Do You Qualify For Rental Protection Under the Keep Chicago Renting Ordinance?

On June 5, 2013, the Chicago City Council passed the Protecting Tenants in Foreclosed Rental Property Ordinance, otherwise known as the “Keep Chicago Renting Ordinance” with a 45-4 vote. The ordinance went into effect on September 24, 2013. The ordinance is expected to protect over 10,000 families per year, which might include yours. If you’re a tenant, the following is a walkthrough to see if you qualify to be protected under the ordinance, and your rights accordingly.

You Need To Be A Qualified Tenant

Not every tenant qualifies for protection under this ordinance, you must be a “qualified tenant.” In order to be a “qualified tenant” you must meet the following criteria:

• (1)must be a tenant in the foreclosed rental property on the day that a person becomes the owner of that property; and
• (2) have a bona fide rental agreement to occupy the rental unit as the tenant’s principal residence

You must meet both of the criteria listed above. If you have a copy of your lease available look at the lease start date and compare it to the date the rental building was foreclosed on. You can check what date your rental building was foreclosed on by checking the tenant's notice sent by the new owner. The new owner of the building is required under this ordinance to send each tenant a notice within 21 days of becoming owner of the rental property or post it on the main entrance of your building. If your lease started before the rental property was foreclosed on, then you meet the first criteria, otherwise, regrettably, you don’t.

In order to meet the second criteria, you cannot be related to the mortgagor (the individual that the property is being foreclosed on) as a child, spouse, or parent. The rent you pay must not be substantially less than the fair market rent for the property. So if for example, you were able to receive a great discount on the rent because you were good friends with the building manager, you will be in jeopardy of not qualifying for the protection under the ordinance. The last aspect of the second criteria is that your dwelling unit must be your principal residence. If you have a second or even third unit, a good rule of thumb is to estimate how many days you will stay at each of your units, the one you stay at the most is most likely your principal residence. Other factors may include where you ask your mail to be sent, where you are registered to vote, etc.

If you qualify under the criteria listed above, then you are afforded great protection by the ordinance. The owner of a foreclosed rental property must offer a qualified tenant a one-time relocation assistance fee of $10,600. or offer the option to renew or extend the tenant’s current rental agreement with an annual rental rate that for the first 12 months of the renewed or extended lease, does not exceed 102 percent of the qualified tenant’s current annual rental rate and for any 12 month period thereafter, does not exceed 102 percent of the immediate prior year’s annual rental rate.

It is important to note that this time the effect of the ordinance and its applicability will have to be defined through judicial decisions and practice.