Understanding The “Keep Chicago Renting Ordinance” (KCRO)
by Adam Gurney, Managing Partner
When renters in the city of Chicago are living in properties lost to foreclosure, there are specific protections put in place for them under the "Keep Chicago Renting Ordinance ("KCRO")."
What is KCRO and how might it apply to you if you’re a tenant or owner?
Let’s take a closer look together so you fully understand the implications of this ordinance, no matter which side of the owner-tenant relationship you’re on.
First, the basics:
Also known as the Protecting Tenants in Foreclosed Rental Property Ordinance, the KCRO is intended to outline the communication and actions that need to take place between renters and new owners in a specific timeframe during the foreclosure process.
The KCRO requires the owner of a foreclosed rental property to perform one of two actions:
1) Offer a qualified tenant a renewal or extension of their rental agreement with a rent increase of no more than 2%
2) Pay the tenant a relocation fee of $10,600 within seven days of the qualified tenant vacating the unit
If the owner elects to offer a lease, the owner must continue to offer renewals or extensions (with rent increases of no more than 2% per year) until the owner sells the property to a "bona fide third-party purchaser."
In order to be considered a bona fide tenant for purposes of this Ordinance, you do not need a written lease agreement.
As a tenant, how will you know if you’re affected?
Under KCRO, a change in ownership must be provided by written notice to all occupants of a foreclosed property within 21 days of that individual becoming an owner or within 7 days of determining a tenant’s identity.
In addition to being mailed or delivered to each known tenant/household member, this notice must be posted on the primary entrance of each foreclosed property.
What the notice must include:
- Information about the foreclosure
- Change in ownership
- New owner
- Where to pay rent
- Who to request repairs from
- Tenants’ rights under the Ordinance1
Geographically speaking, where does this Ordinance apply?
The Chicago Municipal Code, which the KCRO is a part of, only applies in Chicago. Therefore, it does not apply to foreclosed properties outside of Chicago.
When you say “Owner,” does that mean I can sue my landlord under KCRO?
Not under KCRO. Landlords are not necessarily Owners as defined in the KCRO. An Owner is defined as the first person/entity that purchased the rental property after it went into foreclosure. There are instances in which the “Owner” and “Landlord “could be the same person, but not always. For example, a bank could be the purchaser of the foreclosed rental property and is therefore the “Owner” for purposes of the KCRO.
If the building you live in or have been living in was foreclosed upon during your tenancy, call Miles & Gurney at 312.929.0974 as you may have a cause of action against whoever purchased the building you live in or lived in.
We represent tenants who fall under this statute, either by ensuring they get their lease renewed for 1 year or by getting them $10,600 in relocation assistance. If the landlord fails to comply with the statute, we represent the tenant in court in an effort to get them their relocation assistance funds plus damages (2x $10,600 + costs and attorney fees).
Miles & Gurney also represents landlords who fall under KCRO (typically investors) to make sure they are in compliance with the statute.
Adam Gurney focuses primarily on real estate and business law. In real estate, Mr. Gurney has experience representing buyers and sellers, lessors and lessees, in all phases of real estate transactions. He also handles disputes arising under landlord-tenant law, condominium law, foreclosures, and disputes involving the Illinois Mechanics Lien Act.
In business, Mr. Gurney provides counsel to start-up businesses in formation and transactions such as the formation of LLCs, LLPs, and S-Corporations, and the structuring of partnership agreements, employment agreements, and business contracts of all sorts. Mr. Gurney remains directly involved in every case that he handles, and his clients know that they can reach him directly - day or night - whenever they need to.
1The Ordinance requires the notice about tenants’ rights under the Ordinance be given in English, Spanish, Polish and Chinese. The English language version of the notice is incorporated into the Ordinance, but translations were not. The Lawyers’ Committee for Better Housing (LCBH) has translated the notice and those translations may be used by owners to inform their tenants in accordance with the law.