Understanding Local Protections During Foreclosure: Keep Chicago Renting Ordinance (KCRO)
The Keep Chicago Renting Ordinance (KCRO) is a law that protects Chicago tenants whose buildings are in foreclosure.
Who is covered and excluded?
The KCRO does not apply to the following:
- Buildings that went through foreclosure before July 21, 2021
- Any Bona Fide Third Party Purchaser
- A receiver who becomes owner through Receiver’s certificate
- Post-foreclosure owner who will occupy the rental unit as their principal residence
- A bona fide not-for-profit that is at least 5 years old and whose purpose is to provide financing for the purchase/rehabilitation of affordable housing
- Any tenant who was evicted for nonpayment of rent or lease violation (before the foreclosure)
What kind of protections are available for tenants?
After the building goes through foreclosure and it is sold to a new owner or a receiver is appointed, the new owner or receiver must:
- Give a dated written notice to all occupants and additional notices and protections for “qualified” renters.
- The notices must be in English, Spanish, Chinese, and Polish;
- Contain referral to 311
- Include disclosure of information form to obtain renter info
- Make written offer within 63 days after becoming the new owner to pay (1) $10,600 of relocation assistance or (2) good faith negotiated 12 month lease for a “qualified” renter
Who is a “qualified” renter?
Not all tenants and occupants of the buildings receive the protections listed above. The renter must fulfill all the following requirements:
- The tenant/occupant cannot be the former building's owner or the former owner’s child, parent, or spouse
- The lease must have been an "arms-length transaction"
- The rent cannot be substantially less than fair market value
What happens if the new owner violated the KCRO?
If the new owner or receiver fail to give the tenant either option (lease renewal or $10,600 relocation assistance), then the tenant can sue the new owner or receiver for statutory damages ($21,200) and attorney fees.
If a tenant believes that the new owner or receiver has violated the KCRO, they should consider reaching out to legal aid organizations like Law Center for Better Housing at their toll-free number 312-784-3507.