As I discussed just a few days back, we will take a closer look at rental regulations in the suburbs of Chicago. The newest addition to the mix is the Village of Buffalo Grove’s Residential Rental Housing Program which was passed near the end of 2012 and is now in effect starting as of January 1, 2013. Established under the auspices of protecting the community’s health, safety, and welfare (that’s the justification given by most “home rule communities” [as defined by Article 7 Section 6 of the Illinois Constitution] that enact these kind of laws), the new program seeks to set minimum housing standards, stabilize residential areas, keep up housing conditions, and maintain property values.
Those are all, of course, admirable and reasonable goals for any municipality. What members of a community or a community government would not be in favor of maintaining property values and housing standards? Well, the devil is in the details. How are those goals put into practice? Does the ordinance serve the people and promote its purposes or is it just a revenue generating money maker? How exactly will the Village of Buffalo Grove run its program?
I have been pretty critical of “crime free leasing programs” in the past. Some municipalities and the people who peddle these kinds of laws and who make money charging landlords for the mandatory training that usually comes along with them are really just out to make a buck under the cover of crime-prevention or some other lofty purported goal.
Well, Buffalo Grove is at least talking a good game. In a recent Chicago Tribune article, the Buffalo Grove deputy building commissioner indicated that “In the first year, we are giving [landlords] a little latitude for dates of registration” and the village manager noted that “[w]e don’t want it to be Draconian; we want to work with property owners.” I give credit to the municipality for phasing in the program. Many landlords won’t immediately be aware of the program’s existence. (Heck, there are still Chicago landlords who don’t know about the CRLTO!) Giving them a break here at the outset is reasonable.
Let’s break down the ordinance and see what it says. (By the way, this is a general summary. You should always be sure to read the actual text of this or any law firsthand to get a firm understanding of the law’s requirements). In general, the law is simple enough. As of January 1, 2013, it illegal for any person or entity to rent out a residential property in Buffalo Grove without a license and also illegal for any person to occupy an unlicensed property. The law requires landlords to have a license in order to rent out residential real estate. The license is even required when the unit is vacant and un-rented.
There are some exceptions to the law (these can be found in Section 15.36.40(D) of the Ordinance). The ordinance does not apply to:
- owner-occupied residences;
- residences occupied by a family member of the owner;
- vacant properties that are not intended to be rented;
- hotels and motels;
- buildings owned by the government or public housing authorities (after all, why should they have to comply with these pesky laws!);
- and nursing homes.
In order to get a license, a rental property owner will need to provide certain information to the Village including the legal name, address, and home and work phone number of each and every owner of the property (home and work, really?); for properties held in trust, the name, address, and work phone number of the trustee and each holder of a beneficial interest in the trust (so much for the privacy benefit of that trust!); the address of the rental property; the number of dwelling units in the property; the name, address, and phone number of any management company managing the property and the name, address, and phone number of the actual manager assigned to the property; and the name, address, and phone number of a responsible person available 24 hours a day in case of emergency who has authority to make repairs to the property. In addition, if there is any change in ownership or the managing agent. the owner has 30 days to file updated information with the Village. Does the Village know or even care how often a management company re-assigns managers?
There is, of course, an annual fee to be paid to the Village. A license is good for a year period beginning on January 1 and ending on December 31. Buffalo Grove will charge $75 per year for single family homes and $150 per year per building plus $30 per dwelling unit within a building for apartment complexes. Included with the annual fee, the landlord is entitled to two inspections (an initial inspection and, presumably, a re-inspection after the code compliance inspector find all the building code violations that they probably expect to find). Any additional inspections will cost the property owner an additional $50. Registering mid-way through the year will get a landlord a 50% discount on that year’s annual fee. Registering late will result in double the charges.
In addition to the application and annual fee, the ordinance imposes a few record-keeping and disclosure requirements. The landlord is required to maintain a copy of the full legal names of every tenant in the dwelling unit. These records must be made available to village inspectors if requested. Certainly, I don’t like the concept of additional record-keeping requirements, however, most landlords – especially most landlords who are renting the right way – are keeping and retaining regular records on their tenants and rentals. Additionally, the landlord must provide each tenant with the name and phone number “of a responsible person who, in emergency situations, will be available on a twenty-four-hour basis and who has the authority to make repairs as needed.” Landlords should probably consider placing this information in plain sight on the face of their lease or lease rider.
Once an application is filed and the annual fee paid, the Village will schedule an inspection of the rental property. At this point, the landlord is issued a “temporary license” and can rent out the property for occupancy. After the inspection, the Village will cite any code compliance issues and schedule a time frame for the landlord to make repairs. After the repairs are made, the landlord can have the property re-inspected (remember, that was part of the original licensing fee). During this time, the temporary license is still in force. After the repairs are done, the Village will either approve, conditionally approve for six months (if the repairs cannot be done because, for instance, it is winter), or deny the license.
The law can be violated in a number of ways. First, it is a violation on the part of the landlord to rent out an unlicensed property. Second, it is a violation on the part of the occupants to vacate an unlicensed property within 60 days after notice from the Village that the property is not licensed. Third, it is a violation if the landlord fails to get the tenants to vacate the property within sixty days after a license is revoked. This is interesting in that neither the Village nor the landlord will be able, following Cook County eviction procedures, to the tenants out within 60 days! It shows a laughable lack of knowledge of the Cook County eviction system to expect that a landlord could get this job done in 60 days. Fourth, it is a violation to maintain a rental property that is not in compliance with the Village building, maintenance, and zoning ordinances. Finally, it is a violation for any person to remove or deface a notice posted on the rental property regarding a violation of the ordinance.
Finally, the ordinance provides that any person or entity in violation with the ordinance can be punished according to the provisions of Chapter 1.08 of the municipal code and that each day during which a violation of this chapter continues or is permitted to exist shall be considered a separate
and distinct offense. Section 1.08 of the code provides that “any person violating any of the provisions or failing to comply with any of the mandatory requirements of any ordinance of the Village is guilty of a misdemeanor and except in cases where a different punishment is prescribed by any ordinance of the Village, any person convicted of a misdemeanor under the ordinances of the village shall be punished by a fine not to exceed five hundred dollars, or the entry of an order of supervision pursuant to Section 1005-6-1 of Chapter 38, Illinois Revised Statutes (1979) as may be amended from time to time.”
So, the ordinance does have some teeth when it comes to violations, although it does not seem to grant any private cause of action to the tenant for a violation. At the same time, it imposes the following burdens on a landlord:
- record keeping requirement;
- disclosure requirement;
- annual fees;
- mandatory inspections;
- mandatory repairs.
The municipality probably has a justifiable interest in keeping the condition of rental properties up to code. Then again, doesn’t Buffalo Grove already have the right to enforce its building and maintenance code? I’m pretty sure it does. I’m speculating, but the fees probably just cover the cost of administering the program and the inspections. The marginal utility of the disclosure and record keeping requirements are negligible. On the whole, the law is probably not so much a burden as it is unnecessary. Tenants who have problems with the condition of their rental property could just as easily call the Village to get an inspection and I would imagine that the code enforcement officer would cite the landlord for any violations. So, in the end, is this much ado about nothing? Yes and no. The law is not a game changer and there were probably already laws on the books to do what this law does only with less specificity. On the other hand, the law imposes real penalties on landlords (and tenants) who fail to comply, so landlord’s can’t disregard compliance.