1 Landlord s Legal Guide to Renting in Illinois TRISTAN & CERVANTES 30 W. MONROE STREET, SUITE 630 CHICAGO, IL
2 Welcome to Tristan & Cervantes Tristan & Cervantes offers clients comprehensive legal services in business and litigation. The firm practices the following areas of law: Business Transactions and Business Litigation Construction Law Labor and Employment Law Corporate Formation and Transactions; and Landlord Rights & Responsibilities and Condominium Law
3 Our Team Homero Tristan, Founding Partner Pedro Cervantes, Managing Partner Norma Manjarrez, Associate Mario Treto, Jr., Associate Karyn Vanderwarren, Of Counsel
4 Landlord and Tenant Law A PRACTICAL GUIDE FOR LANDLORDS IN ILLINOIS
5 Overview and Introduction LEASING YOUR PROPERTY TO QUALITY TENANTS YOUR LEASE UNDER THE CHICAGO RESIDENTIAL LANDLORD TENANT ORDINANCE YOUR RIGHTS UNDER THE FORCIBLE ENTRY AND DETAINER ACT THE TRIAL JUDGMENT AND POSSESSION ORDERS
6 Screening Prospective Tenants A few simple steps will help you screen prospective tenants: Verify lease application information. Contact the previous landlord. Conduct a thorough credit check. Is the application completed correctly? Is certain information missing? Check public records.
7 The Lease Tristan & Cervantes has provided a copy of these documents for your convenience. A written lease is strongly recommended. In Chicago, the law requires you to attach certain documents to your lease. Chicago Residential Landlord Tenant Ordinance Summary Rate of Interest on Security Deposits Summary Failure to attach these documents to your lease can subject you to statutory violations and fines. Lead Based Paint Disclosure Heating Costs Disclosure
8 Heating Costs Disclosure If your tenant is responsible for paying their own heating bills, you must: Provide a Heating Cost Disclosure to the Tenant before you sign the Lease. Inform the tenant, in writing, that they are responsible for heating costs. Obtain a yearly heating cost estimate from People s Gas or ComEd. Give tenant copies of Estimated Costs and have Tenant sign an Acknowledgement.
9 Does your lease provide the name of the bank where the deposit is held? The Rule The name and address of the bank were the security deposit is held must clearly appear in your lease (a)(3) Penalties Tenant is entitled to 2x the amount of the security deposit plus attorney s fees (f)(1)
10 Does your Lease contain illegal terms and conditions? The following lease terms are illegal: A tenant cannot waive their right to a jury. Waive the protections of the RLTO. Damages The tenant is entitled to two months rent plus attorney s fees The landlord cannot be entitled to Attorney s Fees.
11 Do you charge an Illegal Late Fee? What is proper late fee? The fee can only be $10 per month for the first $500 in rent plus 5% per month for any amount in excess of $500 in monthly rent. Examples: $500 rent = $10 late fee $1,000 rent = $35 late fee Damages An illegal late fee entitles the tenant to damages of twomonths' rent plus attorney s fees (h)
12 Security Deposits Chicago Residential Landlord Tenant Ordinance, Section If you violate these rules, your Tenant is entitled to damages of: 2 x the Security Deposit + Attorney s Fees. Landlords must pay interest on Security Deposits. (.057%) The deposit always remains the Tenant s money. If you transfer the property, you must notify the tenant within 14 days. The bank must appear in the lease or you must give the tenant a signed receipt that includes the owner's name, the date it was received and a description of the apartment. Before the landlord can deduct expenses for damages from the security deposit, the landlord must provide the tenant with an itemized statement of the damages within 30 days of the date the tenant vacates the dwelling unit. You must return the deposit within 45 days of the date the tenant vacates the apartment.
13 Question: What can you do if your tenant stops paying rent?
14 Examples of what NOT to do: Plugging, changing, adding or removing any lock, removing the Door Blocking any entrance to the Apartment Removing any door or window from the unit Disconnecting the electricity, gas, hot or cold water, plumbing, heat or telephone service; Removing a tenant's personal property from the unit; or The use or threat of force, violence or injury to a tenant's person or property. If you want to evict your tenant, you must follow the law.
15 Self-Help is Illegal It is improper for a landlord to resort to self help remedies in order to evict a tenant. When a landlord elects to use self-help remedies to evict a tenant, they are in violation of the law. When a landlord illegally evicts a tenant, the tenant may have a cause of action in trespass, for breach of the implied covenant of quiet enjoyment and for illegal conversion of property.
