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Chicago Residential Landlord & Tenant Ordinance

Section 5-12-095 Tenants' notification of foreclosure action



(a)   Within seven (7) days of being served a foreclosure complaint, as defined in 735 ILCS 5/15-1504, an owner or landlord of a premises that is the subject of the foreclosure complaint shall disclose, in writing, to all tenants of the premises that a foreclosure action has been filed against the owner or landlord.  An owner or landlord shall also disclose, in writing, the notice of foreclosure to any other third party who has a consistent pattern and practice of paying rent to the owner or landlord on behalf of a tenant.


   Before a tenant initially enters into a rental agreement for a dwelling unit, the owner or landlord shall also disclose, in writing, that he is named in a foreclosure complaint.


   The written disclosure shall include the court in which the foreclosure action is pending, the case name, and case number and shall include the following language:


      “This is not a notice to vacate the premise.  This notice does not mean ownership of the building has changed.  All tenants are still responsible for payment of rent and other obligations under the rental agreement.  The owner or landlord is still responsible for their obligations under the rental agreement.  You shall receive additional notice if there is a change in owner.”


   (b)   If the owner or landlord fails to comply with this section, the tenant may terminate the rental agreement by written notice.  The written notice shall specify the date of termination no later than thirty (30) days from the date of the written notice.  In addition, if a tenant in a civil legal proceeding against an owner or landlord establishes that a violation of this section has occurred, he shall be entitled to recover Two Hundred and no/100 Dollars ($200.00) in damages, in addition to any other damages or remedies that the tenant may also be entitled.




  Landlords are still getting foreclosed on all over these days, even in 2015.  This section, RLTO 5-12-095, was enacted in the wake of the biggest foreclosure snowball yet, in 2008.  It requires a landlord to disclose any pending foreclosure before taking any money or making a lease.  If they violate this rule, the penalty is $200.00.  Because most landlords do not know about this rule, and because $200.00 is the least of their worries if they are in foreclosure, most landlords do not abide by this rule.    


    Therefore, the wise tenant must check for themselves to see if there is a foreclosure pending against their property before giving any money, or signing a lease.  This is tedious, especially for condo units where there is more than a bank to worry about (the condo association might evict the owner for being behind on paying assessments, even if the mortgage is in good standing). 


    Having the landlord's foreclosure or eviction status checked out before giving up money may be inconvenient but is probably better than losing a deposit and first month's rent.  Getting money back from landlords of dubious solvency is not likely. 


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