religion x x x x x

Sex x x x x x

National

Origin/Ancestry x x x x x

Familial/

Parental Status x x x x

Disability/

Handicap x x x x

Age x x x x

Military Discharge x x x

Marital Status x x x x

Sexual Orientation xx

Source of Income xx

Housing Status x

FAIR HOUSING ENFORCEMENT POLICY:

OCCUPANCY CASES (“KEATING MEMO”)

(Editor’s note: The following memo was issued on March 20, 1991, by HUD General Counsel Frank Keating. It provides

guidance to HUD enforcement personnel for determining whether neutral occupancy limits are reasonable under the

Fair Housing Act.

MEMORANDUM FOR: All Regional Counsel

FROM: Frank Keating, General Counsel

SUBJECT: Fair Housing Enforcement Policy: Occupancy Cases

On February 21, 1991, I issued a memorandum designed to facilitate your review of cases involving occupancy policies under the Fair

Housing Act. The memorandum was based on my review of a significant number of such cases and was intended to constitute

internal guidance to be used by Regional Counsel in reviewing cases involving occupancy restrictions. It was not intended to create a

definitive test for whether a landlord or manager would be liable in a particular case, nor was it intended to establish occupancy

policies or requirements for any particular type of housing.

However, in discussions within the Department, and with the Department of Justice and the public, it is clear that the February 21

memorandum has resulted in a significant misunderstanding of the Department’s position on the question of occupancy policies

which would be reasonable under the Fair Housing Act. In this respect, many people mistakenly viewed the February 21 memoran-

dum as indicating that the Department was establishing an occupancy policy which it would consider reasonable in any fair housing

case, rather than providing guidance to Regional Counsel on the evaluation of evidence in familial status cases which involve the use

of an occupancy policy adopted by a housing provider.

As you know, assuring Fair Housing for all is one of Secretary Kemp’s top priorities. Prompt and vigorous enforcement of all provi-

sions of the Fair Housing Act, including the protections in the Act for families with children, is a critical responsibility of mine and

every person in the office of General Counsel. I expect Headquarters and Regional Office staff to continue their vigilant efforts to

proceed to formal enforcement in all cases where occupancy restrictions are used to exclude families with children or to unreasonably

limit the ability of families with children to obtain housing.

In order to assure that the Department’s position in the area of occupancy policies is fully understood, I believe that it is imperative to

articulate more fully the Department’s position on reasonable occupancy policies and to describe the approach that the Department

takes in its review of occupancy cases.

For example, there is a HUD Handbook provision regarding the size of the unit needed for public housing tenants. See Handbook

7465.1 REV-2, Public Housing Occupancy Handbook: Admission, revised section 5-1 (issued February 12, 1991). While that Handbook,

provision states that HUD does not specify the number of persons who may live in public housing units of various sizes, it provides

guidance about the factors public housing agencies may consider is establishing reasonable occupancy policies. Neither this memoran-

dum not the memorandum of February 21, 1991 overrides the guidance that Handbook provides about program requirements.

3 FAIR HOUSING

Residential Property Management Procedures Manual

Specifically, the Department believes that an occupancy policy of two persons in a bedroom, as a general rule, is reasonable under

the Fair Housing Act. The Department of Justice has advised us that this is the general policy it has incorporated in consent decrees

and proposed orders, and such general policy is consistent with the guidance provided to housing providers in the HUD handbook

referenced above. However, the reasonableness of any occupancy policy is rebuttable, and neither the February 21 memorandum not

this memorandum implies that the Department will determine compliance with the Fair Housing Act based solely on the number of

people permitted in each bedroom. Indeed, as we stated in the final rule implementing the Fair Housing Amendments Act of 1988,

the Department’s position is as follows:

There is nothing in the legislative history which indicates any intent on the part of Congress to provide for the development of

a national occupancy code.

On the other hand, there is no basis to conclude that Congress intended that an owner or manager of dwellings could reside in

a dwelling. Thus, the Department believes that in appropriate circumstances, owners and managers may develop and imple-

ment reasonable occupancy requirements based on factors such as the number and size of sleeping areas or bedrooms and the

overall size of the dwelling unit. In this regard, it must be noted that, in connection with a complaint alleging discrimination

on the basis of familial status, the Department will carefully examine any such nongovernmental restriction to determine

whether it operates unreasonably to limit or exclude families with children.

24 C.F.R. Chapter I, Subchapter A. Appendix I at 566-67 (1990)

Thus, in reviewing occupancy cases, HUD will consider the size and number of bedrooms and other special circumstances. The

following principles and hypothetical examples should assist you in determining whether the size of the bedrooms of special

circumstances would make an occupancy policy reasonable.

Size of bedrooms and unit

Consider two theoretical situations in which a housing provider refused to permit a family of five to rent a two-bedroom

dwelling based on a two people per bedroom policy. In the first, the complainants are a family of five who applied to rent an

apartment with two large bedrooms and spacious living areas. In the second, the complainants are a family of five who

applied to rent a mobile home space on which they planned to live in a small two-bedroom mobile home. Depending on the

other facts, issuance of a charge might be warranted in the first situation, but not in the second.

The size of the bedrooms also can be a factor suggesting that a determination of no reasonable cause is appropriate. For

example, if a mobile home is advertised as a “two-bedroom” home, but one bedroom is extremely small, depending on all

facts, it could be reasonable for the park manager to limit occupancy of the home to two people.

Age of Children

The following hypotheticals involving two housing providers who refused to permit three people to share a bedroom illustrates

this principle. In the first, the complainants are two adult parents who applied to rent a one-bedroom apartment with their

infant child, and both the bedroom and apartment were large. In the second, the complainants are a family of two adult

parents and one teenager who applied to rent a one-bedroom apartment. Depending on the other facts, issuance of a charge

might be warranted in the first hypothetical, but not the second.

Configuration of unit

The following imaginary situations illustrate special circumstances involving unit configuration. Two condominium associa-

tions each reject a purchase by a family of two adults and three children based on a rule limiting sales to buyers who satisfy a

“two people per bedroom” occupancy policy. The first association manages a building in which a family of five sought to

purchase a unit consisting of two bedrooms plus a den or study. The second manages a building in which the family of five

sought to purchase a two-bedroom unit which did not have a study or den. Depending on the other facts, issuance of a charge

might be warranted in the first situation, but not the second.

