Understanding Leases: Unenforceable Lease Terms under the Chicago RLTO

The Chicago Residential Landlord and Tenant Ordinance (RLTO) recognizes that landlords have superior bargaining power over tenants when it comes to negotiating rental housing. The RLTO prohibits landlords from enforcing certain clauses that they put in leases. A tenant may be able to recover actual damages sustained because of the enforcement of a prohibited provision. If the landlord attempts to enforce a prohibited provision, the tenant may recover two months’ rent as damages under the Ordinance.

For dwelling units located in the City of Chicago and covered by the Residential Landlord and Tenant Ordinance, the following types of lease clauses may not be enforced:

• Waiver Clauses: Any clause that WAIVES, or forgoes, the RIGHTS, remedies, or obligations of the Ordinance is unenforceable. For example, the landlord cannot waive his obligation to maintain the premises in compliance with the building code. Tenants can use the remedies provided in the Ordinance, such as repair and deduct, even if the lease says they cannot.
• Confession Clauses: Any clause that authorizes any person to CONFESS JUDGMENT on a claim arising out of the rental agreement is unenforceable. A confession of judgment clause allows the landlord to go into court, without notifying the tenant, and obtain a judgment for rent or possession against the tenant by showing the judge the lease clause in which the tenant “admits” that the landlord deserves to obtain the judgment. State law also renders such clauses null and void in consumer transactions.
• Liability Limitation Clauses: Any clause that LIMITS the legal LIABILITY of the landlord or Tenant is unenforceable. The landlord cannot limit his or her responsibility for injury or damage suffered by the tenant due to the landlord’s intentional or negligent actions. State law, as well as the Ordinance, prohibits landlords from using these clauses.
• Waiver of Proper Service Clauses: Any clause that waives the proper service of any written TERMINATION OF TENANCY NOTICE required by law is unenforceable. The law requires a written termination of tenancy notice to be served on the tenant in the proper manner before the landlord can begin an eviction lawsuit. A landlord cannot change any of these requirements with a clause in the lease. In apartments not covered by the Ordinance, the landlord can put in a clause that waives your right to the proper manner of termination as described in the Ordinance. However, if the landlord elects to give you notice, he or she must still follow legal requirements set out by state law.
• No Jury Trial Clauses: Any clause that WAIVES a person’s right to a way JURY TRIAL is unenforceable. Tenants must make their request for a jury trial – called a jury demand – on or before the date the court hears the case for the first time. If the tenant fails to do so, the tenant risks losing the right to a jury trial.
• Attorney’s Fees Payment Clause: Any clause that provides that the TENANT will PAY the landlord’s ATTORNEY’S FEES for a lawsuit arising out of the tenancy, except as provided by court rules, statute, or ordinance, is unenforceable. The ordinance only gives attorney fees to the prevailing plaintiff in lawsuits brought to enforce the rights and remedies protected by the ordinance.
• Unequal Cancellation Clauses: Any clause that permits either you or your landlord to CANCEL or TERMINATE the rental agreement at a DIFFERENT TIME or within a shorter period than the other party-unless you agree to it on a separate written document – is unenforceable. Under the Ordinance, a landlord may not enforce a lease clause that allows him or her to cancel the lease without giving the tenant the equal right to cancel. For example, landlords may not use a clause that allows them to terminate the lease upon the sale of property unless the give tenants the same right, or unless they disclose this clause in another written document that is clear and unconditional.
• Excess Late Fee Clauses: Any lease clause that authorizes the landlord to assess a LATE FEE or RENT DISCOUNT for early payment in EXCESS of the amount set by the Ordinance is unenforceable. The maximum late fee or discount for early payment is $10.00 per month for tenants who pay $500.00 or less in monthly rent. For those tenants who pay more than $500.00, the maximum late fee is $10.00 plus 5% for any amount of monthly rent in excess of $500.00. For example, a tenant who pays $600.00 in rent per month could be legally assessed a late fee of $15.00 per month: $10.00 for the first $500.00, plus 5% of the additional $100.00 or $5.00; $10.00 + 5.00 = $15.00.
• No Subletting Clauses: Under the Ordinance, any clause in your lease that does not allow you to sublet your apartment is unenforceable. Tenants have the right to rent out their apartments for part or all the remaining time on the lease. However, the subtenant must meet the same qualifications applicable to all tenants.