Ordinance Would Postpone Rent Payments

Covid-19 Rent Relief at Landlord’s Expense Proposed

We have come into possession of an ordinance purported to be introduced to the Chicago City Council this week [UPDATE:that now appears to be introduced by Alderman Matt Martin] allowing Chicago tenants “affected by Covid-19” to stop paying rent for the duration of the Governor’s Stay at Home Order.  The proposed ordinance, which can be found by clicking here also provides that landlords cannot charge late fees upon any of the unpaid rent and would allow tenants a period of twelve months from the lifting of the Stay at Home order to repay the missed rent.  The ordinance also prohibits landlords from making access to any tenant occupied property.  If passed, the ordinance would apply retroactively to any rent that was missed beginning on march 18, 2020.

This kind of law will be a major blow to landlords.  I expect to break this down in more detail in the coming days, but I wanted to get this out to my blog readers asap.  If you are a Chicago landlord, you need to contact your Alderman and ward office AT ONCE to voice opposition to this law.

UPDATE:  When viewed closer, the law allows tenants who are “unable to pay rent during the stay at home order due to circumstances related to the novel coronavirus (COVID-19) pandemic” to defer that rent.  They get until 12 months after the lifting of the stay at home order to pay, without interest (weird in a City that makes landlords pay interest or suffer MAJOR penalties) and without late fee.  The law doesn’t say how or even if a landlord can verify that the tenant’s Covid-19 need is real or imagined.  And the trouble is, if a tenant failed to pay rent in March, April and May and then moved out in August, that tenant would owe three months rent in May 20201.  Could the landlord even find the tenant?  Would it be at all worth the landlord’s time and money to bring an action in the municipal court for a judgment against a tenant who is now long gone?  In reality, this is like giving a tenant free rent.

UPDATE: It is amazing to me that in the recitals they note that:

WHEREAS, The federal government has directed entities including Fannie Mae and Freddie Mac to provide mortgage forbearance of up to twelve (12) months to borrowers negatively affected by COVID-19. Property owners who are eligible to receive mortgage forbearance are often able to pass this saving down to their tenants in the form of reduced or deferred rents; and

They are absolutely right about this.  In fact, the federal CARES Act ALREADY PROHIBITS Fannie Mae and Freddie Mac borrowers who are getting forbearance from serving notices for nonpyament of rent, initiating evictions for nonpayment of rent, and enforcing late fee provisions.  This Chicago Ordinance goes WAY FURTHER beyond Fannie Mae and Freddie Mac and applies to even the smallest of landlords.

They go on in the recitals to say:

WHEREAS, Cities including Los Angeles, California, and San Francisco, California, have passed laws providing renters who have lost income as a result of COVID-19 with at least several months following the rescission of emergency orders to pay unpaid rent accrued during the emergency order; and

Remember when your mother asked you if all your friends would jump off of a cliff, would you???  Just because California did something that makes no sense does

About Richard Magnone

Co-founding member of Reda | Ciprian | Magnone, LLC, attorney at law and Illinois licensed lawyer since 1996.
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