Over the summer, we told you about the Keep Chicago Renting ordinance that was designed to provide certain protections for Chicago renters living in foreclosed properties. As of late last month, those protections have now taken effect, according to an article in the Chicago Tribune. As you may remember, the ordinance will “offer additional protections, including funds to offset relocation costs, to tenants in foreclosed rental buildings in the city.”
Are you a renter who is concerned about losing your residence to foreclosure? Or are you a property owner worrying that your real estate investment may be at risk of foreclosure? The experienced foreclosure defense attorneys at the Emerson Law Firm have extensive knowledge about foreclosure practices in Illinois, and they can speak to you about your case today.
What Does the Ordinance Do, Again?
Given that the Keep Chicago Renting ordinance has just taken effect, we thought it might be a good idea to give you a refresher on its key points. In short, there are two important features of the ordinance that are supposed to have a positive effect on renters across the city:
· Rent-controlled leases: the ordinance will require most buyers (whether it’s a business entity or an individual investor) who take possession of foreclosed rental properties to offer rent-controlled leases to legitimate tenants who currently reside in the building. And according to the ordinance, these rent-controlled leases will have to be valid for as long as they’re owners of the rental property.
· Relocation assistance: if buyers of the foreclosed property aren’t willing to (or can’t, for whatever reason) offer a rent-controlled lease to current legitimate tenants, then the ordinance requires them to provide a relocation expense to current tenants. And the relocation expense is no small matter: the ordinance entitles each unit containing legitimate residents to $10,600, and any portions of their unpaid rent can simply be deducted from this relocation payment.
Who will the ordinance apply to? According to the Chicago Tribune, “the rules apply to any rental unit, including single-family homes.” As such, the ordinance is likely to affect lenders who repossess these properties at the very end of the foreclosure process: “Lenders who allow tenants to remain in the buildings must offer them leases with annual rent increases of no more than 2 percent. The requirements would continue until the building is sold to a third party.”
What Do Residents and Advocates Have to Say?
After the ordinance took effect, many local residents and consumer advocates praised the ordinance and the positive effects it’s likely to have across the city. According to John McDermott, the Housing and Land Use Director for the Logan Square Neighborhood Association, the “ordinance is expected to protect 10,000 families per year.” McDermott emphasized how “every month, 725 rental units in Chicago are taken over by banks at foreclosure auctions,” which usually spells trouble for families who have been renters in those buildings.
Others echoed McDermott’s praise of the ordinance. For example, Diane Limas, leader of the Albany Park Neighborhood Council, spoke to a crowd of people after the ordinance took effect, saying, “[t]his is a great day” as she reminded others of the role the Albany Park Neighborhood Council had in bringing “awareness to what was happening to renters when the buildings they were living in went into foreclosure.”
Indeed, Patricia Fron of the Lawyers’ Committee for Better Housing made clear that the ordinance is likely to do exactly what it was intended to do—keep renters in their homes. Speaking about the ordinance, she said, “this places serious burdens on rentals and doubled-up situations, as well as charity and municipal services.”
Now, consumer advocates want to make sure that the ordinance is enforced. If you have questions about how the Keep Chicago Renting ordinance will affect you, don’t hesitate to contact the experienced real estate attorneys at the Emerson Law Firm today.
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