Cook County Residential Tenant-Landlord Ordinance (RTLO) Issue Summary | Chicago Association of REALTORS®

COOK COUNTY RESIDENTIAL TENANT-LANDLORD ORDINANCE (RTLO) ISSUE SUMMARY

UPDATE 2/2/2021: After months of work, several concessions were made to the RTLO in January 2021. Changes include:

  • Decreased the ceiling for the $10 late-fee cap to $1,000 from $1,500
  • Reduced the time for lease renewal notifications to 60 days from 90 days
  • Eased restrictions on the storage of abandoned property
  • Expanded a landlord’s right to cure to two business days from 48 hours
  • Extended the time for returning a security deposit to 30 days from 21 days
  • Added additional flexibility in what a landlord may provide to a tenant to satisfy utility bill disclosures
  • Adjusted move-in fees itemized costs to include a “reasonable estimate”

The Zoning Committee unanimously passed the proposal on Tuesday, January 26. The final vote/passage was during the Board of Commissioners meeting on Thursday, January, 28. A lock-out provision is effective immediately, compared to the bulk of the ordinance which is not effective until June 2021.

CAR staff will be working with the Illinois REALTORS® legal department to provide resources to members in communities throughout the county where the new RTLO will need to be implemented. Please remember that this ordinance does not apply to Chicago, Evanston or Mount Prospect. Chicago rental properties are NOT subject to the County’s RTLO, so there are no changes to leases, renewals, etc. that owners in Chicago will need to incorporate based on the County’s ordinance at this time.

 

UPDATE 12/15/2020: Thank you for taking the time to voice your opposition to Cook County’s proposed RTLO. The vote on this proposal has been delayed 30 days, and conversations among the impacted groups will continue to make the proposal more balanced. However, the following modifications to the proposal that we requested were included in the proposal:

  • Those that are exempt from the RTLO
    1. If occupancy is limited to six units or less, that are owner-occupied.
    2. Single-family homes, or single condominium unit that is not owned or managed by a company. The owner or family member resided in the property within the last 12 months.
  • Clarity on the move-in fees. A landlord may charge a move-in fee but it has to be reasonably related to the landlord’s cost for the tenant moving into the unit.
  • A landlord that is not responsible for paying utility costs will provide the data IF costs are known.
  • Clarity that landlords are not responsible to provide internet access to tenants unless it is in the rental agreement.
  • If the tenant is not in material compliance with the rental agreement, the lease will be terminated in 10 days (originally 30 days).
  • Tenant notification of the possible presence of bed bugs within 48 hours (which was changed from 5 days).
  • A landlord has a cure period to provide a summary of the Ordinance if they failed to do so.
  • A landlord has a cure period for administrative oversight of security deposits.

UPDATE 11/18/2020

During the Public Hearing on November 16, real estate groups, tenant groups and private citizens commented on the impact of the county’s proposal. Commissioners made it clear this will not apply to the City of Chicago; however, there are specific provisions that would be problematic. The county’s proposal includes a $10 cap on late rent payments, which does not exist in Chicago’s RLTO. Further, the county’s ban on move-in fees is problematic, as many homeowners associations charge these fees. Move-in fees are often completely removed from the property owner’s control. These items increase risk and the costs of rental properties, hurting the very tenants that the proponents seek to help.

Commissioner Silvestri agreed to form a task force and conduct a survey on existing laws throughout the county regulating residential rentals. While these activities were agreed upon, it appears the bill sponsors want to move forward with a vote in December.

CAR staff will serve on the task force, offer amendments to the proposal and continue to engage Commissioners.


ISSUE

Cook County has introduced a new section of the Human Relations Code titled Residential Tenant and Landlord Ordinance (RTLO). The ordinance was proposed to promote public health safety and welfare, as well as to regulate the relationship between tenants and landlords. A municipal law that already regulates the relationship is excluded. However, the baseline of “regulating a relationship” is unclear. Residential buildings six units or less and owner-occupied are excluded from the RTLO. The county’s proposal applies to all rental agreements regardless of the duration of the tenancy, even short-term rentals.

WHAT DOES THIS MEAN FOR THE REAL ESTATE INDUSTRY?

Ultimately this creates more hurdles to provide housing in the county. The proposal does not take into account existing residential licensing and inspection requirements that municipalities already have adopted into law. The county’s proposal adds additional regulations to many landlords in the county.

OUR STANCE

REALTORS® are open to engaging in conversations about housing stability. The proposal was a cut and paste job from decades-old municipal law. REALTORS® are opposed to piling on additional regulations that are not justifiable.

CAR staff has communicated with the bill sponsors since the legislation was introduced. Our opposition was clear: small landlords must be exempt and the applicability of the county law with municipal law needs to be made clear. These items are not fully addressed in the second version of the county proposal.

REALTORS® have issued a Call For Action (CFA) prior to the public hearing on November 16. In addition to the CFA, staff initiated a coalition letter of real estate industry organizations and brokerages asking the County Commissioners to oppose this particular legislation. Staff and members will participate in the public hearing by providing oral testimony.

HISTORICAL PERSPECTIVE

On July 30, 2020, Cook County Commissioners Scott Britton (14th District) and Kevin Morrison (15th District) sponsored and introduced the RTLO. It was immediately referred to the Finance Committee. The legislation was temporarily withdrawn and a second version was introduced on October 22. It was then later referred to the Zoning and Building Committee. The public hearing on November 16 will be the first opportunity for members of the public to comment on the proposal.

Chicago adopted its own Residential Landlord Tenant Ordinance (RLTO) in 1986. This law has created many problems for housing providers, and it could be argued it has drastically increased the cost of housing throughout the city. For years, REALTORS® have tried to make changes to the existing RLTO allowing judicial discretion if there are minor discrepancies in a security deposit refund. Lawsuits have resulted in significant fees and fines for landlords, putting many out of business and draining their life savings because of a simple, innocent mistake. The county’s RTLO proposal incorporates many of Chicago’s RLTO terms while also limiting the landlord’s ability to operate and/or negotiate reasonable lease terms.

LEGISLATIVE OUTLOOK

On November 16, the Zoning and Building Committee will have the first public hearing on this matter. The Chairman of Zoning and Building, Commissioner Silvestri (9th District), has indicated that he will form a Task Force to review the issue. The bill sponsors, Commissioners Scott Britton (14th District) and Kevin Morrison (15th District), indicated they would like to see the RTLO approved by the end of the year, although something this complex takes many months to iron out and finalize. Therefore, REALTORS® will continue to push for a delay so that thoughtful public policy can be formed regarding the landlord-tenant relationship in Cook County.

ADDITIONAL RESOURCES