Understanding Foreclosure: A Chicago Tenant's Options to Stay or Leave
Because most renters are “qualified” or “bona fide” tenants, renters should be cautious if they are given letters or notices that say they must move out immediately based off a foreclosure. A new owner must follow the legal process to make a renter move from building after the date the foreclosure is final.
A tenant's options to stay or move depend on what type of lease they have when the building is sold to a new owner after foreclosure.
Written bona fide lease that has not expired:
- Under Illinois state and federal laws, a tenant who has a bona fide lease can live in the property until the lease is over.
- Exception #1: If the new owner plans to live in the property as their primary home, then the tenant cannot stay until the lease is done. The new owner still needs to give a 90-day notice to vacate.
- Exception #2: The new owner can start the eviction process after giving a 90-day notice to vacate near the end of the lease OR if the tenant fails to pay rent or violates the lease.
- Under Chicago law, a tenant must be offered a new 12-month lease OR $10,600 in relocation assistance.
Verbal month-to-month lease (after written lease expires or originally verbal lease):
- Under Illinois state and federal laws, a tenant can stay for 90 days after the new owner gives a 90-day notice. This is because the verbal month-to-month tenancy has no end date, so, there's no end date that a new owner would need to honor.
- Exception #1: The landlord can start the eviction process earlier if tenant fails to pay rent or violates the lease.
- Under Chicago law, a tenant must be offered a new 12-month lease or $10,600 in relocation assistance.
Not a bona fide lease:
- The new owner only needs to give a 30-day notice to vacate before they can start the eviction process.
- The tenant does not need to be offered a new 12-month lease or $10,600 in relocation assistance.
Note: If the tenant rents a property from a person who no longer owns the building, the tenant does not have a valid lease. The tenant does not get any of the protections for renters in foreclosure and may have been a victim of fraud. If so, the tenant can consider reporting it as a crime. Still, to evict a defrauded tenant, the actual owner must give notice and go to court to file an eviction case. The Sheriff is the only person who can physically evict a tenant.
The above article provides information about legal issues but is not the same as legal advice. Legal advice is when a lawyer applies the law to your specific situation. The information in this article does not replace the advice or representation of a licensed attorney. Law Center for Better Housing cannot guarantee the accuracy or completeness of the information in this article and is not responsible for any consequences that may result from using it. You should consult with a licensed attorney to ensure the information in this article is appropriate for your specific situation. Using the information in this article does not create a relationship between Law Center for Better Housing and you as your attorney.