Other physical limitations of housing

In addition to physical considerations such as size of each bedroom and the overall size and configuration of the dwelling, the

Department will consider limiting factors identified by housing providers, such as the capacity of the septic, sewer, or other

building systems.

State and local law

If a dwelling is governed by State or local governmental occupancy requirements, and the housing provider’s occupancy policies

reflect those requirements, HUD would consider the governmental requirements as a special circumstance tending to indicate

that the housing provider’s occupancy policies are reasonable.

Other relevant factors

Other relevant factors supporting a reasonable cause recommendation based on the conclusion that the occupancy policies are

pretextural would include evidence that the housing provider has: (1) made discriminatory statements; (2) adopted discrimina-

tory rules governing the use of common facilities; (3) taken other steps to discourage families with children from living in its

housing; or (4) enforced its occupancy policies only against families with children. For example, the fact that a development

was previously marked as an “adults only” development would mitigate in favor of issuing a charge. This policy is an

especially strong factor if there is other evidence suggesting that the occupancy policies are a pretext for excluding families with

children.

An occupancy policy which limits the number of children per unit is less likely to be reasonable than one which limits the

number of people per unit.

Special circumstances also may be found where the housing provider limits the total number of dwellings he or she is willing to

rent to families with children. For example, assume a landlord owns a building of two-bedroom units, in which a policy of

four people per unit is reasonable. If the landlord adopts a four person per unit policy, but refuses to rent to a family of two

adults and two children because twenty of the thirty units already are occupied by families with children, a reasonable cause

recommendation would be warranted.

If your review of the evidence indicates that these or other special circumstances are present, making application of a “two

people per bedroom” policy unreasonably restrictive, you should prepare a reasonable cause determination. The Executive

Summary should explain the special circumstances which support your recommendation.

Questions regarding occupancy cases should be directed to Dorothy Brown, Associate General Counsel (FTS 458-1240), or

Harry Carey, Assistant General Counsel for Fair Housing (FTS 458-0570)

3 FAIR HOUSING

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SUMMARY FAIR HOUSING LAWS

A. Federal Civil Rights Laws

1. Fair Housing Act. Housing discrimination based upon race, color, religion, sex, national origin, familial status or

handicap is illegal under provisions of Title VIII of the Civil Rights Act of 1968, as amended in 1974, and 1988.

This law specifically prohibits the following acts:

a. To refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of,

or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, national

origin, familial status (children under the age of 18) or handicap.

b. To discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the

provision of services or facilities in connection therewith, because of race, color, religion, sex, national origin,

familial status, or handicap.

c. To make, print, or publish, or cause to be made, printed, or published any notice, statement or advertisement,

with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based

on race, color, religion, sex, handicap, familial status, or national origin, or an intention to make any such

preference, limitation, or discrimination.

d. To represent to any person because of race, color, religion, sex, handicap, familial status, or national origin that

any dwelling is not available for inspection, sale, or rental when such dwelling is in fact so available.

e. For profit, to induce or attempt to induce any person to sell or rent any dwelling by representations regarding the

entry or prospective entry into the neighborhood of a person or persons of a particular race, color, religion, sex,

national origin, handicap, or familial status.

f. To refuse to permit, at the expense of a handicapped person, reasonable modifications of existing premises

occupied or to be occupied by such person, if such modifications are necessary to afford such person full enjoy-

ment of the premises, and to refuse to make reasonable accommodations in rules, policies, practices or services,

when such accommodations may be necessary to afford such person equal opportunity to use and enjoy a

dwelling.

2. Civil Rights Act of 1866 bans racial and ethnic discrimination in all housing transactions, private as well as state

involved. (Jones v. Mayer, 1968)

3. Equal Credit Opportunity Act outlaws discrimination in the issuance of credit based upon race, religion, national

origin, sex, age, marital status or the fact that an applicant receives public assistance income.

B. Illinois Laws

1. The Illinois Human Rights Act effective July 1, 1980, and amended in 1989 implements the provisions of Section

17, 18 and 19 of Article 1 of the Illinois Constitution which prohibits discrimination in the sale or rental of residen-

tial property. Its housing discrimination provisions are essentially the same as those of the federal Fair Housing Act,

except that it also prohibits discrimination based on ancestry, age, marital status and unfavorable discharge from

military service.

2. Illinois Revised Statues, Chapter 38, Section 12-7.1 makes crimes such as assault, theft criminal trespass to

residence or criminal damage to property by reason of the race, color, creed, religion, ancestry, sexual orientation,

physical or mental disability, or national origin of another individual or group a Class A misdemeanor and is called

a Hate Crime.

C. Local Fair Housing Statutes

Many cities and villages in the state of Illinois have fair housing ordinances enforced at the local level. Check with

the local mayor’s office, village clerk or human relations (rights) commission or department for a copy and for more

information.

D. Real Estate License Act of 1989

Illinois Revised Statutes, Chapter III. par. 5818 (h) 22 and 23

The Department of Professional Regulation may refuse to issue or renew a license, may place, on probation, may

suspend or may revoke any license, or may reprimand or impose a civil penalty not to exceed $10, 000.00 upon any

licensee:

Where the licensee in performing or attempting to perform or pretending to perform any act as a broker or salesperson,

or where such licensee, in handling his own property, whether held by deed, option or otherwise, is found guilty of:

Influencing or attempting to influence, by any words or acts a prospective seller, purchaser, occupant, landlord or

tenant of real estate, so as to promote, or tend to promote, the continuance or maintenance or racially and religiously

segregated housing, or so as to retard, obstruct or discourage racially integrated housing on or in any street, block,

neighborhood or community.

Engaging in any act that violates the fair housing provisions of the Illinois Human Rights Act whether or not a com-

plaint has been filed with or adjudicated by the Human Rights Commission.

3 FAIR HOUSING

Residential Property Management Procedures Manual

COOK COUNTY HUMAN RIGHTS ORDINANCE

In order to assure that all people who live and work in the County of Cook shall be protected from unequal treatment

because of bigotry and bias, the Cook County Human Rights Ordinance prohibits unlawful discrimination and sexual

harassment in employment, housing, credit transactions, public accommodations, access to County services, facilities and

programs and County contracting. The Ordinance defines “unlawful discrimination” as discrimination or harassment

based on a person’s race, color, sex, age, religion, disability, national origin, ancestry, sexual orientation, marital status, parental

status, military discharge status, source of income, or housing status.

