Being a landlord can be a rewarding experience, both emotionally and fiscally. But it can also be a perilous task, especially in Chicago. Running afoul of even the smallest violation of the Chicago Residential Landlord Tenant Ordinance can cost a landlord thousands of dollars payable to the tenant. To add insult to injury, the landlord would also be required to pay for that tenant's attorney fees! (FYI, there is a cottage industry of attorneys that prey on landlords, hoping that they screw up just so they can make a quick dollar.)
Like most pieces of legislation, the Chicago Residential Landlord Tenant Ordinance (commonly abbreviated to CRLTO or RLTO) started out with the best of intentions. It was meant to eradicate slum landlords that rented substandard housing to low income people. Throughout the years, however, the RLTO became corrupted, as politicians learned that there were more renters than landlords, and hence, more potential voters for the politicians if they bestowed favors upon the renter class. After all, politicians know that all landlords are rich, so who is really hurting?
Commonly-committed Errors by Landlords
The RLTO is voluminous, and is worthy of several articles all by itself. Most common errors committed by new landlords, in my opinion, are as follows:
1) Not putting the renter's security deposit in a separate interest-bearing bank account held for the benefit of the renter.
2) Not attaching all the necessary disclosures required by the city to the lease.
3) Using self-help to evict a nonpaying renter. If a court finds the landlord liable, the fines start at double the monthly rent and go up from there.
A common tactic when a tenant is taken to court for an eviction based on non-payment of rent is to claim the landlord violated the RLTO or other City ordinance. This counter claim can, in the hands of a clever lawyer, effectively allow the tenant to live in the premises rent free for many, many months. This tactic effectively deprives the Landlord of much rental income, as there is no way to force the tenant to pay or kick them out during the pendency of the eviction proceedings.
But the Landlord is not only beholden to the renter for such fines, he could be liable to the City for any violation found by the inspectors, even if caused and/or reported by the renter. Add to that the State of Illinois has specific landlord-tenant laws, as well as ancillary laws that might trap the unwary, including rules promulgated by the Illinois Department of Human Rights if they determine there was some sort of discrimination related to the rental decision. The Feds can get a bite of the landlord as well, through various Departmental agencies such as Housing and Urban Development.
So, what should you do? Get yourself educated! A new landlord would be well advised to hire a real estate broker to help rent out their property. A good broker will help you navigate the often confusing rental landscape laws that are often quite different from city to city within Illinois. The broker's commission is cheap insurance to make sure the new landlord will not be preyed upon by unscrupulous tenants and their attorneys.
If you are a landlord and find yourself in court in a landlord-tenant matter, please resist the urge to try to represent yourself! Find an impartial attorney to represent your interests. The laws regarding landlords and tenants, especially in Chicago, can seem deferential to the tenant. A good attorney can help you navigate these laws to an equitable outcome.
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