Renting in a Foreclosed Chicago Building: Your Rights Under the Keep Chicago Renting Ordinance

You pay your rent on time. You have done everything right. Then a notice shows up saying your building has been foreclosed, and suddenly a bank or an investor you have never heard of owns the place you live. Many tenants assume they have to pack up and leave. In Chicago, that is often not the case. The Keep Chicago Renting Ordinance gives many renters in foreclosed buildings real protections.

What the ordinance does

The Keep Chicago Renting Ordinance applies when a lender or other owner takes title to a rental property in Chicago through foreclosure. In general, the new owner has two choices when it comes to a qualified tenant:

1. Offer to renew or extend your lease at an annual rent that generally cannot exceed 102% of your current annual rent, or
2. Pay you a one-time relocation assistance payment of $10,600.

In other words, the new owner generally cannot simply push qualified tenants out after buying at a foreclosure sale. They either keep you on at close to your current rent or compensate you for having to move.

Are you a "qualified tenant"?

The protections generally apply to tenants who were living in the unit under a bona fide lease or rental arrangement when the new owner took over. The details matter, but in most cases:

• You must be a genuine renter, not the former owner or the owner's close family member.
• The rental arrangement should be an arm's-length one, with rent that is not far below market.
• You may be covered even if you have a month-to-month arrangement or an expired lease.

If you are not sure whether you qualify, gather whatever proof you have that you live there and pay rent: a lease, rent receipts, canceled checks, bank or payment app records, utility bills, and mail addressed to you at the unit.

What the new owner generally has to do

Owners who take over foreclosed buildings in Chicago generally have obligations beyond the lease-or-pay choice. These can include notifying tenants of the change in ownership and who to contact, and maintaining the building, including heat, water, and basic repairs. A change in ownership does not suspend the city's building and housing codes.

What about federal protections?

Federal law has also provided protections for tenants in foreclosed properties, generally including a right to advance notice before being required to move. The Keep Chicago Renting Ordinance generally goes further for Chicago tenants, but both may be relevant depending on your situation.

Common traps to watch for

• "Cash for keys" offers below what you may be owed. Some owners offer tenants a small payment to move out quickly. Before you sign, find out whether you may be entitled to more under the ordinance.
• Pressure to leave right away. A notice that you must leave in a few days is not the same as a court order. In Illinois, a landlord generally needs to go through the eviction process in court to remove a tenant.
• Utility shutoffs or lockouts. Cutting off services or changing locks to force a tenant out is generally illegal in Chicago.
• Not knowing where to pay rent. Keep paying, or set the rent aside, and keep careful records. Ask in writing who the new owner or manager is.

What you can do now

Keep copies of every notice you receive, write down the dates, and do not sign any agreement to move out until you understand your rights. If a new owner has offered you money, compare it to what the ordinance may require. You can read more on our Tenants in Foreclosure page.

You have more rights than you might think

This article is general information, not legal advice, and the ordinance has specific definitions and exceptions that can affect your situation. If your building has been foreclosed or a new owner is asking you to leave, contact us for a free case review. We can help you understand whether you may qualify and what to do next.