HOUSING

PROHIBITIONS

Article VI of the Ordinance prohibits unlawful discrimination in connection with the terms or conditions of the sale,

occupancy or lease of residential real estate in Cook County. This prohibition includes discrimination in the provision of

services or utilities in connection with the sale or lease of residential property, the brokering or appraising of residential

property and the making of loans for the purchase, repair or improvement of residential property.

The Ordinance further prohibits:

■ discrimination in the advertising and listing of residential property;

■ blockbusting or the encouragement thereof; and

■ the intentional creation of alarm in any community based on the present or prospective entry of individuals protected

■ by his Ordinance into the neighborhood.

Sexual harassment in connection with any real estate transaction is also prohibited.

LIMITATIONS AND EXCEPTIONS

Housing restricted to a certain age group such as the elderly is permitted under the Ordinance

Religious organizations may limit the sale, occupancy or rental of housing they own to members of the same religion.

Restricting the rental of rooms to one sex is permitted.

Rental of rooms in a private home by an owner is exempt.

Landlords shall not be required to participate in the federal Section 8 housing assistance program or to lease or rent to any

tenant using a Section voucher or certificate to pay a portion of their rent.

ADDITIONAL CIVIL RIGHTS VIOLATIONS

The Ordinance further prohibits:

■ retaliation against anyone who opposes unlawful discrimination or sexual harassment or has filed or participated

in an investigation under the Ordinance.

■ aiding and abetting a person to commit a violation of the Ordinance; and

■ interference with Commission members and staff in the exercise of their powers of performance of their duties.

ENFORCEMENT

The Ordinance creates an eleven member Human Rights Commission with the authority to investigate, adjudicate and

conciliate complaints of violations of the Ordinance. The Commission shall have subpoena power and shall be authorized

to seek temporary or preliminary injunctive relief.

Persons who believe they have been victims of unlawful discrimination may file a written complaint with the Commission

with 180 days of the discriminatory act. The Commission will conduct a neutral fact-finding investigation and, if substan-

tial evidence of a violation is found, will conduct a hearing.

The relief that may be awarded for violations of the Ordinance includes, but is not limited to: cease and desist orders;

actual damages; hiring or reinstatement; leasing of housing; admission to a public accommodation; attorney fees; and

fines of up to $500 a day for each offense.

The Ordinance also creates a limited private right of action for violations of the Ordinance. Subsequent to a finding of

substantial evidence that a violation of the Ordinance has occurred, a complaint or, in housing complaints only, the

respondent may elect to have the complaint heard by a court of law. If granted and a complaint is filed in court, the

Commission will cease to have jurisdiction over the matter.

The Commission’s additional powers and duties include:

■ conducting research, public forums and educational programs on discrimination and improving human relations;

■ issuing rules and regulations;

■ rendering an annual report; and

■ entering into intergovernmental agreements regarding the referral and processing of complaints of discrimination.

APPLICABILITY

The Ordinance shall apply to County government and unincorporated Cook County. With respect to the villages and

municipalities of Cook County, the Ordinance shall apply in the following manner:

1. In accordance with the Constitution, if a municipal ordinance is in conflict with this Ordinance, the municipal

ordinance shall supersede this Ordinance.

2. If a municipal ordinance prohibits that same conduct prohibited by this Ordinance (or in other words is consistent

with or duplicates the prohibitions of this Ordinance) this Ordinance shall not apply within that municipality with

respect to such conduct. To the extent that a municipal ordinance is less comprehensive, this Ordinance shall be

enforceable within the municipality.

COOK COUNTY

HUMAN RIGHTS COMMISSION

69 WEST WASHINGTON ST., STE. 2900

(312) 603-1100

3 FAIR HOUSING

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CHICAGO FAIR HOUSING ORDINANCE

(Effective May 6, 1990)

Chapter 198.7B

“Be it Ordained by the City Council of the City of Chicago:

198.7B-1 It is hereby declared the policy of the City of Chicago to assure full and equal opportunity to all residents of the

City to obtain fair and adequate housing for themselves and their families in the City of Chicago without discrimination

against them because of race, color, sex, age, religion, disability, natural origin, ancestry, sexual orientation, marital status,

parental status, military discharge status or source of income.

198.7B-2 It is further declared to be the policy of the City of Chicago that have no owner, lessee, sublessee, assignee,

managing agent, or other person, firm or corporation having the right to sell, rent or lease any housing accommodation,

within the City of Chicago, or any agent of these, should refuse to sell, rent, lease, or otherwise deny to or withhold from

any person or group of persons such housing accommodations because of race, color, sex, age, religion, disability, national

origin, ancestry, sexual orientation, marital status, parental status, military discharge status or source of income in the

terms, conditions, or privileges or the sale, rental or lease of any housing accommodations or in the furnishing of facilities

or services or services in connection therewith.

198.7B-3 It shall be an unfair housing practice and unlawful for any owner, lessee, sublessee, managing agent, or other

person firm or corporation having the right to sell, rent, lease or sublease any housing accommodation, within the City of

Chicago or any agent of any of these, or any real estate broker licensed as such.

A. To make any distinction, discrimination or restriction against any person in the price, terms, conditions or privi-

leges of any kind relating to the sale, rental, lease or occupancy of any real estate used for residential purposes in the

City of Chicago or in the furnishing of any facilities or services in connection therewith, predicated upon the race,

color, sex, age, religion, disability, national origin, ancestry, sexual orientation, marital status, parental status,

military discharge status or source of income of any prospective buyer, lessee or renter of such property.

B. To refuse to sell, lease or rent, any real estate for residential purposes within the City of Chicago because of race,

color, sex, age, religion, disability, national origin, ancestry, sexual orientation, marital status, parental status,

military discharge status or source of income of the proposed buyer or renter.

C. To discriminate or to participate in discrimination in connection with borrowing or lending money, guaranteeing

loans, accepting mortgages or otherwise obtaining or making available funds for the purchase, acquisition, construc-

tion, rehabilitation, repair or maintenance of any residential housing unit or housing accommodation in the City of

Chicago because of race, color, sex, age, religion, disability, national origin, ancestry, sexual orientation, marital

status, parental status, military discharge status or source of income.

D. To solicit for sale, lease or listing for sale or lease, residential real estate within the City of Chicago on the ground of

loss of value due to the present or prospective entry into any neighborhood of any person or persons of any particu-

lar race, color, sex, age, religion, disability, national origin, ancestry, sexual orientation, marital status, parental

status, military discharge status or source of income.

