On June 5, 2013, the City of Chicago's City Council passed an ordinance (the "Ordinance") that requires all purchasers of foreclosed rental properties in Chicago to either renew or extend each existing tenant's lease with annual rent increases not to exceed two percent (2%) or pay each existing tenant a relocation fee of $10,600.00 (per unit). All rental properties in Chicago, including single-family homes, condominiums that serve as rentals and multi-family buildings are subject to the Ordinance. The Ordinance will become effective on September 3, 2013.
Read MoreThe Ordinance applies to all parties to acquire foreclosed rental properties pursuant a judicial sale and mortgagees who accept a deed in lieu of foreclosure or consent foreclosure. The Ordinance mandates strict compliance with tenant notice and building registration requirements. Owners must make a good faith effort to ascertain the identities and addresses of the tenants and provide notice in English, Spanish, Polish and Chinese within 21 days of acquisition. Owners must also register the property with the City Commissioner and pay a $250 fee within 10 days from the date of acquisition. New owners are barred from collecting rent from a tenant until the required notices are delivered.
Non-compliance with the Ordinance will result in fines ranging from $500 to $1,000 per violation, which will accrue daily while such violation continues to exist. In addition, Tenants may be awarded damages equal to two times the relocation assistance fee as well as reimbursement of reasonable legal fees.