Both sides can decline to renew an apartment lease

Q. My husband and I have been renting a unit in an apartment complex for almost 3 years. Our rent has never been late nor have we violated any terms of our lease as written.

We, along with some other residents, have e-mailed complaints/suggestions to the management company. We have also contacted various governmental agencies for environmental and health reasons.

We were told back in June if we didn't like it here they would let us out of our lease without penalty. Our lease ends Nov. 30, and we received a notice of nonrenewal on Oct. 9, which I questioned because my experience with real estate law when I was licensed in this state, says a 60 day notice is required.

We are stressed and in wonderment on how this can happen to good renters. I have a 74-year-old husband with emphysema and kidney failure and I am a 62-year-old handicapped woman. This has caused us much stress and will cost us money that we didn't expect to spend. Any ideas?

A. Section 5/9-205 of the Illinois Code of Civil Procedure provides in cases of a year-to-year tenancy, 60 days written notice shall be sufficient to terminate the tenancy at the end of any year. The question is: Do you have a year-to-year tenancy?

If you have a written lease that terminates on Nov. 30, you do not have a year-to-year tenancy. Week-to-week, month-to-month or year-to-year tenancies are generally described as oral tenancies which automatically re-up and continue each period until one of the parties terminates the tenancy. Sometimes these tenancies start as a written lease then evolve into year-to-year tenancies. This, however, does not appear to be your situation. Accordingly, just as you have the right to leave on Nov. 30 without notifying the owner, the owner has the right not to offer you a new lease commencing Dec. 1.

If moving would cause great hardship, I would suggest appealing to the management company to reconsider its decision. Emphasize your payment record and indicate that any complaints you have made in the past were an attempt to improve the community. If you have no luck with the on site manager, try to move up the chain. Good luck.

Q. I am a self-employed painter who signed a contract with a guy to paint his townhouse. After the job was done, the owner told me he could not pay me the full $3,000 he owed me and asked if I would accept $1,500 for the work. I said no, told him I would sue him and left.

The owner called me a couple of days later and told me he is on the verge of bankruptcy and I had better accept the $1,500 or I would probably end up with nothing. Obviously, I would like to get paid the amount we agreed on, but $1,500 is better than nothing.

What could I do to try and figure out if he's bluffing or if he's really in trouble?

A. First thing I would do is record a mechanics lien on the property. This may give you a priority over other creditors in the event he does declare bankruptcy.

Second, you could search the county records to determine when he purchased the property, if there is one or more mortgages on the property and the amounts of the mortgages and has anyone else liened the property.

Usually, when a party is truly on the verge of bankruptcy, he or she has numerous creditors. Some may have already obtained judgments and those judgments generally turn into judgment liens against the debtor's property. If there are numerous liens against the property, that is a sign the owner is in trouble.

If he purchased the property last year, it's very possible he has little or no equity in the property; however, if the property was purchased more than five years ago, there probably is equity in the property, unless it has been eaten up by refinancing. If he has significant equity in the property, chances are he is not filing bankruptcy. You can get an idea of his equity position in the property by researching what these units are selling for today and subtract the amount of any mortgages on the property. Keep in mind, the older the mortgage, the more he has reduced the mortgage balance.

If you determine he has significant equity in the property, hold tough for now and record the lien. There is a good chance you will be paid in full down the road. There are numerous technical issues with mechanics liens, so I strongly suggest you immediately speak to a real estate attorney.

• Attorney Tom Resnick's column appears every other week in Homes Plus. Send your questions to 345 N. Quentin Road, Palatine IL 60067, by e-mail to tdr100@hotmail.com or call (847) 359-8983.