Earlier this month, the Chicago City Council approved a measure designed to protect renters of properties that have fallen into foreclosure. Passed in a 45-4 vote, the new legislation, entitled “Keep Chicago Renting”, requires any individual or institution attempting to foreclosure on real estate to provide any tenants the opportunity to enter into a rent-controlled lease the property is sold or, in the alternative, pay the renter a “relocation assistance” fee of $10,600.
The current form of the ordinance is substantially different from how it looked when introduced to the Council last July. In its original form, the legislation would have banned any post-foreclosure evictions, except in certain situations, such when a tenant had failed to pay rent. However, due to concerns by Mayor Rahm Emanuel’s administration that the initial measure would be susceptible to legal challenges, a push was made to adopt the relocation fee provision instead.
According to the text of the ordinance, it has multiple purposes, including, to “protect, maintain, and improve foreclosed rental property”, to preserve the rental environment, the prevent further loss of property values, and to avoid and preserve rental housing stock, mitigate losses to area property values, and avoid neighborhood instability caused by foreclosures.
Alderman Richard Mell, who introduced the original version of the ordinance, stated that his fellow legislators recognized the importance of the measure, stating, “They’re all plagued by vacant properties where the banks have thrown the people out. The gangbangers go in. They strip the copper out of the properties and they use them for hangouts and they ruin the neighborhood. So this is one more tool, hopefully, [to] help bring our neighborhoods back.”
Opponents of the measure contend that the ordinance violates Illinois’s Rent Control Preemption Act, which prohibits local governments from enacting legislation that would effectively establish rent control. According to James E. Trausch, general counsel for the Illinois Mortgage Bankers Association, the ordinance is a “backdoor attempt at rent control” and would discourage banks from lending in Chicago.
The effects of the ordinance are certain to be widespread as a recent study by the Lawyers’ Committee for Better Housing, concluded that nearly 52,000 rental units fell into foreclosure in Chicago between 2009 and 2011. Further, there has been a significant uptick in crime of almost forty-eight percent occurring in abandoned buildings and vacant lots since 2005.
As this blog has mentioned before, both the Illinois and Chicago laws governing landlord-tenant relationships can be very complex and, although the provisions of the ordinance clearly favor tenants, it has yet to be seen how those protections can be taken advantage of. Accordingly, it is almost always in the best interest of a tenant that has become embroiled in a dispute with his or her landlord to consult with an experienced Chicago tenants’ rights attorney.
If you have questions regarding the rights and obligations you have as a tenant or believe you have been the victim of the unfair practices of a landlord, contact the experienced real estate attorneys at The Slater Firm, Ltd. today.