CAA-Supported Judicial Discretion Ordinance Introduced

Below is a summary of the two new ordinances introduced at the March 18th City Council meeting. The first would allow for judicial discretion in cases involving security deposit violations, and the second amends the Keep Chicago Renting Ordinance, intended to provide protection for tenants in foreclosed properties. CAA’s Legislative Committee will review these initiatives at its next meeting on April 9th.

Residential Landlord & Tenant Ordinance (Alderman Reilly) Housing & Real Estate
This ordinance amends Chapter 5-12-080 of the Municipal Code to provide for judicial discretion in matters involving security deposit violations. The ordinance takes effect 10 days after passage and publication. This ordinance would change “shall” to “may” and provide for a Judge to determine the penalty to issue in a case involving security deposit violations. CAA has long advocated for this change.

Keep Chicago Renting (Alderman Suarez) Housing & Real Estate
This ordinance amends Chapter 5-14 of the Municipal Code to expand the definition of qualified tenant, require a notice to pay relocation assistance and to provide payments to non-lawful tenants. Specifically, it amends the definition of qualified tenant by changing the provisions by adding any child, spouse or parent of the mortgagor residing in the same dwelling unit with the mortgagor is not the tenant as a condition of whether the lease is bona fide. It requires the existing notice to tenants to include language advising that they can go to the website of Business Affairs and Consumer Protection for additional information regarding rights and obligations. It requires owners to provide with the required notice a Tenant Information Disclosure Form, prescribed by Business Affairs. It requires the tenant to complete the disclosure form within 21 days of receipt and return it to the address on the form. A tenant's failure to return the completed form does not negate the owner's obligation to either extend or renew the lease or provide a replacement unit or pay the relocation assistance fee. Within 21 days of the day the tenant returns or should have returned the form, the owner shall send a written notice the qualified tenant advising whether a relocation fee will be paid or an extension or renewal of the lease or replacement unit will be offered. The ordinance further provides that if a qualified tenant fails to accept a lease extension or renewal or a replacement unit within 21 days of the offer or, if the tenant qualifies for extended time, within 42 days of the offer, the owner is not obligated to grant the lease extension or renewal or provide a replacement unit. It would also require the owner of a unit that was not lawful under the city code to pay the one-time relocation fee of $10,600 to a qualified tenant unless the owner offers and the tenant accepts a lease extension or renewal with a rental rate that does not exceed 102% of the current rent or a replacement unit. The Business Affairs Commissioner is required to develop the Tenant Information Disclosure Form and a summary of a tenant's rights and obligations, which shall be posted on the department's website. The ordinance take effect 90 days after passage and publication.

With the addition of the Tenant Information Disclosure Form, this ordinance adds an additional 42-63 days to the process of terminating a tenancy after an owner purchases a foreclosed property. Often times during that period the tenant is not paying rent. It also requires an owner to pay a relocation fee of $10,600 or offer a replacement unit to a qualified tenant who occupies an illegal rental unit. The proponents contend these changes will reduce tenant confusion and increase lender compliance. Since this ordinance passed in 2013, there have been reports of non-compliance by lenders as well as the first owner who takes over a foreclosed property.