Docstoc

Illinois Mortgage Foreclosure

Document Sample
Illinois Mortgage Foreclosure Powered By Docstoc
					                                   The Chicago Bar Association/Young Lawyers Section
                                   Presents:

                                   Illinois Mortgage
                                   Foreclosure
Thursday, September 16, 2010 3:00-6:00 p.m.
The Chicago Bar Association 321 S. Plymouth Court
Level of Instruction: Basic
Presented by: YLS Real Estate Law Committee
Also Available: DVD Rental, Written Materials

DEFENDING RESIDENTIAL BORROWERS IN A MORTGAGE FORECLOSURE ACTION IN ILLINOIS
CAn overview of the Illinois mortgage foreclosure processCDefenses to a mortgage foreclosure lawsuit and goalsCInsight
into what created the residential mortgage foreclosure crisisCA brief forecast on what is on the foreclosure
horizonCDefective mortgage/predatory lending issues
CBankruptcy considerationsCStandingCSecuritization
SPEAKERS:
Ahmad T. Sulaiman, Law Offices of Sulaiman & Associates, LLC
Matthew Hector, Law Offices of Sulaiman & Associates, LLC

DEFENDING RESIDENTIAL BORROWERS IN A MORTGAGE FORECLOSURE ACTION IN ILLINOIS
CHome Affordable Modification Program (HAMP)CMiscellaneous Considerations
Daniel Lindsey, Lawyer’s assistance Foundation of Metropolitan Chicago

PROTECTING THE RIGHTS OF TENANTS LIVING IN BUILDINGS IN FORECLOSURE DURING AND
AFTER THE FORECLOSURE PROCESS
CA Review of LCBH’s 2009 Report, “Chicago Apartment Building Foreclosures: Impact on Tenants”COverview of the
federal Protecting Tenants at Foreclosure Act of 2009 including a recent extension and clarificationCOverview of the
recent amendments protecting tenants in foreclosure to the Illinois Mortgage Foreclosure Law and the Chicago
Residential Landlord Tenant OrdinanceCCounseling strategies for tenants in foreclosure: rights and responsibilities,
including to whom to pay rent, and maintaining habitability and utility servicesCNon-litigation advocacy for tenants:
working with banks, servicers, receivers, and other successors in interest to uphold tenants’ rights during the foreclosure
process, including addressing threats of illegal lockouts and cash-for-keys offersCRepresenting tenants in chancery,
forcible entry and detainer, and building courts: litigating illegal lockouts, supplemental petitions and eviction actions
SPEAKERS:
Mark F. Swartz, Lawyer’s Committee for Better Housing
Allyson Gold, Lawyers’s Committee for Better Housing

PRACTICE POINTERS
CStatistical InformationCCourt Rules of Procedure and Standing OrdersCProper decorum, professional conduct and
civilityCRecent developments in the lawCReceiversCHAMPCMediation
Hon. Jesse G. Reyes, Chancery Division, Circuit Court of Cook County

MODERATORS:
Kalisa R. Gary, Esq.
Monica T. Carranza, Esq.
Aaron A. Krolik, Esq.
Chairs, YLS Real Estate Law Committee
                  Protecting the Rights of Tenants in Foreclosure
                           YLS Real Estate Law Committee,
                               Chicago Bar Association
        by Mark Swartz and Allyson Gold, Lawyers’ Committee for Better Housing
                                 September 16, 2010
                                  Table of Contents

                                                                        Page No.


Executive Summary, LCBH 2009 Report,
Chicago Apartment Building Foreclosures: Impact on Tenants                  1

Regional Home Ownership Preservation Initiative (RHOPI) News,
Volume 1, Issue 2                                                           3

Public Law 111-­22, PROTECTING TENANTS AT FORECLOSURE ACT
of 2009, Extended and clarified by, H. R. 4173                              7

Congressional Record Volume 155, Number 122, Page S8978                     9

Applying PTFA Flowchart                                                     11

Illinois Tenants in Foreclosure Flowchart                                   13

Amendments to Chicago Residential Landlord and Tenant Ordinance,
Sections 5-­12-­030 and 5-­12-­080                                          15

