PROTECTING TENANTS IN FORECLOSED RENTAL PROPERTIES
Chapter 5-14, Municipal Code of Chicago
Who is protected by this ordinance? A person who lives in a building with one or more rental units, including a single family house or a condominium unit, and has a valid agreement to live in the rental property which has been foreclosed is protected by the Keep Chicago Renting Ordinance.
Is every tenant protected? No, the ordinance does not apply to a tenant whose child, spouse, or parent owned the building before the foreclosure.
When did the ordinance take effect? The protections for tenants began September 24, 2013. Any change in ownership of a rental building due to foreclosure sale after that date does require the notice to tenants and possibly payment of relocation assistance.
What type of notice will a tenant receive? The ordinance requires the new owner of a foreclosed building to explain in writing that the tenant may be eligible for relocation assistance under certain circumstances. The new owner must either: (1) offer the tenant the option to renew or extend the current rental agreement or (2) pay relocation assistance of $10,600 to the tenant. This notice must include the name, address, and phone number for the owner or a manager of the property and must also be given in English, Spanish, Polish, and Chinese.
When will the notice about foreclosure having been completed be given? Within 21 days after a person, company, or bank becomes the new owner of a foreclosed rental property or within 7 days of determining the tenant’s identity, notice of the change in ownership and options must be delivered or mailed to the tenant and also posted on the entrance of the building.
What options does a tenant renting a unit in a foreclosed building have? The new owner of the building may (1) offer to renew or extend the tenant’s rental agreement for the rental amount not greater than 102% of the tenant’s current annual rent. Or the new owner must (2) provide qualified tenants with relocation assistance of $10,600.
What can a tenant do if he does not receive the notice or if he is not offered one of the options explained above? If a tenant believes the building owner did not follow the law, he or she may file a complaint with the City of Chicago by calling 3-1-1 to report the problem. A form will be sent to the tenant that must be completed and returned for the City to investigate and enforce the law.