E. To distribute or cause to be distributed, written material or statements designed to induce any owner of residential

real estate in the City of Chicago to sell or lease his property because of any present prospective changes in the race,

color, sex, age, religion, disability, national origin, ancestry, sexual orientation, marital status, parental status,

military discharge status or source of income of persons in the neighborhood.

F. To deliberately and knowingly refuse examination of any listing of residential real estate within the City of Chicago

to any person because of race, color, sex, age, religion, disability, national origin, ancestry, sexual orientation,

marital status, parental status, military discharge status or source of income.

198.7B-4 Whenever used in this Chapter:

(a) “Age” means chronological age of not less than 40 years.

(b) “Disability” means (i) a determinable physical mental characteristic which may result from disease, injury, congeni-

tal condition of birth or functional disorder including; but not limited to, a determinable physical characteristic

which necessitates a person’s use of a guide, hearing or support dog; or (ii) the history of such a characteristic; or

(iii) the perception of such a characteristic by the person complained against.

(d) “Military discharge status” means the status of living with one or more dependent minor or disabled children.

(e) “Parental status” means the status of living with one or more dependent minor or disabled children.

(f) “Religion” means all aspects of religious observance and practice, as well as belief, except that with respect to

employers, ”religion” has the meaning ascribed to it in Section 199.5.

(g) “Sexual orientation” means the actual or perceived state of heterosexuality, homosexuality or bisexuality.

(h) “Source of income” means the lawful manner by which an individual supports himself or herself and his or her

dependents.

198.7B-4.1 No provision of this Chapter shall be construed to prohibit any of the following:

(a) Restricting rental or sale of a housing accommodation to a person of a certain age group (1) when such housing

accommodation is authorized, approved, financed or subsidized in whole or in part for the benefit of that age

group by a unit of state, local or federal government; or (2) when the duly recorded initial declaration of a condo-

minium or community association limits such housing person owning or renting a unit in such housing accommo-

dation prior to the recording of the initial declaration shall not be deemed to be in violation of the age restriction

as long as the person or the person’s immediate family continue to own or reside in the housing accommodation.

(b) A religious organization, association or society, or any not-for-profit institution or organization operated, super-

vised or controlled by or in conjunction with a religious organization, association or society, from limiting the sale,

rental or occupancy of a dwelling which it owns or operates for other than a commercial purpose to persons of the

same religion, or from giving preference to such persons of the same religion, or from giving preference to such

persons, unless membership in such religion is restricted on account of race, color, or national origin.

198.7B-5 Any owner, lessee, sublessee, assignee, managing agent, or other person, firm or corporation having the right to

sell, rent, or lease any housing accommodation within the City of Chicago who shall exercise any function of selling,

renting, leasing or subleasing any housing accommodation within the City of Chicago shall be deemed subject to all

applicable provisions hereof. Any real estate broker who shall exercise any function of a real estate broker within the City

of Chicago shall be subject to all applicable provisions hereof.

198.78-6 Any person aggrieved in any manner by any violation of this Chapter may file a written complaint with the

Commission on Human Relations. The complaint shall include the name and address of the complainant and of every

person against whom the complaint is made and shall set out the facts giving rise to the complaint. No one person shall

refuse or fail or comply with any subpoena, order or decision issued in the course of or as a result of an investigation of a

complaint.

198.7B-11 If any provision of this ordinance or the application thereof to any person or circumstances is held unconsti-

tutional or otherwise invalid by any court, such invalidity shall not affect the remaining provisions or applications of this

ordinance to any person or circumstance.

3 FAIR HOUSING

Residential Property Management Procedures Manual

198.7B-12 Any owner, lessee, sublessee, assignee, managing agent or other person, firm, corporation, or real estate broker

who shall violate or fail to comply with any of the provisions of this ordinance shall be punished by a fine in any sum not

exceeding five hundred dollars ($500.00). Nothing herein contained shall be construed so as to preclude any aggrieved

person from pursuing such other and further legal and equitable relief to which he may be entitled.

198.7B-13 The Corporation Counsel shall file with the Department of Professional Regulation of the State of Illinois a

notice of the conviction of any licensed real estate broker or salesperson found guilty of violating this Chapter.

This ordinance shall be in force and shall take effect 30 days after its passage and publication”

THE EQUAL CREDIT OPPORTUNITY ACT

If you still think only of credit cards when you hear the word “credit” think again. Credit is used by millions of consum-

ers for a variety of purposes: to finance educations, remodel homes, obtain small business loans, and pay for home

mortgages.

A law passed by Congress ensures that all consumers will be given a chance to receive credit. The Equal Credit Opportu-

nity Act says it is illegal for creditors to discriminate against applicants on the basis of their sex, race, marital status,

national origin, religion, age, or because they get public assistance income. This doesn’t mean all consumers who apply

for credit will get it. Creditors can still use factors such as income, expenses, debts, and credit history to judge applicants.

The law protects consumers when dealing with any creditor who regularly extends credit, including: banks, small loan

and finance companies, retail and department stores, credit card companies, and credit unions. Anyone participating in

the decision to grant credit, such as a real estate broker who arranges financing, is covered by the law. Businesses applying for

credit are protected by the law, too. Consumers have equal rights in every phase of the credit application process. Here is

a checklist of important rights to remember when credit is requested.

Creditors may not.......

■ Discourage an applicant because of sex, marital status, age, religion, race, national origin, or because an applicant

receives public assistance income.

■ Ask an applicant to reveal sex, race, national origin, or religion. Creditor may ask an applicant to voluntarily disclose

this information if they are applying for a real estate loan. This information helps federal agencies enforce anti-discrimi-

nation laws. A creditor may ask an applicant what his residence or immigration status is.

■ Ask whether an applicant is divorced or widowed.

■ Ask marital status if applicant is applying for separate, unsecured account. (Exceptions are Arizona, California,

Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington—the “community property” states).

■ Ask for information about husband or wife. A creditor may ask about spouse if : both spouses are applying; both

spouses will be using the account; applicant is relying on spouse’s income or on alimony or child support income

from a former spouse; or if applicant resides in a community property state (listed above).

■ Ask about applicants plan for having or raising children.

■ Ask if applicant receives alimony, child support, or separate maintenance payment. A creditor may ask for this

information if applicant is first told that they don’t have to reveal it if applicant is not relying on it to get credit.

A creditor may ask if applicant has to pay alimony, child support, or separate maintenance.

3 FAIR HOUSING

Residential Property Management Procedures Manual

When Deciding Whether To Give Credit, Creditors May Not......

