Many renters panic when they find out their building is for sale. Even worse, many others only learn about the sale after it's already done! Now that the housing market is starting to recover from the crash of 2008, there will be a lot more apartment buildings up for sale. It's important for Chicago renters to know what to expect.
Note: today I'll be talking only about when one private landlord sells the building to another private landlord. I won't be dealing with what happens when a bank takes over a foreclosed building just yet, that's a very different matter in Chicago and will take a separate article of its own. I also won't be dealing with what happens when your landlord passes away, but I have addressed this matter in the past.
Your lease is not over.
Your lease is for a unit in the building regardless of who owns it. Continue to pay rent to the old owner as you've always done until you are notified in writing of the new owner's address. Then pay to the new address.
If the landlord moves in or moves out, your rights may change.
If you live in a small building with 6 or fewer units, your rights are determined by where your landlord lives. As long as your landlord lives off-site you're covered by the very robust Chicago Residential Landlord-Tenant Ordinance. Once they move in, you're only covered by Illinois' very weak rental laws.
On the other hand, if your landlord had lived in the building and the new owner does not, you've gone the other way, and that's a very excellent thing!
Your rent will probably go up even if the value of your apartment does not.
Landlords are investors. They buy buildings just like other investors buy stocks, bonds or mutual funds. In order for them to improve the value of their investment they need to demonstrate that they can obtain higher rents for the apartments.
If a landlord wants immediate growth, they'll either increase the rent for all current tenants, or remove the current tenants, renovate the apartments and fill them with tenants who can pay more. Which leads me to...
The new landlord can't just raise your rent or kick you out right away (but they may do so soon).
If you're on a month to month lease, the new landlord can raise your rent or ask you to leave with one month's notice.
If you're on a fixed term (e.g., 1 year) lease, it depends on the terms in the lease itself. Some leases have what's called a “kick out clause,” allowing a new landlord to terminate or alter your lease with 60 or 90 days notice. Other leases say nothing, in which case the landlord cannot remove you mid-lease unless you allow them to do so.
Some landlords may offer you cash in exchange for moving out – it's not mandatory that you accept, but if it works for you, go for it. After all, there's no point in staying where you're unwelcome. Others may just wait until 30 days before your lease expires and then provide written notice that they're not going to renew it – that is legal and you do have to accept it.
The new landlord must tell you who they are and where to find them.
If you're covered by the Chicago ordinance, the landlord must give you written notice of who they are and how to contact them by mail within 14 days of the sale of the building.
The new owner still has to return your security deposit.
If you have a security deposit with the old landlord, he or she will hand it over to the new owner.
If you're covered by the Chicago ordinance, the new owner must tell you the name and address of the bank where they've stowed it. They have to tell you in writing by email, mail or hand delivery to your last known address, and they must do it within 14 days of the day the deposit changes hands.
If you're living in an owner-occupied building with 4 or fewer units, the new landlord can deduct anything they want from your deposit without giving any sort of accounting of it. For everyone else, the new landlord must provide a written list of all deductions and return whatever is left of your security deposit within 45 days after you move out.
Note that some owners looking to avoid the hazards of Chicago security deposit law may just return your deposit outright when they buy the building. This is normal behavior. It does not give you free rein to trash your apartment – it just means that if you cause major damages to the apartment that they'll come after you in court instead of taking it out of the deposit like they used to.
The new owners may ask you to sign a new lease.
Sometimes landlords use bad leases. I can recall one building we on-boarded that had the most horrible, illegal leases I've ever seen! Another one had all their leases written in Polish. In a couple of cases the old landlord lost the leases or had everyone on month-to-month verbal agreements. Sometimes the landlord is just a stickler for their own particular rules and regulations. No matter what the reason they may offer you a new lease, even if the end date and rent rate are the same as you had with the old landlord.
You do not have to sign a new lease if you're still in the middle of your old one. Read over any new lease offered to you very thoroughly. If you refuse to sign it, your lease with the old landlord will remain valid until it expires. However, when it expires you will probably have to sign the new landlord's lease or move out.
You should screen the new landlord just like you did the old one.
When a building's ownership changes hands it can signal a big improvement or a big downturn in the quality of life for the residents. If you'd like to investigate a new owner so you know what to expect, request a RentConfident Signature Report and we'll get you all the info.
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