June 18, 2020 Landlord Advice

Chicago Passes New COVID-19 Eviction Protection Ordinance

The Chicago City Council approved an ordinance that protects tenants facing eviction on Wednesday, June 17, 2020. Mayor Lightfoot’s introduction of the COVID-19 Eviction Protection Ordinance includes more stringent requirements for Chicago landlords who file new eviction cases when their tenants fail to pay rent because of economic fallout from the Coronavirus pandemic. The ordinance requires landlords to make “good faith” efforts to resolve non-payment disputes with tenants, such as establishing communication and allowing a seven-day grace period before proceeding with eviction cases.  
  
The ordinance applies to ALL dwellings within the city, so in that sense it covers a broader swath of housing than even the Chicago Residential Landlord Tenant Ordinance. The ordinance will apply to any pending eviction cases that were filed from the date Illinois Governor J.B. Pritzker signed an executive order halting evictions on March 21, 2020 and covers eviction cases filed during the first 60 days after the state’s eviction courts reopen. Governor Pritzker’s statewide eviction moratorium is scheduled to expire on July 26, 2020. 
  

Extended Grace Periods Called for in New Ordinance 
  

The extended grace period, referred to as a “cooling-off” period, would come in addition to the standard five-day notice that Chicago landlords need to serve to tenants when they start the eviction process. The seven-day extension is triggered when tenants serve landlords with the "Tenant Notice" in response to receipt of the standard five-day notice. This basically amounts to tenants saying, "Not so fast, I can prove that my non-payment is a direct result of COVID-19 hardship." 
  
This cooling-off period aims to foster communication between landlords and tenants who are delinquent in rent payment. Housing officials want landlords to use this added time for negotiating repayment plans with tenants or sending their disputes to third-party mediation.  
  
“With or without this ordinance, folks are going to be taking on the expense of evicting people regardless,” said Chicago Housing Department Commissioner Marisa Novara. “What this does is to say let’s add seven days to try to entice people to come to a deal, and if they cannot, then the same circumstances apply as applied seven days before,” Novara said. 
  

What Can Landlords Do with the Seven Day Extension Period? 
  

Elected officials are asking landlords to open lines of communication with tenants who are struggling to pay rent in this extended cooling-off period. Landlords can ask for documentation if renters say they can’t pay rent due to Coronavirus-related issues. Proof of financial hardship may look like layoff notices, paychecks that show loss of wages or reduced income, and even text messages between renters and their bosses. 
  
Landlords are encouraged to work with tenants and come up with mutually agreeable repayment plans. Some of these methods were covered in a previous post about how landlords can respond to renters asking to delay or skip rent payments
  
Landlords have several tools at their disposal when it comes to setting up repayment plans. A landlord could apply a tenant’s security deposit toward any portion of unpaid rent, and any landlord who pursues this method should document the justification for the deduction and inform the tenant in writing. Landlords could also ask their tenant to sign a lease amendment that agrees to defer collection of the next month's rent and obligates the tenant to pay it in equal parts in the following months; for example, if the monthly rent is $1,000, then the rent due July 1 would be $0 and the amount due at the start of August and September is $1,500.  
  

If Negotiations on Rent Repayment Fail, What Next? 
  

The COVID-19 Eviction Protection Ordinance only applies to tenants who are served with eviction notice after they fail to pay rent. It does not apply to any other material breach of the lease agreement. It also doesn't excuse a tenant's responsibility to pay outstanding rent balances.  
  
Landlords who proceed with eviction filings over unpaid rent will need to prove to the judge in eviction court that they entered good faith negotiations with their tenants about repayment plans or mediation efforts. The City of Chicago is partnering with the Center for Conflict Resolution (CCR) to intercede in mediations between landlords and tenants. The end goal is reducing the overall number of evictions related to post-pandemic economic turmoil in Chicago. 
  
Landlords should keep in mind that the eviction process may not move forward if landlords have showed a willingness to accept late payments in the past. Accepting a partial payment will require that the landlord back out of the eviction process and start anew with a fresh five-day notice and a letter requesting “strict compliance” with payment deadlines. Read more about the ins and outs of eviction filings with Domu’s guide to the Chicago evictions process
  
Domu reminds you that it is not a lawyer or a substitute for one and is not purporting to provide legal advice here or anywhere.