On April 30, 2021, in Rivera v. Bank of New York Mellon et. al., 2021 IL App (1st) 192188, the Illinois Appellate Court held that the City of Chicago Ordinance commonly known as the “Keep Chicago Renting Ordinance” (“KCRO”) § 5-14-010 et. seq. was preempted by the Illinois Rent Control Preemption Act, (RCPA) 50 ILCS 825/1 et. seq. In that case, which Noonan & Lieberman handled on appeal, the Appellate Court held that the KCRO’s requirement that a new owner of foreclosed property must offer certain tenants a lease renewal or extension at no more than 102% of the current rent, or else pay a $10,600 relocation assistance fee, amounted to rent control in violation of the RCPA. By that decision the KCRO was declared dead– until yesterday.
On July 21, 2021, the City Council unanimously passed an ordinance repealing the original KCRO and replacing it with a new version, SO 2021-2791. The new version requires the owner who takes title to a property through a foreclosure, consent foreclosure, or deed in lieu to offer any “qualified tenant” a new lease or else pay that tenant $10,600 in relocation assistance. To avoid the rent control prohibition under the RCPA, the new version removes the requirement that any offer must be capped at 102% of fair market value.
More importantly, under the original version, it was the owner’s choice to offer a lease agreement or relocation assistance of $10,600. If the owner offered a lease extension or renewal and the tenant refused, the owner was relieved of the obligation to pay relocation assistance. The new version removes that choice from the landlord and places it in the tenant’s hands. Thus, if the tenant elects not to stay the owner must hand over $10,600.
There are other new requirements such as increasing the number of languages or written versions of a language in which the KCRO notice must be provided, from four to nine: Arabic, Chinese (simplified), Chinese (traditional), English, Filipino, Hindi, Korean, Polish, and Spanish. We are unaware of the implications of another change. Regarding the tenant’s obligation to return the Tenant Information Disclosure Form, the original version of section 5-14-040 (b) required that, “[n]o later than 21 days after receipt of the notice, the tenant shall complete and return the Tenant Information Disclosure Form to the person and address indicated on the Form.” The new Ordinance states that the tenant may complete and return the Form.
The new KCRO will go into effect upon passage and approval, which is anticipated to occur on July 23, 2021. The ordinance is not retroactive. Thus, any foreclosed property where title passed prior to the effective date of the new KCRO is not subject to the prior invalidated ordinance. A copy of the Ordinance as passed, is posted to the website. Please contact us with any questions.Download Related Document