What The Keep Chicago Renting Ordinance Means For Creditors

The Keep Chicago Renting Ordinance is in full effect today. The ordinance was passed by the Chicago City Council on June 5, 2013. The effective date of the ordinance was September 24, 2013. The law applies to certain foreclosed rental properties within the City of Chicago. Below is a brief description of the pertinent sections of the Keep Chicago Renting Ordinance for creditors acquiring foreclosed properties.

Registration of Foreclosed Rental Property

The creditor (the new owner) of the foreclosed property must register the property with the commissioner after acquiring the property. The ordinance lists the information that must be contained in the registration, part of which, is the designation of an authorized agent. The creditor receives all notices through the authorized agent. The City of Chicago is then allowed to serve the authorized agent with any legal action initiated by the City of Chicago and in regards to the property.

The registration fee is $250 and any changes to the information contained within the registration must be submitted to the commissioner within 10 days of the changes taking place. If the property is sold to a third-party purchaser, you must also notify the commissioner within 10 days of the sale.

Notice To Tenants

Within 21 days after becoming the owner of the foreclosed rental property, the creditor must make a good faith effort to identify all tenants in the building. The owner must send all of the identified tenants a notice in English, Spanish, Polish, and Chinese detailing the tenants’ possible rights to a renewal of their lease or the possible right to relocation assistance. The ordinance itself provides the language/disclosures that must be contained in the notice. A general notice must also be posted on the general entrance to the property within 21 days. Any additional tenant after the 21 day period, must have a notice sent within 7 days of the discovery of his/her identity.

Tenant Relocation Assistance

The creditor of a foreclosed rental property must offer a qualified tenant a one-time relocation assistance fee of $10,600. The other option is to offer the option to renew or extend the tenant’s current rental agreement with an annual rental rate that: (i) 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 (ii) for any 12 month period thereafter, does not exceed 102 percent of the immediate prior year’s annual rental rate.

The relocation fee must be paid within seven days of the qualified tenant vacating the property and must be in the form of a certified or cashier’s check. The owner may deduct past-due rent from the relocation fee. The owner may not deduct money from the relocation fee for any other reason other than past due rent, including damage to the property.

There are severe consequences for not abiding by the ordinance. If the owner does not comply with the requirements in the Ordinance, the qualified tenant is entitled to damages in an amount equal to two times the relocation assistance fee.

For more information about the Keep Chicago Renting Ordinance, contact FactorLaw today.