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Common Renter Misconceptions and Why Chicago Will Never Have Rent Control

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Many Chicagoans are renters and therefore have a landlord they cut a check to every month. Landlords come in various forms, from an independent property owner renting their garden unit to developers that own and manage hundreds of apartments in high-rise buildings. A renter's relationship with their landlord can affect their quality of life, so it's important that both tenant and landlord fully understand the rental agreement before moving forward.

With that said, both landlords and renters have certain rights and legal protections regarding one another. And while Chicago's Residential Landlord and Tenant Ordinance provides the legal framework for the relationship between landlords and renters, there are some common misconceptions tenants might have regarding their rights. We reached out to Mark Swartz, the legal director at the Lawyers' Committee for Better Housing, to provide some more insight on things like move-in fees, to having pets, to the odds of Chicago ever having rent control.

On general misconceptions about strong renter protections

When you say that Chicago has strong tenant protections, I would beg to differ. I would tell people that the ordinance has leveled the playing field. There are a lot of other places where tenants have a lot more rights than people in Chicago — we don't have rent control or Just Cause protection. As an example, when a building is purchased by an investor and people are living there month to month without leases, the investor just has to give people 30 days notice and everyone has to be out.

It's pretty much a forgone conclusion for tenants that if a landlord wants to vacate a property, it doesn't matter how long the tenants have lived there, they don't have an awful lot of rights. Also, in other jurisdictions, people are allowed to bring actions related to the eviction to the eviction court, but in Illinois the forcible entry detainer law limits the kinds of things people can bring forth as counterclaims.

On the likelihood of Chicago ever having rent control

There's never going to be rent control in Chicago because of strong landlord opposition. It would be very contentious — it's already contentious enough with the affordable housing ordinance that seeks to preserve affordable units. Some people are saying, 'You can't require [developers] to pay into this affordable housing fund or keep certain units affordable, it's going to make it too expensive to do business in Chicago.' But the real reason why we don't have rent control is because the state prohibits it. There is home rule in Illinois, so municipalities are free to experiment and do things that might not be contemplated in the state law, but there are certain state laws that truly can't be overridden and rent control is one of those things where home rule does not apply.

The returning of security deposits and security deposit interest

When the Residential Landlord and Tenant Ordinance was first passed into law in 1986, interest rates were much higher. Things are getting more and more complicated now as people try to avoid the application of the Residential Landlord and Tenant Ordinance.

Some landlords think that the ordinance is difficult to follow with segregating the deposit and paying interest on it every year. But there has been concern about people not calculating the security deposit interest correctly, and that can become problematic. However, that part was amended in 2010, and if a tenant sees that the interest wasn't calculated correctly, then they can make a demand for the correct interest. The double damages doesn't come into play unless they fail to pay interest at all within 30 days. One of the main Chicago landlord associations has a lease, and the lease recommends that you don't take security deposits but instead to take move-in fees.

[The trend also has something to do with the return of security deposits and properly explaining any deductions or just outright keeping it, right?]

Right. There's always going to be some tension between landlords and tenants when the tenant moves out as to normal wear and tear. From the tenant's perspective, they might think that they're leaving the apartment in better condition than when they moved in, but from the landlord's perspective there might be issues. If there are issues with the apartment, the landlord has every right to make deductions from the security deposit — but they have to provide receipts. Landlords get into a lot of trouble by not providing receipts. Landlords have to prove that they spent the money, and if they're able to do that then they're allowed to deduct.

Landlords are also allowed to deduct for rent that is due. By law, the security deposit is held for both damages to the property and for any rent that may be due, and that's why it's a very useful thing. For tenants, it's nice for them to have almost an equity in the home. They don't get it back in time to give it to the next place, but it's nice to have it back, and it gives them some incentive to keep the place in good condition. And for landlords, it's almost like an insurance. Many renters don't understand that they have to wait 45 days before their security deposit money is returned — which really doesn't help them when trying to find a new place. I think it's way too long, but that's what the law is. It gives landlords time to go through the apartment and see what needs to be done. But that's a common misconception that many renters have — that they might think that they should have their security deposit back when they are ready for the next place.