Retrieving Building Information in Cook County:
“Is My Building in Foreclosure?”                                            19

LCBH Tenants In Foreclosure Brochure                                        25

Biographies of presenters, Mark Swartz and Allyson Gold                     27

September 16, 2010 CBA PowerPoint, Protecting the Rights of
Tenants in Foreclosure                                                      29




                                                                                 CBA57
CBA58
                                        LCBH 2009 REPORT 
                 Chicago Apartment Building Foreclosures: Impact on Tenants 
                                                    
EXECUTIVE SUMMARY 
 
The foreclosure crisis has received close attention; however, there is insufficient examination of 
how this crisis has negatively affected tenants who rent units from landlords facing foreclosure.  
Particularly in urban areas with large rental populations, the impact of foreclosure on tenants 
has the potential to destabilize entire communities.  Tenants are the invisible victims of 
foreclosure—they are often uninformed of their buildings’ foreclosures, frequently face severe 
violations of their rights, and consequently lose their housing stability. 
 
Through the creation of the Tenants in Foreclosure Intervention Project (TFIP), the Lawyers’ 
Committee for Better Housing (LCBH) sought to advocate on behalf of tenants facing the 
confusion and injustice that often accompanies foreclosure, and to inform tenants, owners, 
community organizers, and policy makers of tenants’ rights during foreclosure.  In 2009, TFIP 
began compiling data regarding foreclosure filings on Chicago’s multi‐family apartment 
buildings in order to generate “Weekly Foreclosure Reports on Chicago Rental Housing.”  The 
2009 Report, “Chicago Apartment Building Foreclosures: Impact on Tenants,” summarizes what 
TFIP has learned from working with the data and day‐to‐day work with tenants and community 
advocates.  
 
FINDINGS  
 
The Report reveals a disconcerting number of multi‐family building foreclosures.  On average, 
more than 125 Apartment Buildings in Chicago went into foreclosure each week in 2009.  
Additionally, the Report discusses the often deplorable living conditions that tenants face 
during foreclosure, along with severe violations of tenants’ rights.  This situation is exacerbated 
by the fact that many tenants, owners, and lenders are unaware of the rights that tenants 
retain during foreclosure.  Furthermore, high rates of foreclosure and REOs [bank‐owned 
properties] are likely to lead to a loss of affordable housing in Chicago, deteriorating the 
foundation of entire communities. 
 
Foreclosures on Apartment Buildings in 2009:  The foreclosure crisis is affecting thousands 
more renters than homeowners in the City of Chicago.  In 2009, there were over 4,000 more 
multi‐family building units impacted by foreclosure than single‐family and condominium units. 
Overall, there were 6,560 new multi‐family building foreclosures in the City of Chicago.  These 
properties had a total of 20,691 units, averaging slightly more than three units per filing. 
 




                                                                                            CBA59
Building Deterioration and Violations of Tenant Rights:  Even tenants in good standing are at 
risk of losing their housing at every step of the foreclosure process due to unsafe living 
conditions and threats of illegal lockout.  There is a significant period of time during the 
foreclosure process where owners may have effectively abandoned the property but lenders 
refuse to take responsibility for maintaining rental units.  This lapse in building management 
essentially leaves tenants, many of whom faithfully upheld their responsibilities as tenants, 
without any mode of recourse for building code violations and threats to their safety.  
 
Lack of Awareness about Tenants Rights:  Many receivers, lenders, realtors, and new owners 
continue to believe that they have no obligation to maintain the property and that they have 
the right to remove tenants simply because of the foreclosure. 
 
Communities in Distress:  The bulk of Apartment Buildings and Big Buildings foreclosure filings 
in 2009 are located in lower‐income, minority communities.  The data shows high rates of 
foreclosure and units impacted in historically Black communities such as South Shore and 
Austin that present a very real threat to community stability.  Since buildings in lower‐income 
minority communities are likely to sit vacant longer, the most significant risk to the loss of 
Chicago’s affordable rental stock is likely to be in those communities.  Due to the foreclosure 
crisis, the shortage of affordable housing in Chicago will almost certainly be more severe than 
previously estimated. 
 
