Absentee Landlords: Paperwork Masks Repeat Offenders

From the outside, 6351 S. Loomis Ave. looks fine, say tenants. Inside, however, it has suffered from poor maintenance. (Photo by Andre Vospette)

From the outside, 6351 S. Loomis Ave. looks fine, say tenants. Inside, however, it has suffered from poor maintenance. (Photo by Andre Vospette)

Ernestine Jackson thought at first that the January chill invading her Englewood apartment was temporary.

She bought two electric heaters. She burned her stove for extra warmth, and boiled water for baths. She wore layers and layers of clothes at all times.

But finally, as cold days turned into even colder nights, Jackson got frustrated. To make matters worse, she discovered she could use only one heater at a time. Using both caused an electrical short, and she refused to go fix the fuse box in the basement, where there was standing raw sewage.

After about three weeks, she went in tears to 16th Ward Alderman Shirley Coleman–”Jackson’s former Sunday school student. “I just got upset,” Jackson said.

The gas to her building had been shut off after being illegally reconnected months earlier. Coleman called a press conference.

The next thing Jackson knew, television cameras surrounded the building at the corner of 64th Street and Loomis Avenue, and reporters were knocking at her door. The story was in the city’s newspapers and airwaves for days. The case went to court, where the building was ordered into receivership–”placed in control of an independent party so that repairs could be made and bills could be paid. It also went to the floor of the City Council, where an ordinance was introduced to prevent similar gas shut-offs from ever occurring without notice.

The real story, however, is not about the shut-off, but how a nice building slid downhill. It illustrates how the city’s worst landlords persist, and how low-income tenants remain at their mercy. City officials, for instance, knew about other problems with the building months before it had no heat.

The Chicago Reporter spent four months reviewing court documents, analyzing housing court and taxpayer databases, and interviewing officials, activists and tenants to find out what happened, and why.

The investigation found that, despite changes in state law designed to hold landlords accountable, many continue to find ways to keep their identities hidden beneath layers of paperwork. And city inspectors and attorneys charged with going after unscrupulous landlords don’t have the time or the technology to investigate repeat offenders.

Recent budget cuts and hiring freezes have increased the strain, said Mark Limanni, the city’s chief assistant corporation counsel, who has been working with housing court cases for nearly 20 years.

John Roberson, the city’s new building commissioner, said he does not know the specifics of the Loomis case, but he emphasized that the city does a good job with its resources. He said he plans to aggressively pursue bad landlords.

“I drive through Englewood, where my grandmother owns a home, and I see how some of these landlords keep their properties,” Roberson said. “I want to send a message to them. This can’t continue.”

Still, 16 years after the City Council passed the Tenants Rights Ordinance, tenants and activists said tenants feel little liberty to exercise their rights, which include withholding a portion of rent when a problem isn’t fixed, because a shrinking affordable housing market makes them beholden to landlords, even bad ones.

Twenty-one predominantly black community areas, and one that’s Latino, lost both rental housing and population this past decade, shows a U.S. Census data analysis.

Englewood, for instance, lost 1,731 rental units and 8,212 residents over the last decade.

“Population loss and housing loss is a real negative thing for a community,” said Rachel Johnston, the Chicago Rehab Network’s operations director. “There are less eyes on the street, less people to look out for each other, less people to shop in the stores.”

“The affordable housing crisis is what makes it easier for [landlords] to be nasty,” said Doug Timmer, a researcher for ACORN, a national group that does grassroots organizing. ACORN has an Englewood office at 2143 E. Marquette Ave.

Neglected buildings cost taxpayers. City attorneys and inspectors spent about 20 hours on the Loomis building’s heat-related housing court case, much more than on a typical housing court case, according to Jennifer Hoyle, spokeswoman for the city’s Law Department, and Kristen Lobbins-Cabanban, director of communications for the Department of Buildings.

But officials, community members and tenants pointed out that Loomis and buildings like it–”the same owners had 13 others in similar disrepair–”cost the community more than time and money.

With electric heaters and stoves running constantly at full power, the Loomis building was at increased risk of fire. Open flames from space heaters, burning stoves and other sources caused more than half of the fires in the city last year, according to Molly Sullivan, the Fire Department’s public affairs director.

