COVID-19 Eviction Protection Ordinance Zips Through Chicago City Council
On June 17, 2020, the Chicago City Council passed the COVID-19 Eviction Protection Ordinance (Ordinance) intended to (1) protect residential tenants who have experienced “any loss, reduction or delay in receipt of income, or loss or reduction of employment attributable in whole or in part to COVID-19”, (2) reduce the number of residential evictions resulting from the ongoing pandemic, and (3) limit housing insecurity in the City of Chicago. The Ordinance is retroactive to March 21, 2020 and will expire 60 days after Governor Pritzker's eviction moratorium is lifted.
Every residential dwelling unit within the city limits is subject to the Ordinance. The Ordinance provides that after the landlord sends to the tenant a statutory 5-day notice letter warning that the tenant will be evicted if rent is not paid in full before the end of the 5-day period, the tenant can secure an additional 7-day grace period by simply responding in writing to the 5-day notice stating that the tenant is unable to pay rent attributable in whole or in part due to fallout from COVID-19. If the landlord receives this notice from the tenant within 5 days of receipt of the eviction notice, the landlord must allow for an additional 7-day good faith negotiation period prior to filing an eviction lawsuit. During this 7-day negotiation period, the landlord must make a good faith effort to contact and negotiate with the tenant in order to reach a mutually acceptable payment plan or other resolution to the monetary default. Landlords, however, are prohibited from requesting information about the tenant’s retirement accounts, assets and personal property. The Ordinance encourages landlords to utilize methods such as deferring unpaid rent for repayment over a period of not less than 60 days, applying the tenant’s security deposit to unpaid rent, or submitting the case to mediation. The Ordinance prohibits landlords from requiring non-disclosure agreements and institutes a cap on interest and late fees.
If negotiations are unsuccessful, in order to evict the defaulting tenant, the landlord will be required to prove to the eviction court (through documented evidence) that the landlord used good faith efforts in an attempt to resolve the monetary default in accordance with the Ordinance. Importantly, the Ordinance does not excuse the non-payment of rent and the Ordinance does not apply to non-monetary material breaches of the lease. Governor J.B. Pritzker recently announced that the statewide residential eviction moratorium that has been in effect since March 21, 2020 will be extended via executive order until July 31, 2020. When the moratorium is lifted, landlords will need to be prepared to comply with this new eviction procedure or risk losing cases in eviction court.