■ Consider sex, marital status, race, national origin, or religion.

■ Consider whether a telephone is listed in applicants name. A creditor may consider whether there is a phone in the

home.

■ Consider the race of the people who live in the neighborhood where applicant wants to buy or improve a house

with borrowed money.

■ Consider applicants age, with certain exceptions:

• Minors

• Those 62 or over can be favored.

• If it is used to determine the meaning of other factors which are important to

credit-worthiness. (For example, a creditor could use applicants age to see if income

might be reduced because of pending retirement).

When evaluating an applicants’ income creditors may not:

■ Refuse to consider reliable public assistance income in the same manner as other income.

■ Discount income because of sex or marital status. (For example, a creditor cannot count a man’s salary at

100% and a woman’s at 75%). A creditor may not assume a woman of child-bearing age will stop work to

have to raise children.

■ Discount or refuse to consider income because it is derived from part-time employment or from pension

■ Refuse to consider consistently-received alimony, child support, or separate maintenance payment A creditor may

ask for proof that this income has been received consistently.

For more information on the Equal Credit Opportunity Act contact:

Federal Trade Commission

55 East Monroe Street Chicago, Illinois 60603

(312) 353-4423

There are a number of agencies and advocacy groups who are committed to insuring that Fair Housing Laws are complied with by

all. Upon receiving a complaint these groups may send an investigator or in some cases send “TESTERS” to determine the validity

of the complaint. If you are found to be in violation you can be fined or subject to civil penalties, including court costs and legal

fees. Settlements exceeding $100,000 are not uncommon.

We once again strongly urge you to read the Fair Housing information contained herein and practice Fair Housing as a normal

routine at every property with which you are involved.

“TESTERS” IN FAIR HOUSING

“Aren’t the actions and activities of real estate “tester”, “checkers” or “auditors” entrapment and hence against the law?”

This question comes up again and again in real estate fair housing training. The answer is that the federal courts have

ruled repeatedly that “testers” 1) are not violating any law, 2) are often times obtaining evidence that can only be

obtained by that process and 3) have standing in their own right to bring a civil action if they are denied truthful

information about housing availability.

(1) The U.S. Court of Appeals (Seventh Circuit) in a ruling on July 21, 1983, which involved a case brought by the

Leadership Council, stated:

“It is frequently difficult to develop proof in discrimination cases and the evidence provided by testers is frequently

valuable, if not indispensable. It is surely regrettable that testers must mislead commercial landlords and home

owners as to their real intentions to rent or to buy housing. Nonetheless, we have long recognized that this

requirement of deception was a relatively small price to pay to defeat racial discrimination. The evidence provided

by testers both benefits unbiased landlords by quickly dispelling false claims of discrimination. We have discovered

no case in which the credibility of testimony provided by a tester has been questioned simply because of the

tester’s “professional” status. Indeed, tester evidence may well receive more weight because of its source. Testers

seem more likely to be careful and dispassionate observers of the events which lead to a discrimination suit than

individuals who are allegedly being discriminated against”.

(2) The United States Supreme Court in the now famous “Heavens Case” ruled on February 24, 1982:

“Congress has thus conferred on all “person” a legal right to truthful information about available housing........

A tester who has been the object of a misrepresentation made unlawful under Sec. 804(d) has suffered injury in

precisely the form the statute was intended to guard against, and therefore has standing to maintain a claim for

damages under the Act’s provisions. That the tester may have approached the real estate agent fully expecting that

he would receive false information, and without any intention of buying or renting a home, does not negate the

simple fact of injury within the meaning of Sec. 804(d).”

Richardson v. Howard, 712 F .2nd 319 (7th Circuit 1983)

Havens Realty Corp. v. Coleman, 102 S. Ct. 1114 (1982)

3 FAIR HOUSING

Residential Property Management Procedures Manual

nce your Tenant Selection

Plan is in place, you’re

ready to find the right

tenants for that vacant two-bedroom

apartment on the second floor. Well,

not exactly. There’s a bit more

involved including several factors

that relate to tenant selection as well

as marketing.

Let’s start with the basics — the forms

and paperwork that you’ll need to do

the actual renting of an apartment.

Rental Application

Obtain a supply of the rental applica-

tions you want to use. These vary in

form and information requested.

They are available from stationary

stores and through office supply

super stores such as Office Depot®

or Staples®. We have also included

one that you are free to copy and use.

Once you’ve selected a Rental

Application, you’ll need to be sure

you use it properly.

Marketing

It is essential to have the prospective

tenant(s) fully complete and sign the

rental application. The applicant’s

signature authorizes you to conduct a

credit investigation. NEVER RUN A

CREDIT REPORT WITHOUT A

SIGNED APPLICATION. Verifying the

applicant’s identify by requesting and

photocopying a photo ID is another

important step in the process. You

will need answers to all the questions

posed in the application in order to

judge whether the applicant meets

the guidelines established in your

Tenant Selection Plan. You will also

need to know the applicant is who he

or she claims to be.

Credit Reports

Select a firm that can provide a credit

report on the applicant as well as any

additional information you may

want. Some firms will be able to

supply current information about

pending eviction actions as well as

checks on whether the applicant is a

fugitive from justice. Choose a firm

that can provide information within

one business day. This is easily

accomplished by most reputable

companies.

Lease Agreements

You will need to decide upon and

obtain a supply of Lease Agreements

(conforming to local ordinances

where required). With only very rare

exceptions, avoid entering into a

verbal agreement in place of signing a

written lease. The key problem with

a verbal agreement is the frequency

with which on party suffers selective

hearing or inaccurate memory.

These problems are eliminated by a

Lease Agreement that clearly spells

out the requirements and responsi-

bilities of all parties to the lease. It

will provide for a lease term, usually

one-year, that makes clear to every-

one when the lease will expire.

Completion of the Lease Agreement

ensures you have a valid lease for a

given period of time.

Verbal agreements typically are

renewed month to month. With a

thirty-day notice, either party can

break verbal agreements. For land-

lords, it is daunting, at best, to hear

on November 1 that a tenant will

move at the end of the month. This

means that the apartment will

become vacant on December 1st,

traditionally one of the slowest

months for rental activity. January

and February are also typically slow

months. A written term lease can

avoid this type of situation. Often

owner or managers will write leases

that are slightly shorter or longer that

12 months to avoid expiration dates

occurring during December, January

or February.