Deteriorating buildings attract crime and drag down the neighborhood, said William Townsend, assistant director of the Chicago Police Department’s Community Alternative Policing Strategy, known as CAPS. The department’s Bad Buildings Program, part of CAPS, encourages residents to pursue complaints against abandoned, deteriorating and crime-ridden buildings and to follow them through the court process.

Jackson said she was embarrassed to live in a building that was not being kept up. “I think it affects the community,” she said. “People notice it.”

Promising Ventures

Tenants said that, five years ago, the 16-unit building at 6351 S. Loomis Ave. was a nice place to live. It was well kept and had a janitor on call.

From the outside, the small beige-brick apartment building looks fine, said Marjorie Jones, who said she has been proud to live there for 12 years. The building sits across the street from a large park and was home to seven children and six adults, including one elderly double-amputee, court documents show.

When Leroy and Sheri Tyler, who live in the south suburb of Olympia Fields, became her landlords in 1998, Jones’ first impression was that they were pleasant people.

But then “I noticed a change,” Jones said. “They didn’t do things like keep the garbage picked up or shovel the snow. They had problems with water leakage.”

While the Tylers were the landlords, responsible for the building’s upkeep, their names were not on the property deed, which is the legal paperwork that property owners must file with Cook County.

Dennis Kral, a real estate lawyer with a longtime practice in south suburban Homewood, said he sold the apartment buildings to the Tylers in a “contract for deed” deal, which allows someone who can’t qualify for a traditional mortgage to buy property through another person.

The Tylers told the Reporter they wanted to share their story, but their attorney, Ronald Gertzman, a solo practitioner based in downtown Chicago, would not allow them to be interviewed. They filed suit against Kral in October 2001, charging he swindled them out of money from a property sale.

In 1997, Leroy Tyler hired Kral to do some legal work, according to court documents. Kral said Tyler asked him to consider helping him buy four 12-to15-unit South Side apartment buildings.

In May 1998, Kral took out mortgages and bought the buildings for Tyler. Tyler gave Kral a small down payment and made monthly payments, as though Kral were the bank and the Tylers held a mortgage with him.

While contracts for deeds are not common in Chicago, Limanni said there are many other arrangements that allow the person legally responsible for the property to avoid being listed on the deed. Many times, court procedures are delayed because the first person summoned tells the judge who should be added as a defendant.

“You would be surprised how many deals are written on the back of a napkin,” Limanni said.

Kral had previously been such a conduit for financing properties, and profited from it. He said of Tyler, “I thought this guy would do a great job and make me and himself a lot of money.”

Kral said he didn’t check on the buildings, but believed Tyler was maintaining them. Within a year, Tyler convinced Kral to buy 10 additional buildings scattered over the South Side, giving them 14 in all.

But Kral and the Tylers were quick to learn how hard it is to be a relatively big-time landlord in Chicago, especially in poor neighborhoods where it’s hard to make a profit and pay for maintenance.

The city Department of Buildings first became aware of problems at the Loomis apartments nine months before the building drew media attention. A city inspector went there April 25, 2001, and found 13 code violations, according to court documents.

They included: defective plumbing, stagnant sewage and water in the basement, fallen ceiling plaster, and exposed electrical wiring under the back porch, near where children played.

On Aug. 8, the city took the complaints to Housing Court, its only option when landlords won’t address problems. Heritage Community Bank Trust No. 499 and Kral were named as the defendants. A trust is a legal arrangement in which a person or institution owns property for someone else’s benefit. Not everyone with a stake in the property will appear on public records. However, state law requires the property’s beneficiaries be revealed if a court subpoenas the information.

So, at the first court hearing in late August, Kral showed up to tell Cook County Circuit Court Associate Judge Abishi C. Cunningham that he was the wrong person.

Although he was the primary beneficiary of Trust No. 499, Kral contended he had nothing to do with the day-to-day building operations and was not legally responsible for maintenance. Cunningham set a new hearing date for the next month.

This was not the first time Kral reported to housing court to say he wasn’t responsible. Of the 14 buildings Kral owned with the Tylers, eight of them wound up in housing court and, in almost every instance, hearings had to be continued so Tyler could be summoned.

