You may have the right to be offered:
- An extension or renewal of your lease (oral or written) OR be given $10,600 in relocation assistance, or
- A replacement unit, if you are living in an “unlawful conversion” or an “unlawfully hazardous unit” in very bad condition.
You also have to:
- Continue to pay your rent, and
- Respond to the new owner’s offer to renew or extend your lease, or to provide the relocation assistance if you are a “qualified tenant.”
To be a qualified tenant, all of the following must be true:
- You were living in the foreclosed property as your primary residence on the day the new owner took the property in foreclosure.
- You are not the previous owner, or the child, spouse, or parent of the previous owner.
- Your rental agreement must be agreed to in a fair way.
- Your rent is not much below rent charged for other units around you (do not count housing vouchers).
Beware of claims saying that you are not a qualified tenant. If a new owner tells you that your rent is too low or you are otherwise not a qualified tenant, you should speak with an attorney. Most renters are qualified tenants.
Repairs and utilities
During the foreclosure process, your landlord has to maintain your building. If the court appoints a Receiver, or a temporary manager, then the Receiver has to maintain your building.
If your building is not being maintained, or your utilities such as gas, electric, or water, are shut off, talk with your landlord, or the Receiver, first. If problems still aren’t addressed, call Chicago City Services at 311. The City can make your owner make repairs.
Lease extension or relocation assistance
After foreclosure, qualified tenants can get:
- An offer to extend/renew an existing oral or written rental agreement, or
- $10,600 in relocation assistance.
The new owner chooses which option to offer. If you are offered a rental agreement extension or renewal, your rent amount can only be increased a small amount each year. This amount cannot be more than 2%. You can still be evicted for other reasons, like not paying rent or breaking other lease rules.
If the new owner does not extend or renew your rental agreement, they have to give you $10,600 per unit within 7 days of moving out. This is in addition to any deposits, refunds, or other money that you get. Money can be taken out for rent owed to the new owner. But new owners can collect rent only after they have first served the proper notice.
You will receive a "Tenant Information Disclosure Form" from the new owner. This will ask you for basic information.
Some units are in such bad condition that they are considered “unlawfully hazardous” or are an “unlawful conversion.” In that case, your lease cannot be renewed. The new owner may offer you a replacement unit at no more than 2% more than what you were paying the previous year. If you choose not to accept a replacement unit, the new owner must pay you $10,600.
The law is specific about which units are “unlawfully hazardous” or an “unlawful conversion.” Speak to an attorney if you have questions about your particular unit.
Timeline after foreclosure for qualified Chicago renters
It is very important to communicate with the new owner. You can lose your rights if you do not respond to them.
Within 21 days after taking over the property, the new owner must give a notice to all tenants about the new owner’s option to renew or pay relocation assistance. This Notice must be in four languages: English, Spanish, Chinese, and Polish.
The owner must also give the tenants a “Tenant Information Disclosure Form.” You should send back the completed “Tenant Information Disclosure Form” to the new owner within 21 days of receiving it. The owner then has 21 days to decide whether they will renew or extend your rental agreement, or offer the relocation assistance.
If you do not return the form, the new owner must still provide you with the offer within 42 days. Still, you should fill out the form. It may create a better working relationship between you and the new owner, especially if you stay in the property for any length of time.
Once the new owner has given you an offer to renew or extend your lease, you then have 21 days to either accept or reject the offer. If you do not respond, the new owner does not have to extend or renew the lease. They also do not have to provide you with the relocation assistance if they ask you to leave.
If the new owner doesn't offer you a lease extension/renewal or doesn't pay relocation assistance, you have the right to sue. You can sue for two times the relocation assistance, or $21,200. If you hire an attorney, the new owner has to pay for that too.
These protections continue until the property is sold to someone who isn't related to the new owner. Protections do not apply if the owner is one of the following:
- A Receiver (temporary manager) appointed by the court,
- An owner who will live in the property as their home, or
- A not-for-profit that is providing financing for the purchase or re-building of affordable housing.
Notice of your rights
Chicago’s law requires owners to give written notice to all tenants about relocation assistance or a lease extension/renewal. They also have to give notice about the right to sue if the new owner doesn't follow the law.
For qualified tenants
Most new owners should be offering you a lease extension/renewal or relocation assistance. If you get a notice from the new owner that tells you to move out, please speak with an attorney or contact the Lawyers’ Committee for Better Housing Tenant in Foreclosure helpline at 312-784-3507.
If you are not a qualified tenant
You still have to get a written notice. The length of the notice may be shorter than 90 days. If you receive any notice that tells you to move out in less than 90 days, please speak with an attorney or contact the Lawyers’ Committee for Better Housing Tenant in Foreclosure helpline at 312-784-3507.
Sometimes the new owner may not have to follow this ordinance. You should speak to a lawyer if the new owner claims that this law does not apply.
Updated: January 2018