Renters find out their homes are in foreclosure
By Bob Okon
bokon@stmedianetork.com
Dec 18, 2010 07:52PM
- Share
Catherine Beavers, of Joliet, shows her frustration as she and her neighbors on Meadowsedge Lane talk about discovering the homes they rent from Mike Thakkar and his wife have all gone into foreclosure. | Brett Roseman ~ Sun-Times Media
Article Extras
JOLIET — Three neighbors on a single block of Meadowsedge Lane have become close as they learned that they all rent houses from the same landlord and all three homes have gone into foreclosure.
They’ve grown angry and confused while discovering that they’ve been paying rent on houses while their landlord had stopped paying the mortgage. They believe they’ve lost their security deposits, which are worth two months of rent. And, they’ve struggled to no avail to find a law that would have given them any right to know that the houses were going into foreclosure before they signed a lease.
All three moved into the Springwood South subdivision this year and were happy with their homes until it became evident something was wrong.
For Blaine Bowen, it was the knock on the door in May, a few days after he, Dotte Hamilton and their two teenaged daughters moved in. The man at the door did not identify himself, Bowen said, but he was looking for the owner and was surprised to find anyone living there.
“A month later, another knock on the door, and it was the process server trying to serve him foreclosure papers,” Bowen said. “He said he hasn’t been paying (the mortgage) since March. I said, ‘That’s funny. I’ve been paying him.’ The process server said, ‘I wouldn’t give him any more money.’”
Bowen kept paying rent until November. By that time, he had investigated and found out that the landlord or his wife owned other houses in the neighborhood, including the one next door and another across the street. All three houses were in foreclosure.
Worse yet, the neighbors learned that their landlord had filed for bankruptcy. The bankruptcy filing showed them that their landlord owned two other Springwood South houses. More worrisome to Bowen and his neighbors was that they were listed as creditors.
Bowen and his neighbors thought they could be kicked out of the houses in the foreclosure and lose their security deposits in the bankruptcy. That would leave them without homes and no money for security deposits on the next rental.
So, they stopped paying rent in November and December.
As Bowen explained in Will County small claims court last week, he planned to use the unpaid rent money to cover what he could lose from his security deposit.
But that’s not the law, Judge Ray Rossi told him.
Rossi told Bowen and Hamilton that they could go to the bankruptcy court to make a claim on their security deposits. “… But you can’t just not pay rent,” Rossi said.
Even so, Rossi, while ruling in favor of the landlord, ordered Bowen and Hamilton to pay only $600, not the $1,370 being sought for November rent.
Rossi did not explain why he did not order them to pay the full amount.
But Bowen isn’t getting much of a break. He was willing to pay the rent. However, the judge’s order also allows him to be evicted from the house.
And, that, according to Bowen, is what his landlord told him he will do.
The landlord
The houses on Meadowsedge Lane are in the name of Chitralekha Thakkar, a Downers Grove resident, according to the foreclosure lawsuits. But Bowen and his neighbors have always dealt with Thakkar’s husband, who goes by Mike Thakkar, although they do not think that is his real name.
Mike Thakkar is a familiar figure in the Springwood South subdivision, where he or his wife are believed to either own or manage several other rental homes. In addition to the five houses listed in Chitralekha Thakkar’s bankruptcy filing, the tenants say Mike has told them that he manages others.
“He would drive around the neighborhood every day,” said Antoinette Jackson, who lives in a Thakkar house in foreclosure at 912 Meadowsedge. Jackson moved into the house in April. According to court records, the mortgage on the house went into default that same month. Jackson said Mike Thakkar also showed her the house at 917 Meadowsedge, where the mortgage was no longer being paid.
Jackson said she did not find out about the foreclosures until she met Bowen and Hamilton.
“They said, ‘Do you rent from Mike Thakkar?’” she recalled. “I said, ‘Yes.’ They said, ‘Do you know your house is in foreclosure?’”
The Thakkars would not talk with The Herald-News for this story.
In court, Mike Thakkar told the judge that the couple had fallen upon hard times since his wife lost her job.
Just a few years ago, they were busy buying houses in the Springwood South subdivision, which was built during the recent construction boom in an area along Mission Boulevard south of McDonough Street.
The mortgage on the house where Jackson lives, 912 Meadowsedge, was issued Feb. 2, 2007, for $147,750, according to the foreclosure suit filed June 30. The amount still due is $142,913.
The mortgage on the house at 915 Meadowsedge, where Bowen and Hamilton live, was issued Jan. 18, 2007, for $143,250. The mortgage has been in default since March with an amount due of $138,231. The foreclosure suit was filed Aug. 20.
Next door, at 917 Meadowsedge Lane, a mortgage was issued to Thakkar on Dec. 21, 2006, for $131,250. The last payment was made March 1, according to the lawsuit, with an amount due of $126,447.
Legal options
The foreclosure lawsuit on the house at 917 Meadowsedge had already filed in court when Robert and Catherine Beavers moved their family in.
Catherine Beavers finds it incredible that a house could be rented while in foreclosure without that fact being disclosed to the tenant. She also stopped paying her rent in November and will have to defend herself in small claims court this month. Beavers, like Bowen, thought the likely loss of the security deposit and the hidden foreclosures would help her make a case. She was disappointed to hear the judge ruled against Bowen.
“It’s like no one’s hearing us,” Beavers said. “We want an attorney or someone to represent us and say this (foreclosure) has to be disclosed to tenants. There ought to be a law.”
But there’s not.
“I don’t know of anything that requires the landlord to disclose it,” said Jeff Prendki, an attorney specializing in housing cases for Prairie State Legal Services, a legal aid agency in Joliet.
A federal law developed in the midst of the foreclosure crisis does give added protection to a tenant’s lease when a house is taken over during foreclosure, Prendki noted. But, he said, “That’s why not paying rent during a foreclosure is a bad idea.”
Also, he said, a foreclosure could take eight months or more before the landlord no longer has ownership of a house. In many cases, Prendki said, the lease will be up long before the foreclosure is completed.
The security deposit is another matter, Prendki said. Tenants often lose their security deposits in foreclosures, although they can put up a fight in court. Prairie State Legal Services offers advice on how to pursue a landlord for a security deposit.
In bankruptcy, however, security deposits normally are protected for tenants, because the money is held in trust for them, said Scott Alsterda, the trustee overseeing Chitralekha Thakkar’s bankruptcy. However, he said. “In her bankruptcy, she did not list any security deposits that she was holding for someone else.”
If the Springwood South neighbors don’t get their money, neither will any other creditors. Thakkar’s bankruptcy lists $792,300 in assets and $938,608 in debt. But the assets consist mostly of the five houses in Springwood South, which, Alsterda said, are so loaded with debt that they have no value to the creditors.
“I have determined,” he said, “that there are no assets that I will be able to do anything with.”