ABOUT LCBH 
 
LCBH has been in operation for 30 years.  Its mission is to promote safe, fair, affordable 
housing, free from discrimination for low‐income Chicagoans through legal representation, 
education, supportive services, and advocacy.   
 
LCBH’s Tenants in Foreclosure Intervention Project focuses exclusively on the issues facing 
tenants living in buildings in foreclosure. TFIP provides tenants with legal representation, 
informs tenants of their rights and responsibilities during foreclosure, and aids in the search for 
new housing when necessary. Furthermore, TFIP provides community organizations and tenant 
advocates with training on the foreclosure process and tenants’ rights during foreclosure, along 
with an early warning system designed to alert them to recently filed foreclosures on multi‐unit 
buildings.  TFIP is the only program in the Chicago area that focuses solely on the issues facing 
tenants in foreclosure. 




                                                                                            CBA60
                                                     Volume 1, Issue 2

                                                     RHOPI News
                                                     Quarterly updates on regional efforts to solve the
                                                     foreclosure crisis

Families enjoy NSP-                       example, Alberto Fret and his family     being approved, and all demolition
                                          moved into their NSP rehabbed            and construction is anticipated to
rehabbed homes in                         property in August of 2009—just in       be completed by August 2010. The
Cicero                                    time for an expanding family, as the     homes will be offered to NSP pre-
                                          Frets welcomed a new daughter the        approved applicants. To ensure the
Regional HOPI                             day before closing on their property.    monthly payment is affordable for new
                                                                                   homeowners, the homes will be sold
                                          Other rehabs include the new home of     at an affordable price that ensures
                                          Cynthia Young, who leveraged an FHA      that the total debt-to-income ratio is
                                          203K loan with Cicero’s rehabilitation   no more than 41% and will involve a
                                          assistance and is enjoying “the home     down payment assistance subsidy of
                                          of her dreams.”                          20% of purchase price, secured by a
                                                                                   lien.
                                          Others that have successfully gone
                                          through the Town’s NSP Down              NSP1 Makes a Difference
                                          Payment Assistance Program and
                                          are now new homeowners include           Tom Tomschin, NSP Program
The Town of Cicero is working             Erika Lopez, Sonia Garcia, the Tovar     Manager, and Ruperto Deloera,
diligently to meet federal deadlines      family, and Emmanual Abarca. Isidro      NSP Loan Officer, are positive about
to fully commit $2 million in             Ruiz and the Medina family will soon     the contribution NSP1 has made to
Neighborhood Stabilization Program        be added to the list as they await the   Cicero families and communities and
(NSP) funds by September 2010.            rehabilitation of their properties.      appreciative of the work of Omar
To date, $954,892 dollars have                                                     Maani and S. Sam Joh of Presidio
been committed—46% of their NSP           In addition to these success stories,    Capital, LLC for the construction
allocation. Cicero has focused its        two other families will benefit from     management, engineering, and
efforts on homeownership assistance,      Cicero’s Down Payment Assistance         architectural designs of the properties.
residential new construction and          Program, pending their home closings:    With clearly identified work plans, strict
residential rehab.                        Eduardo Muñoz and Jacqueline             work schedules, creative solutions
                                          Torres.                                  to problems, and budget control,
Down Payment Assistance Program                                                    Presidio Capital, LLC has supported
and Residential Rehab                     To date, eleven Down Payment             the town’s efforts to meet statutory
                                          Assistance offers have been accepted,    deadlines and maintain the goal of
Cicero’s NSP Down Payment                 and families have already moved into     the program—“decent and affordable
Assistance Program provides pre-          six of those homes. Four of these        homeownership.”
qualified buyers who identify and         families have incomes at or below
purchase foreclosed homes in              50% of area median income and all
Cicero’s Target Area with a down          borrowers have affordable monthly
                                                                                     In This Issue
payment assistance loan of 20% of         mortgage payments that, when               •   Families enjoy NSP-rehabbed
the purchase price of a home, up to       combined with other debts, are 41% or          homes in Cicero
$35,000. The loan is interest-free and    less of their monthly income.              •   TARP-Supported Banks
structured so that if borrowers stay in                                                  Reduced Lending in Chicago,