The problem with move-in fees

In Chicago, tenants understand that they're going to pay a security deposit along with first month's rent to secure an apartment. And because of the custom to pay a security deposit, there's an expectation that tenants are going to have to pay something. But the problem with move-in fees is that they're not returned. So if a move-in fee doesn't have any particular relationship to an actual cost, then it's a terrible replacement for security deposits from the perspective of the tenant because it makes the rent seem less expensive than it is.

Move-in fees that are not associated with costs are problematic and there might be some legal challenge out there because you're making the rent look less than it really is. And the problem is that landlords are taking advantage of the custom that people are used to giving that security deposit money upfront. Some renters will see that the move-in fee is less than a security deposit and think 'Well, that's not too bad,' or might not want to have their money tied up for so long, because many renters don't understand that they have to wait 45 days before their security deposit money is returned. But having a security deposit is almost like having equity.

Airbnb and renting

Airbnb is being used a lot in Chicago but thinking about from a landlord/tenant perspective it's tough to say.

[I've heard about newer developments where the lease has a blurb about Airbnb and it being in violation of the tenant agreement.]

I haven't seen anything like that, but I would think that that is a perfectly reasonable clause to put in the lease.

Mom and pop landlords

The Residential Landlord and Tenant Ordinance has a number of exceptions and one of the exceptions is that it doesn't apply to landlord-occupied buildings with six units or less, and that's to protect independent mom and pop landlords. And if the landlord doesn't live there — it doesn't matter how small the building is — it is covered. Houses count and condominiums count.

Pets and smoking

I'm a pet lover myself, but it's perfectly reasonable that some landlords might not want animals because of noise and other things. Plus, there are a lot pet friendly places in Chicago. People can certainly negotiate with a landlord to make them feel comfortable about having a pet. For example, you can suggest a pet deposit. There are a lot of places that are very welcoming to pets and those are probably the places where people with pets are going to want to live anyway. It's just something that people need to be up front and clear about. The only real danger with pets—or really almost anything for that matter — comes when the lease isn't clear about these types of things. You can have a lease that doesn't mention pets but if your landlord has an aversion to you having a pet, then there's going to be a problem. So, landlords needs to think about these kinds of things and renters need to be up front too.

Another common issue is smoking inside. A lot of people smoke and some leases don't mention smoking. I've had a couple of cases in my career where people moved in to an apartment and the landlord later realized that they smoked and things went from bad to worse. And from the tenant's perspective they think, 'We have a lease and it doesn't say that I can't smoke.' And that's right. A lease is a contract and there are some things you simply just can't contract out (race, background, etc), but one of the things you can put in the contract is that tenants can't smoke. If a landlord doesn't want a tenant to smoke they have every right to put that in the contract.

Why landlords usually pay for water

Because it's a utility, there has to be some disclosure on who's responsible for what. Water is not individually metered by unit so it's almost always included in the rent. But if you were renting a house, the lease could say you're responsible for the water and that wouldn't be a problem.

Misconceptions about evictions and the five day grace period

Everybody seems to think that there's a five day grace period to pay rent in Chicago, and there isn't. Unless you have a written arrangement with your landlord to pay it on a different day, your rent is almost always due on the first day of the month. A lot of leases state that on the fifth day they will charge a late fee, and some people read that and think 'Oh, well I have until the fifth to pay it.' So you might not get a late fee until the fifth, but if the landlord wants the rent on the first and you don't give it to them on the first, they can give you a five day notice on the second day of the month. From there you have five days in which to pay rent, and if you don't pay the rent within five days, on the sixth day, the landlord is allowed to file an eviction action against you. So, the right to pay the rent is only within that five day period, but after that there's nothing you can do—unless of course the landlord is willing to accept it.

Usually, there's a lot more going on and people can work things out, but the straight nonpayment process is that the landlord is entitled to possession if the tenant fails to cure a five day notice. If you're going to court, you have to serve the tenant and a lot of what happens in eviction court is driven by the experience of the people that the landlord has hired. So if you hire a competent attorney, then you should be able to evict someone pretty quickly.

·The Top 10 Rights Chicago Tenants Don't Know They Have [Curbed Chicago]
·Renters Week 2015 archives [Curbed Chicago]