Lease Agreements are available at

many business supply outlets. In

addition many local Realtor® Boards,

as well as attorneys specializing in

evictions, have leases conforming to

local ordinances. Be sure the lease

agreement you select meets your

needs and conforms to local ordi-

nances.

Rental Rates

What will you charge for rent? This

is a crucial issue for every property

owner. Making a good determina-

tion requires careful analysis of the

local market. Failure to do this

analysis can result in having an

overpriced apartment remain vacant

or in earning too little on an apart-

ment priced below its potential.

Determine the correct rent level by

conducting a market survey. Your

survey should review the rents at a

minimum of eight comparable

properties that are within your

immediate market area. If your

building is freshly rehabbed and has a

well-manicured lawn; chose similar

buildings as comparables. Don’t

choose a dilapidated building with a

weed-choked yard or an elegant new

construction as one of the eight

properties in your survey. For the

market survey to be valid, properties

must be within a reasonable distance

as well as somewhat similar to your

property.

A market survey will often begin

with a “windshield survey.” Simply

drive around the neighborhood and

view buildings that appear to be in a

condition similar to yours. You will

want to gather telephone numbers

from the signs attached to the

building so you can contact the

managers with preliminary questions

and to schedule a visit of your own

(taking photos is also a good idea).

You will eventually need to make a

visit to those buildings that most

closely resemble the apartments you

are offering. While much informa-

tion can be gained over the tele-

phone, a call alone will not deter-

mine how your property stacks up

against the competition. You need to

see how nice their apartments are

compared to yours. Do they have

similar amenities? Are they offering a

frost-free refrigerator, self-cleaning

oven, air conditioning, dishwasher,

ceiling fans, modern bathrooms, on-

site laundry facilities, or other

features? Are they on a busy, noisy

boulevard or a quiet tree- lined street?

Are they close to public transporta-

tion? Is their two- bedroom unit

larger or smaller than your two-

bedroom unit? Is heat included, or

does the tenant pay for the heat? All

of these differences will have an

impact on the value of your particular

apartment in its market.

Once you have identified buildings

that are reasonably similar to yours in

quality and appearance, determine if

their rent levels are realistic. If the

building never has a vacancy because

no one ever moves out, chances are

the rents may be too low. On the

other hand, if they can’t seem to rent

the apartment, even though it is

charming and market ready, then

they may have overpriced the unit.

Identify buildings that have apart-

ments that come on the market

occasionally and are rented within 30

days of their offering. The owners of

these buildings have probably

identified what rent levels the local

marketplace will allow.

The rent you should charge should be

based on the strengths and weak-

nesses of your property compared to

those properties similar to your own.

You’ll need to consider both your in-

person observations of the compari-

son of your units with others. In

addition, you’ll need to analyze the

appropriateness of the rents for these

similar apartments. Be certain not to

match someone else’s overinflated or

undervalued rents.

Note: Certain financing programs, as

well as real estate tax relief programs,

will govern the maximum amount of

rent you can charge for your apartments.

If you fall into this category, it is

important that you comply with those

restrictions when setting rent levels.

Residential Property Management Procedures Manual

Curb Appeal

Any ads you run for your rental will

be a waste of money if your building

doesn’t look good from the outside.

If the exterior doesn’t look good,

potential renters may not take the

time to come inside to see the

beautifully refurbished apartment you

have for rent. Keep the exterior and

common areas of your building clean

and litter free. If you have landscap-

ing, keep it neat and trimmed. Grass

seed and flowers require a relatively

small investment that provides a

surprisingly high return in appear-

ance and tenant satisfaction.

Most prospective tenants will shy

away from a building that is other-

wise well maintained if it is covered

in graffiti. If your building ever falls

victim to graffiti, remove it at once.

If the graffiti reappears, remove it

again. Eventually the person apply-

ing the graffiti will give up. In the

City of Chicago, you can contact your

alderman for city assistance in having

graffiti removed.

Market or Rent-Ready

First impressions are often lasting

impressions. If you show a dirty,

unpainted apartment to a prospective

tenant, you may very well never see

that person again. People generally

don’t have the vision to see what the

unit will look like after it has been

fixed up. We’ve all heard about the

landlord who promised the moon but

on moving day delivered something

far less. That prospective tenant may

have heard about or experienced a

similar situation and may be skeptical

of the genuine promises you make.

Avoid the desire to rush to market

with an unfinished unit. Fix it up

first, then show it! If your plans call

for fresh paint, new carpeting and a

shiny new frost-free refrigerator, then

complete those plans. You’ll rent

vacant apartments that are in a

market- ready condition much faster

than those that have not been

readied. As a result, you’ll spend less

time showing the units and experi-

ence less loss of income.

Marketing Program

Any marketing program for residen-

tial buildings includes the following

basic components:

■ Identifying and understanding

your target market.

■ Creating awareness within your

market segment about your

apartments.

■ Motivating or persuading your

potential tenants to apply and

move into your building.

Identifying and under-

standing your market

Your building is likely to appeal to

certain groups of people, and you

need to identify who they are. The

likely renters for a building with only

studio and one-bedroom apartments

are single people or couples with no

children. Your property would probably

not be appropriate for families with

children simply because of the size of the

available units.

If your cheapest apartment rents for

$1,200 per month, it is too expensive

for a household earning $1,650 per

month. The rent is too high for that

income level.

A four-bedroom apartment in

Chicago’s Albany Park neighborhood

would probably not appeal to a single

female who works in Oak Brook. It’s

too big an apartment and geographically

inconvenient.

You need to know both your target

market and the size of your market

— both the number of people and the

geographic boundaries. The size of

the market population can be

determined from census data that

provide information on household

size and income for each census tract.

The geographic size of your market is

a bit more difficult to determine, but

if the building is located within the

boundaries of Chicago, your market

most likely will not include suburban

areas.

Creating awareness /

Advertising

If you have just totally rehabbed your

building, you need to let potential

renters know. Signs, Signs, Signs,

Signs, Signs, and Signs are the six best

sources for rental prospects. Signs

attracted prospects to approximately

60 percent of the apartments rented

in Chicago. Since most of the signs

used to advertise the availability of an

apartment are relatively small (3 feet

by 4 feet), you’ll need to keep the

information you’re trying to convey

to a minimum. An effective sign

might read:

But wait, you have much more to say.

