Chicago Housing Department officials blame feds for rental assistance check that went to deadbeat tenant instead of landlord

CHICAGO (CBS) -- It's a program meant to ease financial strain created by the pandemic, but a landlord reached out to us to say in her case, the city's Emergency Rental Assistance Program did the opposite.

Two weeks ago we shared her story, and we now have an update from Chicago's Department of Housing, which is blaming the feds.

You may remember Babette Finger's story. After her father passed away last summer, she became the landlord of his West Lawn home.

She said that's when the tenant upstairs stopped paying. Months went by with no rent checks, so she and the tenant applied for Chicago's Emergency Rental Assistance Program. Finger hoped it would cover her losses.

"I have documentation showing, congratulations, I have been approved," she told CBS 2.

But she says that check for $6,300 of your taxpayer dollars that was supposed to have her name on it went to the deadbeat renter instead.

"I just don't understand how they could send him my check after he didn't pay his bills for all those months. It's unbelievable," she said.

We reached out to the City's Department of Housing to find out why the check went to the tenant, not Finger, and they finally returned our emails after our original story aired. They said it was because Finger ended up selling the house at the end of last year.

"I just think it's kind of strange that I did not know that, if I sold the home, that I wouldn't get the money, it would go to him. I never would have even applied," Finger said.

The Department of Housing spokesperson couldn't say if that warning for landlords was in the Emergency Rental Assistance application documents. We certainly couldn't find it in the Frequently Asked Questions online.

City officials blamed the U.S. Department of the Treasury for making the rules for the Emergency Rental Assistance Program, which say it doesn't matter that Finger was applying for back rent she paid out before selling the house. The federal government says the check has to go to someone tied to that address, and the city listened. So instead of saving it, or donating it, they gave taxpayer money to a person purposefully not paying rent.

"The story that CBS 2 reported on was one of the most egregious examples that I know of," said Kristopher Anderson, with the Chicago Association of Realtors. "It's a yeoman's job that the city is attempting to do, but we are disappointed that they missed a great opportunity to do it in a more expeditious and more streamlined fashion."

Anderson said his organization and other housing advocacy groups wish they had a voice in making those Emergency Rental Assistance rules, with the hope of keeping red tape like this from happening. 

"I would ask the city and the bureaucrats at the city to examine that through the lens of not only of trying to get the money out the door, but also the fiduciary interest of making sure that the money is paid to the proper person," he said.

Finger said, in her case, it didn't. So that's $6,300 dollars and months of frustration she'll never get back.

"That person that was living in the home and still is does not deserve that money. Getting rewarded for not paying their rent, that sends a really bad message to the city," she said.

In an email, the Department of Housing told Finger she could hire an attorney to try and get her money back from that tenant, but at this point, Finger said she's already spent and lost enough money on this issue.