The Cook County Residential Tenant Landlord Ordinance (RTLO) became effective as of June 1, 2021. The ordinance covers Cook County, but excludes Home Rule municipalities, notably Chicago, Evanston, Oak Park and Mount Prospect. There are a lot of traps for the unwary landlord. Below is an outline of some of the key components of the RTLO.
1. Applicability: The RTLO applies to all residential rental units in Cook County except the following:
a. Hotels, motels and transient housing (unless occupied for 32 consecutive days, with rent payable monthly);
b. medical facilities, shelters, geriatric facilities, religious institutions, dormitories, fraternal orders;
c. cooperative housing;
d. employee occupied as a condition of employment;
e. owner occupied building with six or fewer units;
f. early occupancy by a contract purchaser (but excluding a holdover seller);
g. single family residence provided that:
1. Sole residential lease property of the landlord;
2. Owner managed property (no property manager);
3. Owner is not a corporation;
4. Owner or an immediate family member occupied the unit within the past 12 months;
If the property is exempt from the RTLO, the exemption must be prominently displayed in lease marketing materials and lease application forms, prior to landlord accepting any fee or deposit from a prospective tenant.
2. Parties to the Lease: The lease must include the full names of all occupants, including minors; with occupancy capacity determined by zoning laws. The landlord or it’s manager’s name, address and telephone number must be included, with similar information provided for any successor landlord upon the sale of the premises.
3. Unsigned Lease. If the landlord has failed to signed the lease, but accepts payment, the lease will be deemed binding on the landlord in accordance with the terms of the unsigned lease. If the tenant has failed to sign the lease, but takes possession and pays rent, then the lease will be deemed binding upon the tenant in accordance with the terms of the unsigned lease. Any lease ratified in this manner becomes a lease for a term of one year under the RTLO.
4. Prohibited Lease Provisions. Under the RTLO, if the lease includes any of the following provisions, and the landlord attempts to enforce the prohibited clause, tenant may bring a claim against landlord for the greater of actual damages or two months’ rent:
a. a waiver of rights or remedies;
b. confession of judgment;
c. a non-disparagement restriction;
d. restriction on rights or remedies and indemnification;
e. waiver of jury trial;
f. permitting payment of landlord’s legal fees beyond the scope of the RTLO;
g. a termination right in favor of landlord without affording a comparable right to tenant (absent a separate written disclosure signed the parties);
h. late fees beyond those permitted in the RTLO; the permitted late fees under the RTLO being the following:
1. $10 per month for the 1st $1,000; plus
2. 5% of the month’s rent above $1,000
i. pays discounts for early rent payment in an amount equivalent to the penalty charges for late rent;
j. permits landlord to allocate rent payments to other categories (such as late fees and utilities);
k. permits landlord reimbursement of an unreasonable amount of expenses; or
l. permits landlord to disguise an expense item by applying an improper name or category for the item.
5. Utilities. At the outset, the landlord must disclose who is responsible for utility charges. If the tenant is responsible for direct payment of utilities to the provider, then utilities must be separately metered, and if known, the landlord must disclose utility charges for the prior 12 month period. Alternatively, if utility charges are paid to the landlord, the landlord must disclose to the tenant the prior 12 month utility charges; if unknown, the landlord may provide utility charges for a comparable unit, or disclose that charges are unknown. The RTLO requires minimum heating standards for a dwelling from September 15 to June 1 of each year; and must be at least 68 degrees from 8:30 am-10:30 pm, and 66 degrees from 10:30 pm-8:30 am.
6. Other Disclosures. Landlord has a duty to disclose to the tenant, in writing: (a) any building code violations within the prior 12 months; (b) any threat to halt utility service by utility providers; (c) lead hazards (including delivery of the current EPA pamphlet on lead paint); (d) any foreclosure notice for the premises; (e) an attachment of the RTLO Summary published by Cook County; and (f) landlord’s rules. Failure to provide disclosures can result in damages equal to the greater of one months’ rent or actual damages, plus attorney’s fees.
7. Move in fee. Landlord must provide the tenant with a reasonable estimate of move in expenses, cannot charge for routine maintenance or upkeep and cannot disguise the charge with a different name or category.
8. Habitability. Where the municipality has adopted a Building Code, habitability is determined by compliance with the Code. In general, under the RTLO, the premises must be structurally sound and in good repair, in compliance with health and safety codes, including fire safety systems; maintain operating electrical, plumbing, HVAC, lighting, pest and rodent control, proper security, flood protection, refuse disposal, and be generally fit and habitable.
