Banks forced to pay Renter $10,600 if their Landlord is in foreclosure

Banks forced to pay Renter $10,600 if their Landlord is in foreclosure

LANDLORD IS IN FORECLOSURE

LANDLORD IS IN FORECLOSURE

Understanding the Keep Chicago Renting Ordinance (KCRO) Introduction Due to the serious impact of the mortgage foreclosure crisis on renters, the City of Chicago passed an ordinance formally known as the Protecting Tenants in Foreclosed Rental Property Ordinance. This is more commonly known as the Keep Chicago Renting Ordinance (KCRO). This law was passed in September of 2013 and only applies to properties within the city of Chicago. Tenant Protections The KCRO requires the new owner of a foreclosed rental property to either: (1) offer bona-fide tenants a renewal or extension of their lease with a rent increase of no more that 2% or (2) pay the bona-fide tenants a relocation fee of $10,600 within 7 days of them leaving the property.

Tenants must be notified in writing within 21 days of a change in ownership of their property. The notice must contain information about the foreclosure, the identity of the new owner, and provide information about how to make future rental payments or obtain maintenance information. Until this notice has been properly sent to the tenants, the new owner does not have the right to collect rent or terminate an existing lease for failure to pay rent. Tenant Requirements As part of the information sent to the tenants, there should be a form asking the tenants to identify themselves and provide information about the property. In many cases, the new owner may not have updated information about who is living there or what condition the property is in. Completion of this form can allow tenants to establish their identity and assert their rights under the KCRO. If the new owner does not receive any response back from the tenants, they may act as if the offer has been rejected and tenants could lose their rights under the KCRO. Thus, it is very important to return the forms and make sure that the new owner has received all appropriate information.

Within 21 days of receiving a completed form back from the tenants, the new owner must decide which of the two options it will offer. The tenants then have another 21 days to decide if they will accept the offer. It is important to note that in order to qualify for protection under the KCRO, the tenants must have a valid lease and the it must be an “arm’s length.” Agreement. This means that the lease cannot be made among close family members, such as parents and children or siblings. The lease rate must also be for fair market value in order to be considered valid. Conclusion The KCRO is a very valuable safeguard for tenants who find themselves living in a foreclosed property. Failure to follow the law can lead to damages against the new owner in amount of twice the relocation fee ($21,200), as well as attorneys’ fees.

Due to the time-sensitive nature of the protections, as well as the often complex nature of the legal process, it is important for tenants to contact an experienced attorney as soon as they find out their property has gone into foreclosure. This will allow them the best chance of getting all the benefits they are entitled to under the KCRO.

Leave a Reply

Your email address will not be published. Required fields are marked *


Free Case Analysis