the home for ten years or more, the       New Construction                               New Data Show
loan is fully forgiven. Buyers can also                                              •   Thirty percent of Cook County
receive a rehabilitation loan of up to    Cicero’s plan for new construction             multifamily mortgages at risk of
$25,000 and a grant of up to $30,000      involves the identification and                foreclosure, says new report
to abate lead-based paint hazards.        purchase of three blighted properties      •   Chicago Apartment Building
                                          in order to demolish the properties            Foreclosures: Impact on Tenants
To date, six families have moved into     and build four newly constructed           •   Circuit Court of Cook County
homes with the benefit of the Down        homes in their place. Designs for              launches Foreclosure Mediation
Payment Assistance Program. For           the new properties are currently               Program
                                                                                                            CBA61
TARP-Supported Banks                          decline in predominantly white         Thirty percent of Cook
                                              areas, with a 53.7 percent decline
Reduced Lending in                            in communities of color compared       County multifamily
Chicago, New Data                             to 20.3 percent decline in white       mortgages at risk of
                                              communities.
Show                                                                                 foreclosure, says new
Woodstock Institute                                                                  report
                                           • The drop in prime lending for
                                           neighborhoods of color was even
                                                                                     DePaul University Institute for
                                           steeper for refinance loans that allow    Housing Studies
                                           borrowers to take advantage of
                                           lower interest rates or access home
                                           equity. Such lending declined by
                                           66.4% in neighborhoods of color, but
                                           declined by a mere 13.9% in white
                                           neighborhoods.
                                               o In Chicago, prime refinance
                                               lending actually increased in
                                               predominantly white communities
A report released by a multi-state             while prime refinance lending in
collaboration of regional research,            communities of color declined by
policy and advocacy organizations              49.1 percent.                         The Institute for Housing Studies
documents the dramatic decrease in                                                   at DePaul University has released
low-cost home loans made between                                                     a working paper, The Multifamily
2006 and 2008, and highlights that         • Between 2006 and 2008 the share         Housing Market and Value-at-Risk
communities of color were hardest hit      of prime refinance loans made             Implications for Multifamily Lending.
by the drop-off in lending.                in communities of color dropped           This new research reveals significant
                                           35% whereas the share of these            price declines during the past three
The report, Paying More for the            loans made in predominantly white         years, a sharp increase in the
American Dream IV, examines                communities increased 11%.                rate of foreclosures in 2009, and
the mortgage lending patterns of               o In Chicago in 2006,                 a burgeoning risk for future rental
banks, including the nation’s four             neighborhoods of color received       property mortgage defaults in Cook
largest financial institutions, in seven       10.5 percent of the region’s prime    County.
metropolitan areas in the United               refinance loans. By 2008, the
States: Boston, Charlotte, Chicago,            number of regional prime refinance    The research found:
Cleveland, Los Angeles, New York               loans going to communities of
City, and Rochester, NY.                       color declined by nearly 46 percent   • Prices declined 46 percent for small
                                               to 5.7 percent.                       rental buildings (2-6 units) from their
                                                                                     peak in the second quarter of 2006 to
Key findings include:                                                                the second quarter of 2009. Prices
• Prime mortgage lending in                • The nation’s four largest banks—        dropped 26 percent for large rental
communities of color declined more         Bank of America, Citibank,                properties (7+ units) from their peak
than twice as much as it did in            JPMorgan Chase and Wells Fargo—           in the second quarter of 2007 to the
predominantly white communities.           demonstrated similar lending patterns,    second quarter of 2009.
While prime lending decreased              targeting white communities for new
between 2006 and 2008 in all seven         refinance loans while pulling out         • Falling property values have put
metropolitan areas, the decline            of neighborhoods of color. Prime          more than $13 billion in Cook County’s
