Hello BP and Chicagoland Investors.
The cook county board of commissioners passed the Residential Tenant and Landlord Ordinance. I found the proposed document on ChicagoEviction.com-https://www.chicagoeviction.co...
I remember seeing the original back in July and I am thankful landlord advocates were able to get some concessions. However it is still overall skewed heavily in the tenants favor.
The biggest issues for me are
1. Late fees capped at 10 dollars for the first 1,000( was originally 1,500 I think) I’m all for preventing predatory fees, but 10 dollars is not fair.Definitely lowers incentive to pay on time.
2.Vague language as to what constitutes an “reasonable fee”. You can’t charge in excess of that.
3. One-time Right To Pay and Stay- Tenant can stop an eviction order by paying all back rent, filing fees, and all other cost EXCEPT attorney fees. Again not fair. Most landlords going to court spent weeks if not longer before making that decision. Hopefully judges are still allowed to make that call.
4. Limits on security deposits. Security deposits are limited to 1.5 times rent( the excess above 1 times can be paid over 6 months). This basically eliminates for me the ability to let people who are borderline on to my property.
What is better than original version
1. It seems as if landlords can still charge move in fees. However you have to provide a itemized statement of estimated reasonable costs. However you definitely might run into trouble if you miscalculate something.
2. A right to remedy to breach of the security deposit law. Landlords will get two days to remedy any violation after written notice from tenant. So unlike Chicago you won’t automatically get fined double the security deposit plus attorney fees (I think).
Tenants definitely deserve protection, and there are some justified provisions in the new ordinance. However there are ways to do it without being unfair to the landlord.
I disagree with a lot of the provisions in this ordinance. I am thankful that landlord advocates were able to get us some concessions and make this an easier deal with. Unfortunately this will have the unintended effects of making it harder for tenants who have blemishes on their record to find quality housing.
For me personally, the biggest change will be to not rent to anyone who is borderline to my criteria. I still use security deposits thanks to the right to cure provisions. But given the current climate and this new provision it really doesn’t pay to take unnecessary risk.
What impact, if any, will this have your business?
Nice post! I will definitely read the section on move in fee. Is move in fee limited?
Just like you said. Landlords will leave a unit empty before they put a marginal tenant in. And it will be even worse for those tenants that exploited the Covid protections. Legislators have essentially made finding a place to stay for borderline tenants nearly impossible. It’s also made the Sec 8 program that much more attractive to landlords.
@Connor O'Brien it didn’t specify but I imagine it would be around 1/2 of a month’s rent. Definitely seems like you will have to be careful what you charge for.
@Sean McKee you hit the nail on the head. The new ordinance does very little that is actually positive for tenants. I am personally very grateful that the security deposit provision retains the right to cure as I am a big fan of the security deposit. At 62 units and 6 years in the business I have still never withheld any deposit, but I find it to be a strong motivator for tenants to comply with the lease.
I did a series of videos with @Mark Ainley about this, but all lawmakers have actually done is made it impossible for us to take a chance on a tenant. If there was a cheap and expeditious way for me to remove a problem tenant then I would love to be the guy who gave people a second chance. With laws like this being passed, I will probably swing the opposite direction with more stringent minimum criteria to protect myself.