16 The Forcible Entry and Detainer Act The Forcible Entry & Detainer Act is the sole means for settling a dispute over the possession of property. Applies to all residential property in Illinois. Does not apply to commercial/business leases. 735 ILCS 5/9-101
17 It all begins with the Notice 5 Day Notice- Nonpayment of Rent 10 Day Notice- Breach of any term in the lease 30 Day notice- Termination of Lease if No Written Lease Is In Effect
18 If the tenant pays the rent due within 5 days, the Landlord cannot evict the tenant. The Landlord cannot refuse payment of the full amount of rent due. Only the full payment of rent will terminate the Notice. If the tenant offers any amount below the full amount of rent due the landlord can deny it and proceed to court. What about if they offer less than full amount and I take that amount? 5 Day Notice Nonpayment of Rent
19 Breaches of the terms of a lease, other than nonpayment of rent, require a 10 Day Notice. The notice must disclose the section of the lease that was violated as well as the specifics of the violation Examples: Pets in the unit; Loud music at night; Uninvited tenants living in unit; or Illegal Activity. 10 Day Notice Breach of a Lease Term
20 30 Day Notice to Terminate Lease Where there is a month-to-month tenancy, the landlord may terminate it at any time by giving a thirty day notice. 735 ILCS 5/ The landlord does not need to give any reason for terminating the tenancy. LANDLORD S 30-DAY NOTICE TO: TENANT NAME 123 Main Street Chicago, IL YOU ARE HEREBY NOTIFIED THAT your tenancy of the following being described as: 123 Main Street, CHICAGO, IL 12345, City of Chicago, County of Cook, and State of Illinois, will terminate on the 30th Day of May, 2010 and you are now hereby required to surrender possession of said premises to the undersigned on that day. DATE: May 1, 2010 BY: As Attorney and Agent for Landlord, LANDLORD S NAME
21 Methods of Serving Notice NOTICE MAY BE DELIVERED TO THE TENANT IN THE FOLLOWING WAYS: 1. PERSONALLY OR TO ANY PERSON WHO LIVES IN THE UNIT 13 OR OLDER. 2. CERTIFIED OR REGISTERED MAIL; OR 3. POSTING ON THE PREMISES IF NO ONE IS IN ACTUAL POSSESSION OF THE UNIT.
22 The Lawsuit If you issued a proper notice and the tenant failed to comply, you must file a forcible entry and detainer suit in the county where the property is located. Joint or single action complaints In Cook County, the filing fee for a complaint is $234.00; and The Sheriff charges $60.00 per person to serve the Summons and Complaint.
23 Why must I include Unknown Occupants? The Sheriff will not enforce the eviction if you do not name Unknown Occupants as a defendant to your Lawsuit and named in the Order for Possession
24 Service of Process Each tenant must be served with a copy of the Summons and Complaint. You must also serve Unknown Occupants Methods of Service include: Personal Service on the Tenant; Substitute Service on a person who lives in the unit over the age of 13; or Service by Publication (possession only)
25 Defenses to your Lawsuit CAN THE TENANT RAISE ANY DEFENSES AND STAY IN THE UNIT RENT FREE?
26 Only Germane Defenses are Available Proper Defenses Improper Defenses Plaintiff is not a proper party Retaliation against Tenant Discrimination by Landlord Notice not served properly Notice did not give the proper number of days. Eviction action filed too early. Lost my job Cannot afford the rent My child is in the hospital Failed to make repairs
27 The main defense is a defective Notice A tenant can attack your Notice by informing the Judge that: 1. They never received the 5-Day Notice; 2. The Notice was improperly served; (on a minor, etc) 3. The Notice is defective (wrong address, names, etc.) 4. They paid the amount due within 5 days. 5. You filed suit prematurely
28 Habitability Defenses Tenants may argue that rent was not paid because the unit needed repairs and brings certain defects in the unit to the judge s attention. The defect must be of such a substantial nature to render the premises unsafe or unfit for habitation. The tenant must give the landlord written notice of the defect and 14 days to repair the defect.
29 Counter Claims and Jury Demands A TENANT MAY FILE A COUNTERCLAIM FOR VARIOUS REASONS INCLUDING: * VIOLATIONS OF THE CITY OF CHICAGO LANDLORD TENANT ORDINANCE * NOT HAVING PROVIDED PROPER DISCLOSURES, SELF HELP, IMPROPER HANDLING OF DEPOSIT, ETC.; * ALTHOUGH YOU MAY ULTIMATELY OBTAIN POSSESSION OF THE UNIT, IT MAY COST YOU A LOT OF MONEY AND TIME.
30 Judgments and Orders for Possession IF THE COURT FINDS THE RIGHT OF POSSESSION TO BE WITH THE LANDLORD, IT ENTERS A JUDGMENT CALLED AN ORDER FOR POSSESSION. THE COURT MAY AWARD UNPAID RENT AND COSTS. ATTORNEY S FEES ARE NOT RECOVERABLE IN CHICAGO.
31 Period of Stay The court will stay enforcement of the Order for Possession. The stay period allows the tenant time to vacate the apartment. The length of Stay is within the Judge s discretion. Normal Stays are within 7-14 days. The stay may be longer if the tenant has children or has lived in the unit for years.
32 Enforcement When the Period of Stay expires, you must file the Order for Possession with the Cook County Sheriff. Estimated eviction time: 3-5 weeks from end of the Stay. $60.50 Eviction Fee
33 Should I have Insurance on My Rental Property? The Answer is YES! The type of insurance you should have include: General liability/casualty insurance to cover a loss to the property itself; and Premises Liability Insurance to cover any possible injuries to persons or other property. (i.e. cover claims for trip and fall on defective step, or damage to neighboring property if furnace was defective and causes fire, etc.)
34 Should I Own My Property Personally? If you do not want to be personally liable and expose all of your assets to loss, then it is advisable to have the ownership of your property(ies) in some form of entity such as: Limited Liability Company (including Series LLC); or Corporation
35 Conclusion THANK YOU! IF YOU HAVE ANY QUESTIONS, PLEASE CONTACT US TRISTAN & CERVANTES