The City of Chicago Residential Landlord Tenant Ordinance strictly governs the conduct of most landlords within the City of Chicago. Nearly all rental property within the City limits is regulated by the CRLTO. Some rental units, however, are not covered by the strictures of the Ordinance.
In fact, Section 5-12-010 provides in part that the CRLTO "...applies to, regulates and determines rights. obligations and remedies under every rental agreement entered into or to be performed after the effective date of is chapter for a dwelling unit located within the City of Chicago, regardless of where the unit is made, subject only to the limitations contained in Section 5-12-020".
Section 5-12-020 of the Chicago Residential Landlord Tenant Ordinance sets forth the various exclusions from coverage of the ordinance. The most common exclusion from coverage arises under 5-12-020(a) of the CRLTO in situations where a building both (1) contains six or fewer units and (2) the landlord resides in the building. Even when the ordinance does not apply in the case of owner occupied buildings of six units or less, the provisions of Section 5-12-160 continue to apply.
Unfortunately for many condominium owners throughout the City of Chicago, the test for exclusion under 5-12-020(a) is a two part test. As a result, if a condominium owner owns a single unit in a four unit condominium building but does not also reside in the building, that condominium is governed by the CRLTO. Similarly, a single family home in the City of Chicago that is leased out is also governed by the CRLTO. Many landlords are surprised to find that their tenancies are governed by the ordinance. Usually, when they find out, it is too late.
The remainder of the exclusions in 5-12-020(b)-(f) provide for exemptions for various hotels, hospitals, purchasers of real estate who allow a seller to retain temporary possession, employee housing, and co-op property occupied by the co-op shareholder under the proprietary lease. The exclusions are quite limited and specific, with many being defined elsewhere in the City of Chicago code.
Friday, January 25, 2008
Wednesday, January 9, 2008
Relief for Tenants when Landlord is Being Foreclosed
Effective January 1, 2008, the State of Illinois has enacted Public Act 095-0262 amending 735 ILCS 5/15-1701 of the Code of Civil Procedure to allow tenants a right of possession during a foreclosure. Under the old law, tenants could be evicted shortly after the entry of an order for possession in the foreclosure action.
Under the new law, in the case of a foreclosure where a tenant is current on his or her rent, an order for possession entered in a supplemental petition for possession in the foreclosure must allow the tenant to retain possession of the property covered by the tenant's rental agreement for the shorter of: (1) 120 days following the notice of the hearing that has been properly served upon the tenant or (2) through the duration of the tenant's lease.
As a result, tenants will have at least the balance of their lease if less than 4 months remain or up to 4 months after they receive notice that their landlord is in foreclosure. Tenants will still have to pay their rent. The law provides the additional right to possession only if the tenant continues to pay rent in full during the 120 day period. In addition, the right only extends to a case of "foreclosure where the tenant is current on his or her rent". This can lead to a few questions.
Who is entitled to rent during the pendancy of the foreclosure action? Is it the landlord, the mortgage holder foreclosing the loan, or the court appointed receiver? Generally, payment should be made to the landlord. However, many landlords in arrears refuse to accept rental payments. In such a case, the tenant should be careful to tender the rent payment to the landlord. If the payment is denied, the tenant should tender the rent payment to the court appointed receiver and/or mortgage holder. In either case, the tenant should get a receipt for payment! If neither the court appointed receiver/mortgage holder or the landlord will accept the rent, the tenant should appear in court and attmept to have the court order one of the parties to the suit to accept the rent.
Under the new law, in the case of a foreclosure where a tenant is current on his or her rent, an order for possession entered in a supplemental petition for possession in the foreclosure must allow the tenant to retain possession of the property covered by the tenant's rental agreement for the shorter of: (1) 120 days following the notice of the hearing that has been properly served upon the tenant or (2) through the duration of the tenant's lease.
As a result, tenants will have at least the balance of their lease if less than 4 months remain or up to 4 months after they receive notice that their landlord is in foreclosure. Tenants will still have to pay their rent. The law provides the additional right to possession only if the tenant continues to pay rent in full during the 120 day period. In addition, the right only extends to a case of "foreclosure where the tenant is current on his or her rent". This can lead to a few questions.
Who is entitled to rent during the pendancy of the foreclosure action? Is it the landlord, the mortgage holder foreclosing the loan, or the court appointed receiver? Generally, payment should be made to the landlord. However, many landlords in arrears refuse to accept rental payments. In such a case, the tenant should be careful to tender the rent payment to the landlord. If the payment is denied, the tenant should tender the rent payment to the court appointed receiver and/or mortgage holder. In either case, the tenant should get a receipt for payment! If neither the court appointed receiver/mortgage holder or the landlord will accept the rent, the tenant should appear in court and attmept to have the court order one of the parties to the suit to accept the rent.
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