9. Bed Bugs are the landlord’s sole responsibility even if the originating source was the tenant. The landlord must engage and pay for pest control, keep and maintain pest control records for three (3) years, and make the records available for government inspection. Under the RTLO the tenant must notify the landlord 2 days after discovering bed bugs, and the landlord must respond within 2 days thereafter of intent to eradicate the bed bugs, and must then commence abatement within 10 days after the notice from tenant. If the landlord fails to respond, tenant may terminate the lease upon another 2 day notice delivered to landlord (if the landlord has failed to cure). Upon a breach of this section of the RTLO, tenant may also recover the greater of one month’s rent or actual damages plus attorney’s fees
10. Landlord Failure to Deliver Possession. If at the outset of the lease, the landlord fails to deliver possession, under the RTLO, rent abates until possession is provided. However, the tenant may also bring an action to terminate the lease or in the alternative, sue for possession and damages in amount equal to the greater of 2 months’ rent or twice the value of actual damages. Upon termination, the landlord must return any tenant deposits within 48 hours.
11. Landlord Entry. The landlord may inspect the premises upon 48 hours prior written notice, and the inspection right extends to landlord’s agents including mortgage lenders, contractors and brokers. Absent an emergency, when immediate access is permitted, access for inspection is limited under the RTLO to 8:00 A.M.-8:00 P.M. Access includes the right to make all necessary repairs, to provide services, and to market the premises for sale; however, access for showing to prospective tenants is only permitted within 60 days prior to the expiration of the lease term.
12. Tenant Remedies. If landlord is in default, and if not cured within 14 days after written notice, the tenant may either: (a) withhold from the next rent payment equal to the “reduced value of the premises”; or, terminate the lease. If the landlord fails to provide essential services including HVAC, plumbing, electrical, internet as required under the lease, within 24 hours after notice of the failure of such services, the tenant may withhold from rent an amount reflecting the reduced value of the premises and costs for obtaining alternative services, including alternative housing; in addition tenant may terminate the agreement if those services are not provided within 72 hours after notice and the security deposit must be returned immediately upon tenant vacating the premises. After a fire, tenant may terminate the lease upon 14 days notice. If the premises are habitable, rent must be adjusted ratably for the diminution in use/value. If landlord fails to diligently repair damage, the tenant may also terminate the lease upon 14 days’ notice, and for rent adjustment, the date of the casualty is deemed the effective date of termination. If the landlord fails to repair an item, which repair cost is $500 or less, tenant may commence repair and offset against rent the cost of repair (limited to $500 or less). The tenant must provide the landlord with itemized receipts for the cost of repair. The RTLO provides extensive protection for illegal entry by landlord, retaliatory action or harassment by the landlord, and in such circumstance, the tenant may recover damages in amount equal to the greater of 2 months’ rent or twice the value of actual damages, as well as obtaining an injunction barring further landlord entry, and/or the right to terminate the lease and may also recover reasonable attorney’s fees.
13. Cure Right. Under the RTLO, a tenant has one cure right upon a default, if prior to issuance of a court order of possession, the tenant pays all amounts due, including costs associated with the eviction.
14. Security Deposit. Under the RTLO, security deposits may not exceed, one and one-half months’ rent; nor can the landlord avoid the limit by labeling the payment as anything other than a security deposit. Any portion of the security deposit in excess of one months’ rent, may be paid by tenant in not more than 6 equal installments over a period of 6 months. Security deposits must be returned 30 days after the tenant has vacated the premises. The landlord must provide the tenant with a signed (unless electronic transfer) receipt for the deposit, hold all funds in an FDIC insured, segregated bank account. Security deposits may only be applied to unpaid rent, court costs, and the reasonable cost of repair (excluding ordinary wear and tear). Landlord must provide the tenant with an itemization of any costs offset against the security deposit within 30 days, mailed to tenant’s last known address. Upon a transfer, a predecessor landlord remains liable to the tenant for the security deposit, until the deposit is actually transferred to the successor landlord and provided the predecessor landlord, within 10 days of transfer, notifies the tenant of the transfer. The successor landlord must also notify the tenant of the transfer within 14 days of receipt of the security deposit.
15. Tenants Abandonment. The tenant will be deemed to have abandoned the premises if unoccupied for 32 days, removed their property, and failed to pay rent. Any property left after abandonment, with no market value, may be discarded by landlord without notice. Any property with value may be sold after 7 days prior written notice to tenant; and upon sale, the landlord must hold the proceeds for tenant for a period one year. After expiration of the one year period, the landlord may retain the proceeds.
16. Lease Renewal. The Landlord must notify the tenant 60 days prior to the lease termination date of intent to terminate a month-to-month tenancy or not renew a written rental agreement. If the landlord fails to provide tenant with written notice, the tenant may remain in the dwelling unit for up to 120 days after notice, even if beyond the lease term (on the same terms as the original lease). A tenant cannot be required to renew a lease more than 60 days prior to the termination date. If a Landlord violates this restriction, the tenant can recover the greater of one (1) months’ rent or actual damages, plus attorney’s fees.
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