ILLINOIS APPELLATE COURT | Key Points

  1. Last month the Illinois First District Court of Appeals affirmed a judgment entered in favor of Cook County tenant Geneva Norman (“Norman”) against the tenant’s new building owner, U.S. National Bank Assoc., as Trustee, etc. (“US Bank”) for violations of a state ordinance known as the “Keep Chicago Renting Ordinance” referred to herein as “KCRO.” Norman v. U.S. Bank Nat’l Ass’n as Tr. for Structured Asset Mortg. Investments II, Inc., ___ N.E.3d ___, 2020 IL App (1st) 190765 (Ill. App. Ct. June 30, 2020). The KCRO, enacted in 2013 in response to the mortgage foreclosure crisis, sought to eliminate “the common practice of foreclosing lenders to quickly and indiscriminately evict any tenants” leaving vacant properties and blighted areas. In furtherance of this purpose the KCRO required the new owner of foreclosed property to offer “relocation or continued tenancy…on or before the 63rd day of taking ownership” subject to the tenant meeting certain requirements.

  2. US Bank purchased foreclosed property occupied by Norman but waited 187 days after becoming the owner to offer Norman a lease renewal. Prior to offering the lease renewal US Bank violated or failed to comply with other provisions of the Ordinance. Norman sued under the KCRO. The circuit court found US Bank violated the KCRO by failing to strictly comply with its provisions. Norman received a judgment against US Bank for statutory damages of $21,200 and attorneys’ fees of $45,505 which the appellate court affirmed.

  3. The take-away here is to hire competent counsel or a competent property management company or both before purchasing foreclosed property which is subject to KCRO requirements. Failure to strictly comply with the various requirements within the tight 63-day deadline can prove costly. That being said, implementation of a few simple processes and protocols should simplify compliance and prevent violations.

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