Chicago: Rules on tenants who are MTM after expired lease

[Gillian C.]

Hi Chicago folks. Could you shed light on the following scenario:

- Tenant on a year-long lease that ended August.

- Tenant continued to pay rent September and November. 

- No new lease was signed.

Two questions (one for a friend who is a tenant in this situation, and one for me as landlord next time I'm in this situation):

1) How much notice if any does the tenant have to give the landlord notice of move-out? If there is a minimum notice, what are repercussions for moving out without this notice?

2) How long does a landlord have to give a tenant on an expired lease that has become MTM notice that they must move out? I thought this was 60 days but was recently told it increased to 90? If the tenant is on a signed MTM lease, is this notice period the same or different?

Thanks all!

[Forrest Faulconer]

If a lease has expired, but the tenant is still paying rent and the landlord accepts payment, that is a tenancy period to period. It typically requires one month's notice of either party to terminate. Chicago may be different than national standards which I cannot speak on, but one month is what I have seen across several states.

Forrest Faulconer

[Henry Lazerow]

If a lease expired you just need to give them 1 month notice to move out. Month to month are very common in chicago and the norm when my clients buy a mom and pop owned as-is type building. I always recommend being nice and giving 2 months or asking what a good time line is for the tenants. We have never had issues with this strategy but I work in the nicer neighborhoods (north side). When I bought my 4 unit I kept 3 tenants on month to month as we led up to the rehab start date. 

Note: There may be special rules with Covid. Check with a local attorney for those details. 

[Jason Dalka]

@Gillian C. The rules have actually just changed in Chicago and the amount of notice is now dependant on the length of tenancy. Here's a link to a good overview. https://www.thompsoncoburn.com/insights/publications/item/2020-07-23/what-landlords-need-to-know-about-chicago-s-fair-eviction-notice-ordinance

[Gillian C.]

Thanks all. The link from @Jason Dalka was exactly what I was looking for on the landlord side, thank you. 

I am still assuming that the tenant can leave whenever they want without penalty because there is no signed contract in place... I just read through the Landlord Tenant Ordinance and found nothing to suggest there was any recourse for the landlord in this scenario.  If anyone has any other thoughts on that, I'd love to hear them.

[Gillian C.]

Originally posted by @Henry Lazerow:

If a lease expired you just need to give them 1 month notice to move out. Month to month are very common in chicago and the norm when my clients buy a mom and pop owned as-is type building. I always recommend being nice and giving 2 months or asking what a good time line is for the tenants. We have never had issues with this strategy but I work in the nicer neighborhoods (north side). When I bought my 4 unit I kept 3 tenants on month to month as we led up to the rehab start date. 

Note: There may be special rules with Covid. Check with a local attorney for those details. 

Henry - check out the link for the updated rules so you don't get stung on this. Lots more notice required after ordinance passed this year, especially for long term tenants (if tenant has been there over 3 years, you need to provide 120 days notice for them to leave or to increase rent).

[Jonathan Klemm]

@Gillian C. - I see you read throught the CLTO but thats definitely the place to start.  Just in case here is link below:

https://www.chicago.gov/conten...

Also, I'd check what the current lease states.  I'd expect the notice you need is 30-60 days which is standard, but with COVID all rules are off, no evictions.

Maybe@Mark Ainley can chime in.

[John Warren]

@Gillian C. I am glad you looked up the new ordinance. There are a LOT of changes and all Chicago land lords need to be careful buying MTM buildings where they plan to move tenants out. 

[Tom Shallcross]

Below are also some relevant update from the Fair Notice Ordinance passed earlier this year:

• "For tenants who have been in the unit for more than three years, the landlord must notify the tenant in writing at least 120 days prior to seeking to terminate a tenancy, not renew a lease or increase the rental rate; failure to provide the notification entitles the tenant to remain in the unit for up to 120 days after the date on which written notice is ultimately given.
• For tenants who have been in a unit between six months and three years, the landlord must notify the tenant in writing at least 60 days prior to seeking to terminate a tenancy, not renew a lease or increase the rental rate; failure to provide the notification entitles the tenant to remain in the unit for up to 90 days after the date on which the written notice is ultimately given.
• For tenants who have been in a unit less than six months, the landlord must notify the tenant in writing at least 30 days prior to seeking to terminate a tenancy, not renew a lease or increase the rental rate; failure to provide the notification entitles the tenant to remain in the unit for up to 60 days after the date on which the written notice is ultimately given."

[Henry Lazerow]

Interesting thanks for sharing. Are these changes separate from RLTO and applicable to owner occupied under 6 units? "RLTO § 5-12-020(a) there is no RLTO coverage if the landlord BOTH lives in the building AND there are six or fewer units in the building."

