UPDATE: A version of this law has passed the City Council. Today, May 20, 2020, Mayor Lightfoot has introduced a measure to radically change, dare I say, hundreds of years of common law and forty years of Chicago law with respect to the termination of a lease and/or a tenancy. These rules may be INSPIRED by Covid-19, but there is no indication that they will be repealed or removed once the threat of the Coronavirus is just a memory. The proposed ordinance will change the amount of advance notice landlords need to give to tenants to terminate a lease or tenancy and to introduce new requirements that landlords provide relocation assistance (a nice thing to call a payment) to tenants. Let’s take a dive into the proposed law.
UPDATE: Aldermen Byron Sigcho-Lopez, Rossana Rodriguez Sanchez, and Daniel La Spata have moved the Mayor’s ordinance to the rules committee (the Mayor still believes the law will pass in June) and are instead interested in pursuing their own “Just Cause for Eviction” ordinance (you know, the old law from Alderman Proco Joe Moreno that never got off the ground).
This amendment (click for text) will apply to ALL residential dwelling units in Chicago, including those tenancies that are NOT governed by the Chicago Residential Landlord and Tenant Ordinance. I can see why. There would be absolute mayhem among landlords and tenants in the understanding of what they could or could not do to renew a lease in Chicago if it did not apply city-wide.
Amendment to 5-12-130(j)
As it is written now, when a written lease is ending, CRLTO section 5-12-130(j) requires landlords to serve a 30-day written notice of the landlord’s intent not to renew the lease. If the landlord does not give notice at least 30 days prior to the termination, then the landlord must serve a 60 day notice. The new proposed version of 5-12-130(j) creates different rules depending on the length of a tenancy.
For residential tenancies of more than six months, the new rule would be that:
…the landlord shall notify the tenant in writing at least 90 days prior to the stated termination date of the rental agreement of the landlord’s intent either to terminate a periodic rental agreement or not to renew a fixed-term rental agreement. If the landlord fails to give the required written notice, the tenant may remain in the dwelling unit for up to 90 days after the date on which such required written notice is given to the tenant, regardless of the termination date specified in the notice or in an existing rental agreement. (proposed ordinance 5-12-130(j) in part)
So instead of a 30 day notice prior to the end of the lease term, the tenant will get a ninety day notice. Interestingly, it seems that a landlord will NOT get the opportunity to “lock up” a tenant for a new year prior to having to serve the required 90 day notice. Remember, Section 5-12-130(i) of the CRLTO provides that “no tenant shall be required to renew a rental agreement more than 90 days prior to the termination date of the rental agreement.” So, in practice, a landlord will probably have to serve a 90 day notice to each and every tenant because they can’t be sure if the tenant even intends to renew.
Keep in mind here that the way this is written, it appears to also apply to month-to-month tenancies after they have gone on for 30 days. My read of the proposal is that beginning on 6 months and one day, a month-to-month tenancy will require a 90 day notice to terminate. That’s a MAJOR change.
My readers know that I’ve always been critical of this provision (5-12-130(j)) of the ordinance. Frankly, I think the City Council doesn’t give tenants enough credit. I’m pretty sure that tenants around the state are able to easily and without problem read that portion of the top of the lease that says “End of Term” to inform them when their lease ends and then plan their lives accordingly.
Nonetheless, this change will require landlords, especially those looking to sell their buildings, to be “on their toes” about lease terminations. Too many landlords think that when a lease ends, it merely turns into a month-to-month tenancy. WRONG. Those leases that they think can be terminated on 30 days notice will NOW need a 90 day notice. That’s a long time and can mess with a planned sale or purchase transaction.
For residential tenancies of six months or less, the new rule would be quite like the old rule:
…the landlord shall notify the tenant in writing at least 30 days prior to the stated termination date of the rental agreement of the landlord’s intent either to terminate a periodic rental agreement or not to renew a fixed-term rental agreement. If the landlord fails to give the required written notice, the tenant may remain in the dwelling unit for up to 60 days after the date on which such required written notice is given to the tenant, regardless of the termination date specified in the notice or in an existing rental agreement. (proposed ordinance 5-12-130(j) in part)
So shorter tenancies will be entitled to the old protection of 30 days for proper notice or 90 days for late notice.
Finally, the proposed ordinance goes on to suggest that “For any residential tenancy, a material change to the terms and conditions of the tenancy (including, without limitation, the rental rate) shall be considered a termination or non-renewal of an existing rental agreement for the purposes of this section.” This provision is likely intended to change the 30 day notice requirement for a change in a month-to-month tenancy into a 90 day notice. This kind of change will require landlords to think with a heightened level of caution and planning about their rental activities and decision.
New Provision Requiring Relocation Assistance
The proposed ordinance adds section 5-12-135 to the ordinance. It is bad news for any landlord looking to “substantially” rehabilitate (defined as anything that requires pulling a permit or which is valued at more than $25,000) or demolish their dwelling unit within 90 days after a tenant vacates. In that circumstance, the landlord will need to make a “one-time” payment (per unit) of $2500 to assist a tenant with relocation. This rule does not prohibit a landlord from proceeding with a termination for nonpayment of rent. And – THUD – listen to the sound of the final shoe dropping on this one. In the event a landlord fails to comply with new 5-12-135, then the tenant will be entitled to two times the relocation fee plus attorney’s fees and costs.
Those are the high points and I’m not going to go into the nitty-gritty of the proposal until it passes. My readers can take a look at the proposed ordinance for more info. I will say, however, that the ordinance could be “drafted better”. For instance, Section 5-12-180 already provides that a tenant would be entitled to attorneys fees if they prevail in a case under 5-12-135, so the language adding in attorneys fees is superfluous and just makes the ordinance longer and more cumbersome to read. Legislation like the CRLTO should be concise, clear, and as short as possible to help people comply rather than getting bogged down with legalese. But, I think the inclusion of the language is instructive. It makes clear the City’s policies to provide tenants with the means, via threats of attorney’s fees, to beat landlords into submission without giving them the opportunity to fight in court because the threat of attorney’s fees is so strong.
One Situation is Exempt
The amendment will not apply to any existing rental agreement that expires within 90 days of the date of the passage of the new law. This will allow those landlords who have already served a notice (or who could not serve the required 90 day notice) an ability to terminate their existing leases without the need to extend a lease beyond the current end of a lease term. This is a reasonable and well thought out drafting decision.
Tenant’s rights advocates have been very critical of the mayor and this proposal. They want much more stringent and anti-landlord measures to be imposed (just cause for eviction, rent control, rent forgiveness, etc.). What we have here is a mayor who continues to work hard to find the middle ground. Does this miss the mark? I think some changes might be in order, but I’d rather work with the mayor on this kind of legislation than deal with some of the more radical proposals out there that actively hurt landlords.