Illinois advocates and residents are celebrating a new state law that codifies protections for renters living in foreclosed properties. The law, which took effect on November 19, ensures that key protections of the federal Protecting Tenants in Foreclosure Act (PTFA), set to expire at the end of 2014, continue for Illinois residents. Housing Action Illinois, an NLIHC State Coalition Partner, the Sargent Shriver National Center on Poverty Law, and the Heartland Alliance were the primary advocates for the law’s passage. Governor Pat Quinn (D) signed the bill in September at the home of a retired Chicago police officer who took in neighbors who lost their home after their landlord’s building was foreclosed.
Since the onset of the foreclosure crisis, Housing Action has partnered with legal service providers, housing counseling agencies, and other allies to address the impact of foreclosures on homeowners and renters. Illinois continues to rank among the states with the highest number of foreclosure filings, prompting advocates to push for strengthened state laws to address the crisis.
During the Spring 2013 state legislative session, Housing Action and its partners worked with state Senator Jacqueline Collins and Representative Kelly Cassidy—the bill’s sponsors—to overcome initial opposition from multiple interests, including financial institutions, the state’s association of realtors, property owners associations, and others. Following many hours of negotiation, lobbying, and grassroots advocacy, an amended bill passed with no significant opposition.
The new state law generally requires owners of residential rental properties acquired through foreclosure to recognize leases entered into prior to foreclosure; specific caveats concern the stage of foreclosure when the lease was signed. In most cases, the law gives renters who signed leases after their foreclosure cases were initiated the right to remain in their homes for the duration of the leases, up to one year. Renters who signed leases prior to initiation may stay for the entire duration, even if it is more than one year. Oral leases also survive a foreclosure, in most cases as month-to-month tenancies. The bill also ensures that renters have adequate time to move by requiring a 90-day notice for all renters with expired or expiring written or oral lease agreements.
Some concessions were made to ensure passage of the legislation’s key parts. For instance, the original bill included language allowing a private right of action for tenants, which would have allowed them to file legal actions seeking relief of violations. However, this provision was excluded following negotiation; however, the bill still provided affected tenants with a defense to an eviction case. Provisions to regulate and protect renters with “cash for keys” agreements, in which a renter agrees to move early in return for a cash payment from the new owner, also were deleted.
“If the federal PTFA expires December 2014, advocates wanted to make sure bona fide residents of a property in foreclosure would not face sudden eviction, if the federal law sunsets,” said Bob Palmer, Housing Action’s policy director and an NLIHC board member. “We hope that passage of the Illinois law will bolster efforts to make the federal protections permanent.”
Earlier in 2013, Chicago tenants experienced another victory with passage of the “Keep Chicago Renting Ordinance,” which goes beyond the federal and state protections for tenants in foreclosed buildings. Led by the Albany Park Neighborhood Council, a coalition of community-based groups organized renters in a two-year effort. The resulting ordinance requires banks that acquire rental units at foreclosure to act as landlords, and either let bona fide renters stay in their homes or pay them a relocation fee of $10,600.