Three thousand housing court cases are filed per year, according to county court records. Many of which are vacant, abandoned and distressed properties that may be eligible for some level of court-ordered receivership. These properties are throughout the city particularly in neighborhoods like Austin, Englewood, Garfield, N. & S. Lawndale and Woodlawn.
With prime areas of the city experiencing various degrees of gentrification, receivership is now being viewed by city officials as a possible tool to help stabilize the Black community. Could this be an answer to prayers?
Just last week, over 70 real estate professionals, investors and concerned residents from Chicago convened at East-West University in the South Loop. For the second time, the Dearborn Realtist Board (DRB) and its president, Courtney Jones, hosted the Receivership Training Program sponsored in conjunction with the City of Chicago Department of Planning & Development at the university.
DRB – the oldest Black real estate trade association, established in 1941 – hosted the five day, 30-hour course designed to introduce the public to the basic tenets of what it takes to become a court-appointed receiver.
Stemming from the English Chancery Courts, the concept of receivership as it relates to housing is simple: the court appoints someone to be responsible for the property of others to maintain, service, manage and/or repair the property.
Receivership – An Overview
According to attorney of counsel M. Faisal Elkhatib, who represents private receivers, there are several ways a property can end up in receivership. In the majority of instances receivership arises “. . .from a city lawsuit about several major municipal building violations on a property and the owner is: no where to be found, deceased, or failing to show up in court and failing to correct the violations.”
The process typically starts with a call to the city’s 311 center and falls under one of three categories: heat call, vacant building call, or a conservation call. Last year, over 50,000 such calls were placed to 311.
Once a call is logged, a building inspector is sent out to the site to investigate the complaint(s). If the violations are substantiated, the building owners, responsible parties including the mortgage company – if there is a mortgage – will be hauled into the Department of Administrative Hearings or the Cook County Circuit Court to address the municipal violations.
Illinois Compiled Statues 65 ILCS 5/11-13-15 and 5/11-31-1 & 2 grants police power to Chicago to determine if a building or structure “. . fails to conform to the minimum standards of health and safety” and “the owner or owners of such building or structure fails, after due notice, to cause such property to conform, the municipality may make application to the circuit court for an injunction requiring compliance,” according to the statue.
Sanina Ellison Jones, managing broker for Chicago Homes Realty Group, and one of the trainers presented that once all interested parties are notified and given the opportunity to respond, but fail to reply, at this stage the process to appoint a receiver may commence.
According to other presenters, anyone can become a receiver provided they meet the court’s exacting requirements. During the week-long course attendees learned the fine points of receivership including: the difference between a limited versus general receiver, how to read a court order, conducting a feasibility study to determine if a property is worth taking on and the potential risks involved, etc.
The overall goal is to move qualified parties towards receivership as soon as possible.
As attorney Elkhatib goes over the requirements, it becomes readily apparent that this process isn’t for everyone. An interested party must have knowledge of: general contracting, financial wherewithal to pay for the process, administrative training to manage the heavy documentation and legal requirements to obtain a receivers’ certificate. And most importantly, the ability to weather long-term risky cash outlays, he shares.
Undaunted, real estate investor Alonzo Anderson – who heard about the class from the Bronzeville Chamber of Commerce president – recognizes the connection between being a receiver and taking control of his community.
It’s an opportunity to “convert the dangerous and hazardous properties to something more appealing,” he states. And “not only can we influence the evolution of our neighborhoods,” but also “increase its value.”
Social media producer Bertina M. Power, of the Power Hour undeniably agreed: “We have to work together. Collaborating our knowledge, resources, experiences and funds – house by house, block by block – we can do it,” she said with the realization the receiver may end up owning the property.
In some cases, for little or nothing, in others, for the initial investment and time spent on the case which could tarry from several months to 2 years in more challenging cases.
At times, for some attendees, the information appeared to be overwhelming but foreclosure specialist/activist Jah Ranu Menab said: “I’ve been to many classes and this one was by far the best,” as he praised DBR for the well-organized handouts, presentations and speakers, including attorneys from Corporation Counsel and Honorable Leonard Murray, supervising judge over Housing.
During any given year the city of Chicago appoints up to 250 receivers; currently, there are 172 receivers appointed and only five of them are Black, according to sources close to the court. The training program is held only once per year.
Next up – a detailed analysis of Chicago’s receivership program. Meet some of the movers behind the scenes including an active receiver. See how the courts operate up close. What’s required? What are some of the challenges? What happened in the past? And, how this opportunity could potentially benefit you, your block and the community at large.
You don’t want to miss this intriguing development.
Stay tuned . . .
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