Predatory Financing

On Sept. 17, 2001, the Loomis case was back in housing court with Leroy Tyler added as a defendant. Cunningham ordered an interior inspection of the building.

At the same time they were fighting the court case, the Tylers and Kral were fighting each other. Kral and Heritage Community Bank, based in south suburban Glenwood, had already seized and sold some of the buildings. And Kral was having his own financial difficulties. Heritage Community Bank was preparing to foreclose on all the properties and the assets Kral had put into the trust, including a car and a house in Iowa that he had bought for his daughter.

Court documents reveal that Kral reached a settlement with the bank.

On Oct. 16, Sheri Tyler, through her attorney, Gertzman, filed a lawsuit against both Heritage Community Bank and Kral. In it, Sheri Tyler claimed that Kral had worked as an attorney for the bank and served on its board of directors. He had more legal savvy than the Tylers and an inside line to the bank, she charged.

Tyler also alleged that Kral secretly created a second trust.

She focused on a corner building at 79th Street and Crandon Avenue in South Shore for which Kral took out nearly $2 million in loans. She alleged that, in 2000, Kral was unable to make timely payments on the mortgages he held with Heritage Community Bank, and it began to “closely monitor Kral’s borrowings.”

Tyler claimed that Kral began liquidating the Tylers’ real estate interests by transferring properties from the first trust to one she did not know existed. Kral did this without Tyler’s consent by representing himself as her attorney, according to the lawsuit.

Kral told the Reporter that the Tylers had stopped taking care of the properties and making payments to him or utility companies. The 33-unit Crandon apartment building, for example, had a 13-count housing court complaint filed Sept. 25, 2000, in which the owners were cited for allowing debris to accumulate in the basement, holes to remain in the walls and a dilapidated, dangerous porch to go unrepaired.

In the winter of 2000-2001, the Crandon building was one of five in the Kral-Tyler partnership that the court ordered into receivership. Over the three years they worked together, other buildings Kral purchased for the Tylers went from occupied to vacant. One sat abandoned the entire time the venture owned it.

As both the vacant and occupied buildings sat waiting for renovation, people living around them began to wonder what was happening. Parents and staff at Park Manor Elementary School, which sits kitty-corner from a Tyler building at 71st Street and Rhodes Avenue in the Greater Grand Crossing neighborhood, were worried.

Carolyn Yelverton, president of Park Manor’s Local School Council, said an empty building so close to a school is a danger zone for curious children and a haven for predators. “We have been blessed that nothing has happened,” she said.

Kral felt he and the Tylers got in over their heads. “If I had kept it to four or five properties then it would probably be okay,” Kral said. “I made a big mistake.”

Kral also said it is difficult to make money and pay for maintenance in low-income communities.

“If it is in a bad neighborhood, you can’t expect to have the tenants send the rent even three blocks,” Kral said. “You have to go and collect it. And, if someone doesn’t pay, you have to evict right away.”

Other landlords who manage low-income housing agreed with Kral. Joe English, owner of Oak Park Realty, has rented out apartments on the city’s South and West sides for more than 20 years. He said between upkeep, taxes and utilities, it is virtually impossible for a landlord offering affordable housing to make a profit. He especially complained about eviction laws that allow non-paying tenants to stay for months before being kicked out.

English said he offers affordable housing because of his concern for people, but the only way he stays afloat is to also rent expensive properties in the suburbs.

The way the Tylers bought the buildings might have been another problem.

Often the people who sign “contract-for-deed” deals wind up getting squeezed, because they often agree to pay an exaggerated monthly payment, said Cathy Klump, organizer for the Chicago-based National Training Institute and Information Center, which trains grassroots organizers.

Nor do the sellers have to comply with any of the traditional real estate transaction laws, she said. “There are major loopholes,” Klump said.

She said that those entering into contract-for-deed deals tend to prey on poor people, and she calls such deals”predatory financing.”

Falling Behind

Eboni Mayo, 24, said she feels as though Kral, a man she never saw, who profited while tenants suffered, is more culpable than the Tylers. When Mayo moved into the Loomis building in November, it was the second time she had rented from the Tylers. She had lived in an apartment she loved at 7526 S. Colfax Ave. in South Shore.

“It was the first apartment I felt comfortable in,” Mayo said.

