Ask any insomniac watching late night television at 2 in the morning what the biggest cash cow offered on all those incessant infomercials is, and they will tell you one thing: real estate.

Indeed, property ownership has long been considered the cornerstone of amassing wealth before retirement. However, before you start dreaming of yacht rides and bogie putts, you may want to first ask yourself just how much do you really know about property ownership before dipping your savings into the market.

Seeing the need to offer property owners the tools needed to be better landlords, the Community Investment Corporation in 1998 began holding basic courses in property management and maintenance.

For three hours over four consecutive evenings, prospective landlords can learn the ins and outs property management. The classes take place throughout Chicago.

Recently, the CIC held a workshop at Lincoln Elementary School, 1111 S. Grove Ave. in Oak Park. During night one of the workshop, speaker Larry McCarthy, Capacity Building program director for CIC, spoke at length about the dramatic shift in managing apartment buildings since he began his career in 1971.

“There was once a time when the ownership and management of an apartment building was largely unregulated,” he said. “Landlords had free rein to operate the properties as they saw fit. As long as they had money for a down-payment, a building to purchase, and a cooperative lender?”they were in business. But times have changed.”

One of the most prominent changes in the last 20 years is the introduction of Fair Housing Laws.

Many property managers believe they know enough about fair housing laws in their state. But they’re oftentimes wrong, McCarthy points out.

To the crowd of around 20 property owners and prospective property owners, McCarthy asked, “Can anyone name all 13 protected classes under the state, federal, county and municipal fair housing acts? If you cannot you run the risk of violating these laws, which the penalties can be quite steep.”

A property owner, for instance, cannot refuse a possible tenant on such things as race, color, religion, age, or sexual orientation. Discrimination on any of those grounds will net a $500 fine for each offense, plus the victim’s court costs.

The best way to begin assuming ownership of a property is to learn as much as you can from the seller, McCarthy insists. Ask questions about the community, tenants and the seller’s reasons for selling the property. McCarthy advises maintaining a friendly relationship with your tenants, and for owners to know their rights.

“Make sure you know the rental policies and laws up and down,” said McCarthy. “Ignorance of the law is no excuse for breaking them.”

In selecting tenants, McCarthy suggests, reviewing the applicant’s credit history, previous landlord references, employment and proof of income.

“It’s good to have a good tenant selection plan in place specifying what you are looking for in your prospective tenant,” he said. “It won’t guarantee you will always have tenants that pay on time and are cooperative in all cases, but your rate of success will be much higher.”

The tenant’s application will include questions about their current living situation. A fee to conduct a background credit check may also be required. Landlords can request permission to do a criminal background check as well. It’s up to their discretion as whether the offense warrants dropping the applicant. But tenants can’t be ruled out for simply being accused of a crime.

“If he had a conviction when he was a teenager because of joyriding, I may just give him a chance,” said McCarthy. “However, if he was convicted of murdering

his last landlord, I may reconsider.”

And for many landlords and tenants, eviction remains the most unpleasant aspect of property ownership and management. But landlords just can’t give someone the boot without going through the proper legal channels, or else they’ll find themselves on the wrong end of the judge’s gavel?”if it reaches trial at all.

Attorney Michael Wexler spoke in depth about the dos and don’ts of eviction.

“There are basically four types of eviction notices,” he said. “There’s the five-day; the 10-day, addressing a violation of the lease by the tenant; the 30-day notice, when no lease exists or the lease has been otherwise terminated; and the special five-days for drugs notice.

“The five-day is only used for past rent,” Wexler added, “and basically states that the tenant must pay rent in full or risk losing his ‘right of possession’ of the premises.”

Wexler said notices must be specified. Failure to do so could put the landlord in a difficult situation, said Wexler, particularly if the tenant tries to pay half the balance of the rent and is turned away.

If the tenant gives the landlord the rent in full during the five-day grace period the landlord must accept it, Wexler said.

“They cannot refuse it and threaten to take it to court anyway because he will lose.”



 Screen prospective tenants consistently and without discrimination in accordance with the fair housing laws.

 Make repairs within 14 days.

 Provide at least two days’ notice before entering a tenant’s apartment?”unless it is an emergency?”and coordinate the tenant’s return time.

 Never lock out tenants, shut off their utilities or remove doors or windows on occupied units.

 Make sure you are aware of the interest your state expects you to pay on security deposits. It changes annually.

 Provide month-to-month tenants with 30 days’ written notice before changing rental terms or terminating a lease agreement.

 Make sure you decide how many tenants you will allow to rent your apartments depending on the size of the apartment.

It should look something like this:

 studio-1 person

 1 bedroom-2 persons

 2 bedrooms-4 persons

 If a landlord is contacted about narcotics being seized at his property, he must act quickly to eradicate the problem. If the problem persists, the owner faces potential financial penalties.

 All eviction notices must be handed to an occupant of the property over the age of 13.

 Violation of this rule and landlords face the dismissal of their eviction cases.

 Eviction notices must be handed to a resident of the apartment no matter how infrequently they are home. They can be served anywhere, even at the tenant’s place of employment. They should not be sent by mail, thus making it too easy for tenants to claim they never received it.

Community Investment Corporation is a mortgage-banking firm created in 1974 by Chicago’s banking community. Fifty-one banks, plus Peoples Gas, Fannie Mae, and the United Methodist Pension Fund, share in each CIC loan funding the workshops. For more information about the workshops, call CIC at 312/258-0070, or visit