Keep Chicago Renting

Understanding the Protecting Tenants in Foreclosed Properties Ordinance

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 home or a condominium unit, and has a valid agreement to live in the rental property which has been foreclosed, or there is a pending foreclosure action, 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 Sept. 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: (I) offer a new lease as the result of a good faith negotiation with the tenant or (2) pay relocation assistance of $10,600 to the tenant. Tenants may reject the offer of a new rental agreement and still receive $10.600 in relocation assistance. 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? 

No later than 21 days after a person, company, or bank becomes the new owner of a foreclosed rental property, notice of the change in ownership and potential eligibility for relocation assistance 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 a new lease as the result of a good faith negotiation with the tenant; or the new owner must (2) pay relocation assistance of $10,600 to the tenant. Tenants may reject the offer of a new rental agreement and still receive $10.600 in relocation assistance. 

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. 

What organizations offer assistance to tenants? 

Lawyers' Committee for Better Housing - 312.347.7600  
Metropolitan Tenants Organization - 773.292.4088 

Related Documents

Note: Administration of these components of the KCRO has transitioned from the Business Affairs and Consumer Protection to the Department of Housing with the passage of ordinance SO2021-2791 in July 2021. Updated documents at links below are forthcoming in August 2021. 

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