[Sarita Scherpereel]

@Henry Lazerow You're correct the RLTO has dwelling unit listed on page one. For Henry, who lives in his four unit property in Roger's Park, he is not affected. Gillian, I'm not clear on this thread if you are house hacking (sorry if I missed that). For any house hackers that read this please see the following-

https://www.lplegal.com/conten...

"Ordinance's increased notice requirements do not apply to owner-occupied buildings containing six or fewer units" 

I don't know if this link will show up.file:///Users/saritascherpereel/Downloads/O2020-3501.pdf 
If not, y'all can find the 7 page RLTO at the Chicago.gov website.

Dwelling units by definition- 5-12-020 Exclusions

Rental of the following dwelling units shall not be governed by this chapter, unless the rental agreement thereof is created to avoid the application of this chapter:

(a)Dwelling units in owner-occupied building containing six units or less; provided, however, that the provisions of section 5-12-160 shall apply to every rented dwelling unit in such buildings within the City of Chicago.

(b) Dwelling units in hotels, motels, inns, tourist houses, rooming houses and boardinghouses, but only until such time as the dwelling unit has been occupied by a tenant for 32 or more continuous days and tenant pays a monthly rent, exclusive of any period of wrongful occupancy contrary to agreement with an owner. Notwithstanding the above, the prohibition against interruption of tenant occupancy set forth in Section 5-12-160 shall apply to every rented dwelling unit in such buildings within the City of Chicago. No landlord shall bring an action to recover possession of such unit, or avoid renting monthly in order to avoid the application of this chapter. Any willful attempt to avoid application of this chapter by an owner may be punishable by criminal or civil action.

(c)Housing accommodations in any hospital, convent, monastery, extended care facility, asylum or not-for-profit home for the aged, temporary overnight shelter, transitional shelter, or in a dormitory owned and operated by an elementary school, high school or institution of higher learning.

(d)A dwelling unit that is occupied by a purchaser pursuant to a real estate purchase contract prior to e transfer of title to such property to such purchaser, or by a seller of property pursuant to a real estate purchase contract subsequent to the transfer of title from such seller.

(e)A dwelling unit occupied by an employee of a landlord whose right to occupancy is conditional upon employment in or about the premises; and

(f) A dwelling unit in a cooperative occupied by a holder of a proprietary lease.

It clearly states in many articles that owner occupying a property with 6 units or less are not under these restrictions. However, always talk to an attorney about your specific scenario. 

[Gillian C.]

Originally posted by @Sarita Scherpereel:

@Henry Lazerow You're correct the RLTO has dwelling unit listed on page one. For Henry, who lives in his four unit property in Roger's Park, he is not affected. Gillian, I'm not clear on this thread if you are house hacking (sorry if I missed that). For any house hackers that read this please see the following-

https://www.lplegal.com/conten...

"Ordinance's increased notice requirements do not apply to owner-occupied buildings containing six or fewer units" 

I don't know if this link will show up.file:///Users/saritascherpereel/Downloads/O2020-3501.pdf 
If not, y'all can find the 7 page RLTO at the Chicago.gov website.

Dwelling units by definition- 5-12-020 Exclusions

Rental of the following dwelling units shall not be governed by this chapter, unless the rental agreement thereof is created to avoid the application of this chapter:

(a)Dwelling units in owner-occupied building containing six units or less; provided, however, that the provisions of section 5-12-160 shall apply to every rented dwelling unit in such buildings within the City of Chicago.

(b) Dwelling units in hotels, motels, inns, tourist houses, rooming houses and boardinghouses, but only until such time as the dwelling unit has been occupied by a tenant for 32 or more continuous days and tenant pays a monthly rent, exclusive of any period of wrongful occupancy contrary to agreement with an owner. Notwithstanding the above, the prohibition against interruption of tenant occupancy set forth in Section 5-12-160 shall apply to every rented dwelling unit in such buildings within the City of Chicago. No landlord shall bring an action to recover possession of such unit, or avoid renting monthly in order to avoid the application of this chapter. Any willful attempt to avoid application of this chapter by an owner may be punishable by criminal or civil action.

(c)Housing accommodations in any hospital, convent, monastery, extended care facility, asylum or not-for-profit home for the aged, temporary overnight shelter, transitional shelter, or in a dormitory owned and operated by an elementary school, high school or institution of higher learning.

(d)A dwelling unit that is occupied by a purchaser pursuant to a real estate purchase contract prior to e transfer of title to such property to such purchaser, or by a seller of property pursuant to a real estate purchase contract subsequent to the transfer of title from such seller.

(e)A dwelling unit occupied by an employee of a landlord whose right to occupancy is conditional upon employment in or about the premises; and

(f) A dwelling unit in a cooperative occupied by a holder of a proprietary lease.

It clearly states in many articles that owner occupying a property with 6 units or less are not under these restrictions. However, always talk to an attorney about your specific scenario. 

Sarita, thanks for clarifying re: living in the multi-unit, that's good to know.