Chicago is a very large city, with a significant population of residents, businesses and rental properties. If you’re in the process of deciding to rent out your property, you must ensure that you comply with the city’s laws and ordinances governing what you (and your tenants) can and cannot do. It’s also important to understand that the rules applying to renters who choose to rent furnished apartments don’t necessarily apply to extended stay properties.
If you’re a residential landlord (you’re renting residential property to tenants), then you’re governed by the Chicago Residential Landlord Tenant Ordinance, or RLTO. This ordinance does not govern the following types of properties and situations:
- Owner-occupied buildings with six or fewer units
- Rooming houses, hotels and motels unless rent is monthly and occupancy is 32 days or more
- Employee quarters
- Dorms and shelters for students
- Nonresidential properties
- Owner-occupied condos
- Owner-occupied co-ops
If your property doesn’t fall into any of these groups, then you are covered by the RLTO.
Owners who choose to rent furnished apartments are required to respect tenant rights, including:
- Free from unreasonable access by the landlord – This simply means that you are not able to harass the tenant or enter the unit without a valid reason or proper notice.
- To have property reasonably maintained – It’s your responsibility as the owner to maintain and repair the property in a reasonable and timely manner.
- To live in a safe environment with “essential” services – This means that owners choosing to rent furnished apartments and other covered properties must provide an environment that doesn’t cause immediate danger to health or safety, and that you supply heat, hot water, running water, indoor plumbing, electricity and gas.
- Fair treatment for security deposits – The city of Chicago has very strict rules governing how and when landlords can access a tenant’s security deposit in order to prevent fraud and abuse.
- Right to vacate property – The tenant has a right to vacate the property if an apartment is destroyed “due to fire or another causality” that puts it in violation of the rental agreement.
- Disclosure of landlord or agent identity – Prior to or when a tenancy begins, tenants have the right to know the landlord’s (or the landlord’s agent’s) phone number, full name and address. This information must be kept current at all times.
- Foreclosure action notification – If a rental property falls into foreclosure, it is the landlord’s responsibility to inform all tenants and any third parties renting units within the property. This information must include key terms, including the case number, any statutory language, and the case name of the foreclosure action.
- Disclosure of habitability conditions – The landlord must disclose conditions that affect the habitability of the property before an initial lease is signed or prior to a lease’s renewal.
- Ability to sublease – The city of Chicago requires that landlords give their tenants the ability to sublease their properties. While the landlord can require that permission be obtained beforehand, that permission cannot be “unreasonably withheld”, and there can be no additional fees or charges added to the rent for subleasing.
- Unusable rental agreement terms – The city of Chicago actually bans property owners from using some very specific language in lease agreement terms, and considers them abusive and unenforceable. If a landlord includes these terms anyway and attempts to enforce them, those choosing to rent furnished apartments and other properties can recover actual damages. These terms are as follows:
- Agreements to waive rights remedies or obligations provided by the RLTO
- Authorization to confess judgment
- Agreements that limit the liability of the landlord or tenant
- Agreements to waive written termination notice or manner of service
- Agreements to waive trial by jury
- Agreements that a tenant will pay the landlord’s attorney’s fees except as provided by court rules, statute or ordinance
- Agreements that either party may cancel or terminate the lease in a shorter period of time than the other party unless disclosed in a separate notice
- Agreements for late fees in excess of the statutory maximum
- No retaliation from the landlord – Tenants are to be free from retaliation by the landlord unless they are in violation of the lease or a law. This includes decreasing services, terminating the agreement, increasing the rent or refusing to renew a lease, as well as several other key items.
These are only a few of the many rental laws and regulations that landlords in the Windy City must abide by. However, there are also numerous rules governing the actions of tenants and protecting the rights of property owners. As mentioned, the laws and regulations above do not apply to extended stay facilities and other properties listed in the exemptions section.