After all you just rehabbed your

building and put in the best of every-

thing, and you want to tell the world,

or at least anyone driving by your

building, about it. You might feel

compelled to put up a sign that reads:

APARTMENT FOR RENT

(773) 555-1111

TWO BEDROOM

APARTMENT

FOR RENT

773-555-1111

Can you read all the information

contained in this advertising message

in one or two seconds? Neither can a

prospective renter who is traveling by

your building in a car or bus traveling

at 30 miles per hours. While they

might get through part of your

message, they probably won’t get to

that all-important telephone number.

Even if you had a busload of speed

readers going by, they would have

difficulty with this lengthy message,

since the printing would have to be

fairly small to fit on a standard 3’ X 4’

sign.

Ads in local newspapers and church

bulletins can be an effective means of

attracting potential tenants. Perhaps,

the most effective method is to

encourage referrals from friends,

other residents of the building, and

employers in the area.

Public Relations

Public relations — getting attention

through channels other than adver-

tising — is an important part of any

marketing program, especially if

you’re spending money on signs and

paid advertisements. There are two

really great things about publicity.

First, it’s usually free, if you do it

yourself and not through a public

relations agency. Second, either a

story in a newspaper or a positive

referral by individuals has higher

credibility than any ad. Most people

tend to believe what they read in the

newspaper or hear from a friend or

respected person in the community,

and it’s great if it’s a positive story

about your building. But how do you

generate a positive story about your

building?

The best method of obtaining media

coverage is by sending out a press

release. In fact, 75 percent of all

news comes from press releases. In

order to insure that your press release

will be utilized, you need to do a few

important things.

■ Use an established format for your

press release.

■ Avoid making the release more

than one or two pages long.

■ Send a photo of your building or

the interior of one of the apart-

ments.

■ Enclose extra materials, such as

brochures, print ads, or flyers.

■ Follow up with a telephone call.

Now Renting

Beautifully Rehabbed Apartments

Hardwood Floors, Natural woodwork, Gas Range and Oven,

Frost Free Refrigerator, Dishwasher, Individually controlled

Heat & A.C. , Ceramic Tile Bath, Low “E” Insulated Glass

Windows, Vertical Blinds, Close to Schools, Churches and

Public Transportation, No Pets allowed

(773) 555-2222

4 MARKETING

Residential Property Management Procedures Manual

What is newsworthy about your

building that would warrant an

article being published?

Look around, and you’re bound to

find something.

■ The beginning or finishing of a

rehab project.

■ A Grand Opening.

■ A progress report on renting a new

or rehabbed building.

■ Awards from community groups or

leaders.

■ An unusual renter moving into the

building.

Find something about your building

and prepare a press release. But,

make sure that should the local editor

drop by, your building is clean and

neat.

Motivating or

persuading

Moving a household is one of life’s

most stressful events. The stress

begins when people decide to move

and continues until well after they

have found and moved into their

new home. You need to remember

this during all interactions with

prospective tenants.

During my twenty-plus years in

property management, I have often

heard a developer talk about his

newly constructed apartment build-

ing as being “so good that it will rent

itself.” There are few examples of this

“field of dreams” syndrome. You may

recall the movie by that name that

starred Kevin Costner. In the movie a

God- like voice is heard saying, “If

you build it, they will come.” I don’t

know one property that rented itself,

and all required some marketing to be

successful.

Showing and demon-

strating the apartment

Showing an apartment for rent

should not be a self-service activity,

where you toss the keys to the

prospective renter and point at the

door on the left at the top of the

stairs. You will need to prepare for the

showing before the prospect arrives.

First, walk through the apartment to

make sure everything is clean and in

good condition. If you have shades

drawn and it’s a bright sunny day,

open those shades and let the

sunlight fill the apartment. If you’ll

be showing the apartment in the

evening, turn on the lights prior to

the prospect arriving. Do whatever

else you can to make the apartment

pleasant and inviting.

Never make a prospect feel like you’re

doing them a favor by showing the

apartment. You need to be courteous,

helpful and enthusiastic. If you’ve

been working around the building

and are covered in dirt, it is always

advisable to clean yourself up prior to

the prospective tenant’s arrival so

that you present a professional

appearance.

Think and act like a salesperson.

Demonstrate the features of the

apartment and the building. If you

have insulated windows, show people

how well they work. Open doors,

point out features, like ceramic tile

walls in the bathroom, on-site

laundry facilities, or tenant storage

lockers. Talk about the positive

features of the building and the

neighborhood, like the proximity of

schools, churches, transportation,

and shopping.

You should be prepared to provide

accurate answers to questions

prospective renters will ask. You need

to know your building and your

neighborhood. Know the square

footage of your apartments, the

utility costs (a requirement in

Chicago for tenant- heated units),

and other pertinent information.

Find out where the churches and

schools are, what public transporta-

tion will serve people, and where the

closest grocery store and pharmacy

are located.

Close the Sale

Many property managers find it

difficult to close the sale. They don’t

get a definitive agreement to rent an

apartment. When the prospect is at

the building, you need to seize the

moment and ask them to fill out an

application and leave a deposit.

Don’t be shy! Create a sense of

urgency. If you only have one

apartment available and you’ve had

other inquiries, let the prospect know.

Let them know that if they take too

long in making a decision the

apartment might not be available.

It’s also a good idea to get a prospect’s

telephone number and address so you

might call them later and ask them to

rent at your building.

Reasons for Failure to

There are several reasons property

managers fail to close the rental … or

even to attempt closing.

1. Fear of Failing: Most people

don’t like to hear “NO.” If you

don’t hear NO, you have not yet

failed. Unfortunately, it also

means you haven’t yet tried.

2. Misunderstanding of the sales

closure: Most people need to be

pushed to make their final

commitment to rent an apart-

ment. Often landlords don’t

close because they don’t think it

is necessary to push for that final

closure. Renting an apartment is

a major buying decision and one

that requires encouragement.

3. Cultural Taboos: Tradition and

the manners we have been

taught tell us that it is not good

to ask someone for something.

You’re not comfortable asking for

the order. Unfortunately, many

other property managers have

overcome this taboo and will ask

your applicants to sign their

applications.

Of course, not every “looker” will

rent on the first visit. This is not a

cause for alarm. Many shoppers

make several appointments to look

at various apartments, including your

competition. If you’ve taken a name

and number, you’ll be able to follow

up with a telephone call or a brief

note thanking them for visiting your

building and inviting them to

sample brochure/flyer

City View Apartments

Beautifully Rehabbed Vintage Apartments

featuring:

Hardwood Floors

Natural woodwork

Gas Range and Oven

Frost Free Refrigerator

Dishwasher

Individually controlled Heat & A.C.

