Big week for new legislation at City Hall?
We’ve heard that in addition to the Covid-inspired rent forgiveness statute proposed by Rep. Ramirez (and a similar provision likely to be proposed in the Illinois Senate), it is likely that there will be a bit more movement in the City Council this week. One of the complaints of city aldermen about the Chicago Housing Solidarity Pledge is that the pledge is… voluntary. We can’t just have landlords being nice all on their own, can we? Instead, apparently, we need to replace voluntary landlord solidarity with the Chicago Housing Solidarity Mandate.
The laws
There are rumblings that Alderman Byron Sigcho-Lopez of the 25th ward will be resurrecting the long dead corpse of former Alderman Proco Joe Moreno’s “Good Cause For Eviction” ordinance. If I were a betting man, I would guess that this ill-fated ordinance will not go anywhere (except maybe to the rules committee). It is just too blatantly anti-landlord. It also contains provisions that likely violate the Illinois Rent Control Preemption Act. I’m not worried about this one.
More likely to get broad support are a few concepts expected to be proposed by Mayor Lightfoot.
(UPDATE 5/20/20: The first and third proposal listed below have been proposed to the City Council by the Mayor today. Please see the linked article for more information)
(UPDATE 6/15/20: The Mayor has now proposed the second proposal below. Please see the linked article for more information)
First, the Mayor is allegedly promoting a “Fair Term for Renewals” ordinance. The rules embodied in 5-12-130(j) for non-renewal of an expiring lease which require 30 days advance notice or law for terminating a month-t0-month tenancy with a landlord’s thirty (30) days notice would be amended to increase the advance notice time from thirty (30) days to ninety (90) days. The law is said to contain some “Good Cause” language as well. Apparently, in the event that the landlord’s lease/tenancy termination is motivated by the landlord’s plans to demolish or rehab a property, the landlord will have to pay a housing relocation assistance fee (the number I heard was $2500).
Second, the Mayor is likely to propose some additional eviction protection for tenants who cannot pay their rent as a result of the pandemic. Once the state, county and federal eviction moratoriums expire, landlords will be able to file evictions for nonpayment of rent (I imagine that there will be lots of cases to file). Similar to laws governing the purchase of firearms, the proposed law would require a “cooling off period” after a five day notice expires (wait, I thought the five days after service of the notice was the cooling off period!?!). A landlord who serves a five day notice would have to wait during a cooling off period of seven (7) additional days before an Eviction case could be filed.
During the cooling off period, landlords would be required to make a “good-faith effort” to resolve the tenant’s non-payment situation and cannot bring an eviction unless they do. It has been suggested that a good faith effort would mean going to mediation, applying a security deposit to unpaid rent, or offering the tenant a payment plan. Forced grace. What about tenants who are not affected by Covid-19 who just decide not to pay? Additionally, the records for any Covid-19 related eviction would be sealed so other landlords would be unaware of the eviction in the future.
Third, we are hearing that the City is close to proposing an ordinance that would make in-law and coach house units “legal”. After the City has waged war on in-law and “illegal” units for over a decade, someone at City Hall finally figured out where all the affordable housing has gone. I think advocates on both the landlord and tenant side of things will LOVE and universally approve of this one.
(UPDATE 5/20/20: The Mayor also sponsored an amendment to the rules regarding coach houses and inlaw apartments which can be found on the City’s legislative website)
The Fallout
The “Fair Term for Renewals” isn’t all bad. The relocation fee is a bit ridiculous, but at least it is not the pumped up, silly $10,600 number that was developed as a way to punish banks in the Keep Chicago Renting Ordinance in the wake of the foreclosure crisis.
As for the second proposal from the Mayor, this may not be the best way to get the system back up to speed. It does force landlords and tenants to talk, so that’s not bad. Right now, I can only imagine the massive delays in the system once we “open up”. There are already eviction cases in the system that date back to December and January (and earlier). There are even more that will be filed once there is an opportunity. Supposedly, the 7 day cooling off period will apply to evictions already filed and notices already served. Will those cases need to be dismissed and re-filed? Oh my word! You can’t be serious.
Penalties?
Politicians have thought quite a bit about what lenders and landlords must do. There is way less talk about what TENANTS must do. The Governor’s order makes clear that tenants should pay their rent. The Mayor, at her Housing Solidarity press conference, reiterated that tenants who can pay should pay. But, you know what, it seems to me that the same problem that nags at the Alderman – the fact that the Housing Solidarity Pledge is voluntary – seems to plague all of these legislative efforts at Covid-19 relief. There are NO PENALTIES for tenants who CAN PAY BUT CHOOSE NOT TO PAY (rent strikers, I’m looking at you).
Take the seven day cooling off period, for instance. If, because I can’t really figure out if a tenant is a financial victim of Covid-19 or not, I enter into a deal with my tenant to allow them to repay the rent over a few extra months and then they don’t honor their agreement, what is my recourse? Eviction. A stinking eviction. I guess it is to serve a new five day notice (and another 7 day cooling off period?) and then slog through the expensive, uncertain, lengthy, and inefficient eviction process. Months later, I can get a money judgment that is worth next to nothing and an Eviction Order that the Sheriff will not rush to enforce. That’s it. How about this? What if a tenant who violates a landlord workout is subject to paying attorney’s fees and triple damages? Blasphemy you say? Why is that remedy “just” when applied against a landlord but not “just” against a tenant? Here’s a radical thought – how about a shortened or expedited eviction process for tenants who are given some grace and who give back none? What if a tenant lies about Covid-19 hardship and a landlord can prove that there was none. Could we put that tenant on a list of bad tenants and publish it like the City of Chicago publishes the bad landlord list? (Yep, that’s a real thing) Tenants have no skin in the game here and yet, they get every consideration under the sun.
Please, don’t misunderstand me. Landlords can and should be giving grace. It makes business sense to do so and, it is the “right” thing to do. I can even see where some temporary measures might be justified in this moment of crisis. However, the landlord rights attorney in me can easily project how the least deserving tenants will bend and twist these laws so that they can sit in their rental property even longer and for free.
It is my extreme hope that the City Council will not abandon the landlords and that they will be mindful of the fact that the landlords are people, just like the tenants, who rely on rent payments to keep their building and business alive and to feed their families. It would be nice if a new law didn’t totally cut the landlord at the knees for once.