But in November 1999, the Colfax building was cited by a city inspector for having 33 code violations, including large holes, cracks in interior walls and failure to exterminate roaches and rats, court documents show. In 2000, the Tylers were fined $16,500.

At that time, Heritage Community Bank took control of the Colfax property and hired a real estate management company. Mayo said she thought the building’s upkeep deteriorated even more.

So, when the Tylers offered her an apartment in a building they still managed, she moved into a Loomis apartment.

On Dec. 17, 2001, the housing court case filed four months earlier against the Loomis property was dismissed. Hoyle, of the city Law Department, said the two attorneys who worked on the case do not remember the specifics, but she guessed the dismissal was due to “substantial compliance,” meaning the repairs had either been made or were scheduled to be made.

At any one time, an attorney on the city’s housing court team can be working on 100 cases, Hoyle said. She noted the two attorneys working this case have already left the city for other jobs.

A city building inspector is supposed to examine every building before each court date so that attorneys and the judge know how to proceed, Hoyle said. But in this case the city Buildings Department has no record of any inspections at the Loomis building between June 8, 2001, and January 31, 2002.

The gas in the Loomis building had been shut off in July 2000, and, in early January 2002, People’s Gas discovered it had been illegally reconnected. The company sent a worker out Jan. 15 to turn off the gas line from the street, and did not inform the city or the tenants because the work needed to be done as quickly as possible, said Rod Sierra, the company’s vice president of corporate communications.

At first, Mayo thought the heating system was merely broken. By nightfall, however, she was beginning to get worried. The radiator was icy. Outside, traces of snow whipped through the air and the temperature fell below freezing.

Once she realized the gas was cut off, Mayo said, she called the city building department, but got no response. Another tenant called Coleman, who referred her to the Metropolitan Tenants Organization, a nonprofit tenant advocacy group. Coleman said she gets many calls from residents and, when possible, offers them referrals.

“I thought everything had been taken care of,” Coleman later told the Reporter.

But on Jan. 28, an ACORN organizer recruiting members door-to-door learned the building had no heat.

The organizer alerted ACORN’s Timmer, who said he called Anthony Simpkins, the city’s attorney who handles heat-related cases. Although the Buildings Department told Timmer they had already sent out an inspector, Simpkins told Timmer he had yet to hear about the case.

Meanwhile, Jackson grew more upset. Her granddaughter, who has asthma, had come into town for three weeks. Jackson couldn’t visit with the little girl because it was too cold in the apartment.

That’s when she went to Coleman. Knowing the power of the media, Coleman made sure the Loomis building was a feature on the evening news.

Timmer talked to Simpkins again two days later. Even though the building had been in housing court only two months before, Simpkins told him a title search must be done to find out who owned the building, Timmer said.

An emergency court hearing was held Feb. 4. Associate Circuit Court Judge P. Scott Neville appointed David Feller, manager of buildings for the Chicago-based company Globetrotter Engineering, as the receiver of the building.

The company won a contract from the city to be the court-appointed receiver in heat-related cases, said Feller. Neville ordered him to get the tenants heat and hot water.

Jones and Jackson rejoiced.

Feller’s first step was to conduct a feasibility study to figure out if the Loomis apartment was worth saving. Pictures in the court file showed water in the basement and pipes in disrepair.

But other than that, the building was not in dire straits, Feller said. “This building just needed some upkeep,” he said. “There was garbage in the back of it, and some of the doors were broken.”

The next day, while workers from People’s Gas waited, Feller got keys from Leroy Tyler at a nearby gas station. With television cameras camped around the building, Tyler didn’t want to show up there, Feller said.

By mid-afternoon, radiators began heating up.

In April, Feller was ordered by the court to turn over the building to Heritage Community Bank. Tenants reported that, for the first time in years, the building was being fixed.

While they were happy about the heat, tenants said the experience left them bitter. Mayo said she is looking to buy her own place where she can better control her fate.

“I have been burned by scum landlords,” she said. “People need to understand just because [they] can live really nice out in the suburbs somewhere doesn’t mean [they] can treat people any type of way.”

Contributing: Chanel Polk and Elizabeth Olsson. Nneka Amu, Josh Drobnyk and Abbie Van Sickle helped research this report.

Comments are closed.