Ceramic Tile Baths

Low “E” Insulated Glass Window

Vertical Blinds

Conveniently located close to Schools, Churches and Public Transportation.

One Bedroom Apartments priced from $__________

Two Bedroom Apartments priced from $__________

City View Apartments

1234 W. Main Street, Chicago, IL 60600

on-site management and maintenance

(773) 555-2222

become a resident. If you have

properly prepared your apartment,

priced it competitively and shown

diligence in your marketing efforts,

you have a good chance of getting

the rental.

Brochures

A simple brochure or flyer can tell a

prospective tenant quite a bit about your

apartments. Unlike a sign, a brochure

can convey lots of in-formation without

being fancy or expensive.

4 MARKETING

Residential Property Management Procedures Manual

WELCOME...

We want to welcome you to your new

home and are pleased that you chose

our building. We want to make your

stay with us as comfortable and

enjoyable as possible. The purpose of

this handbook is to let you know

more about our building, and how,

together, we can keep it an enjoyable

place in which to live. You, as the

resident, and we, as the building’s

managers, have certain responsibili-

ties to each other. By clarifying these

responsibilities at the very beginning,

we can better achieve our objective of

providing quality housing services to

each of our residents. With this

thought in mind, we have prepared

this handbook. THE PROVISIONS IN

THIS HANDBOOK ARE PART OF

YOUR LEASE. RETAIN IT FOR

FUTURE USE WHILE YOU RESIDE IN

OUR APARTMENT BUILDING. Please

take the time now to read through its

pages, and don’t hesitate to tele-

phone or visit the Manager if you

have questions.

Sample Resident

Handbook

Tenant Handbook

ost leases contain rules

and regulations. Often

times these rules and

regulations are not specific to your

particular property. A Tenant

Handbook is a document that you

can use to convey specific rules and

regulations not conveyed within your

written lease agreement. This docu-

ment is also a means of providing

helpful information to the tenants

within your building. The Tenant

Handbook does not need to be fancy

or costly to produce. It should,

however, convey pertinent informa-

tion about the building, the commu-

nity, care of apartment and its

equipment, and the rules and

regulations governing the property.

The sections in bold italics in the

following sample Handbook are

particular areas where you, the

property owner or manager, must

make a decision as to the policy you

wish to adopt.

SECTION 1

ADMINISTRATIVE

INFORMATION

Your Management Company

Your Apartments is managed by

Your Apartment’s Realty, Inc. Your

Apartment’s Realty, Inc., over the

past five years, has been involved in

the rehabilitation and management

of over fifty residential units in four

buildings throughout Chicago. All

of these buildings have been instru-

mental in revitalizing and improving

their respective neighborhoods.

Your Management Team

Your professional management team

is discrete and efficient. The entire

staff is professionally trained and

skilled in their areas of responsibility.

Office Hours

Hours of office operation are 8:30 to

4:30 Monday to Friday and 9:00 to

12:00 Saturdays. These hours have

been established to provide service

coverage during normal work periods.

Please feel free to visit our office or

call regarding service requests or to

obtain assistance. For the following

emergencies during non-office hours,

please call the emergency phone

number (000-0000), and our answer-

ing service will contact the manage-

ment representative assigned to

emergency duty:

■ No heat in the winter

■ A plumbing leak or sewer stoppage

which might damage personal

belongings or apartment property.

■ No electricity (contact ComEd

first)

■ Any condition that might cause a

fire.

■ An odor of gas.(contact Peoples

Gas first)

Our employees want to do the best

job possible in serving you. However,

they also enjoy their time with their

families. Please consider their time

when calling after normal working

hours.

SECTION 2

THINGS YOU SHOULD

KNOW UPON MOVING IN

PAYMENT OF RENT

You may pay your rent by bringing

it to the management office during

business hours or by mailing it to

our office.

PLEASE MAIL YOUR RENT TO:

Your Apartment’s Realty, Inc.

1 East Main Street

Chicago, Illinois 60600

You will receive a billing on approxi-

mately the 25th of the month for the

rent payment[,] which is due on the

first of the following month. In-

cluded in the billing will be an

envelope for mailing your payment

and a billing statement[,] which

should be enclosed with your check or

money order in the return envelope.

Make your check payable to Your

Apartments. Rent is due in the Your

Apartment’s Realty, Inc. office by the

first day of each month. If rent is not

received by the 5th day of the month,

a late charge will be assessed and will

be included in the next billing.

Security Deposit

Your security deposit is not rent but a

deposit to ensure the fulfillment of

lease conditions and to serve as a

contingency payment against any

damages to the apartment. The

security deposit may not be applied to

your last month’s rent. If you fulfill

your lease according to its terms, only

charges for damages, excluding normal

wear and tear, will be deducted from

your security deposit. Following are

the conditions for return of a security

deposit:

■ You must fulfill the terms and

conditions of your lease and not

owe the development any money.

■ The apartment must be left clean

with no damage beyond normal

wear and tear.

■ After you have removed all of your

belongings from the apartment,

both you and a representative from

management will complete an

inspection report. Both you and

the management representative

should sign this report. The man-

agement representative will clearly

indicate on this form the items, if

any, for which you will

be charged.

■ You must give our office a valid

forwarding address.

■ You are not considered officially

vacated until all keys are turned in

to the office.

Inspection Reports

When you move in, your apartment

should be clean and ready for you.

You and a management representa-

tive will inspect it together. You will

receive a checklist of the equipment

in your apartment and its condition.

Anything damaged or in need of

repair will be noted and corrected by

management. From then on, the

apartment is your responsibility. So

make certain you inspect everything

carefully. Be sure to check every-

thing; such as the plumbing, lights,

stove, refrigerator and sink. Check

for any damage to things such as

doors, doorknobs, locks, walls,

ceilings, basins, toilets and tubs. Do

not walk through the apartment just

looking at how nice and new every-

thing looks. Carefully inspect every-

thing. After any problems you may

find are corrected, any damage to

your apartment or its equipment that

is caused by you or members of your

household, guests or visitors will be

charged to you after consideration

has been given for normal wear and

tear. Please remember to contact the

management office for a joint

inspection prior to vacating your

apartment. Management staff will

inspect your apartment in your

presence, if you request it. The

“move-in” inspections prevent

misunderstandings and your being

charged for conditions that may have

existed prior to your arrival. You will

be provided with a written statement

of any charges for which you are

responsible.

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