in lending was much greater in             refinance lending by these four banks     multifamily mortgages —30 percent of
neighborhoods where people of              in white communities increased by         the area’s total outstanding multifamily
color comprised 80% or more of             32.2% between 2006 and 2008, but          mortgage debt—at risk of default. The
the residents. Neighborhoods               decreased in neighborhoods of color       value at risk is $12.6 billion for small
of color experienced a 60.3%               by 33.1%.                                 rental buildings and $747 million for
decrease in lending, compared to a              o In Chicago, the top four banks     large rental properties in the county.
28.4% decrease in lending in white              increased their refinance lending
neighborhoods, where people of                  to white communities by 62           • Price declines and deleveraging
color comprised less than 10% of the            percent between 2006 and 2008,       imply less multifamily mortgage
residents.                                      but saw their refinance lending to   lending in Cook County. New
     o In Chicago, the decline in prime         communities of color decline by      issuance of multifamily mortgage debt
     lending in neighborhoods of color          24.1 percent over the same period.   on large properties in Cook County fell
     was 2.6 times greater than the                                                  45 percent to $2.7 billion from 2007 to
                                                                                                             CBA62
2008 and fell again in 2009. Similarly,     The foreclosure crisis has received
new issuance of multifamily mortgage        close attention; however, there is           Foreclosures on Apartment
debt on small properties fell 39 percent    insufficient examination of how this         Buildings in 2009: The foreclosure
to $5 billion during the same period        crisis has negatively affected tenants       crisis is affecting thousands more
and plummeted even further in the first     who rent units from landlords facing         renters than homeowners in the City
half of 2009.                               foreclosure. Particularly in urban           of Chicago. In 2009, there were over
                                            areas with large rental populations,         4,000 more multi-family building units
• As of year end 2009, multifamily          the impact of foreclosure on tenants         impacted by foreclosure than single-
foreclosures on both small 2-6 unit         has the potential to destabilize             family and condominium units. Overall,
rental properties and large 7+ unit         entire communities. Tenants are the          there were 6,560 new multi-family
rental properties are estimated to          invisible victims of foreclosure—            building foreclosures in the City of
have impacted more than 32,000 units        they are often uninformed of their           Chicago. These properties had a total
in the Cook County rental market.           buildings’ foreclosures, frequently          of 20,691 units, averaging slightly
In contrast, there are currently            face severe violations of their rights,      more than three units per filing.
about 38,000 single family units in         and consequently lose their housing
foreclosure in Cook County.                 stability.                                   Building Deterioration and
                                                                                         Violations of Tenant Rights: Even
• As local lending institutions scaled      Through the creation of the Tenants          tenants in good standing are at risk
backed lending to large rental              in Foreclosure Intervention Project          of losing their housing at every step
properties in 2008 and 2009, Freddie        (TFIP), the Lawyers’ Committee for           of the foreclosure process due to
Mac and Fannie Mae have assumed             Better Housing (LCBH) sought to              unsafe living conditions and threats of
most of the multifamily mortgage            advocate on behalf of tenants facing         illegal lockout. There is a significant
market in Cook County. The two              the confusion and injustice that often       period of time during the foreclosure
GSEs’ combined share of the rental          accompanies foreclosure, and to              process where owners may have
property mortgage market in Cook            inform tenants, owners, community            effectively abandoned the property but
County has grown from 10 percent in         organizers, and policy makers of             lenders refuse to take responsibility
2000 to nearly 70 percent in 2009.          tenants’ rights during foreclosure.          for maintaining rental units. This lapse
                                            In 2009, TFIP began compiling data           in building management essentially
• For one in eight rental apartment         regarding foreclosure filings on             leaves tenants, many of whom
units, revenues are falling below           Chicago’s multi-family apartment             faithfully upheld their responsibilities
operating costs for owners. Owners          buildings in order to generate               as tenants, without any mode of
of about 74,000 rental units in             “Weekly Foreclosure Reports on               recourse for building code violations
Chicago (13 percent of the market)          Chicago Rental Housing.” The 2009            and threats to their safety.
are currently spending more to              Report, “Chicago Apartment Building          Lack of Awareness about Tenants
operate buildings than they are             Foreclosures: Impact on Tenants,”            Rights: Many receivers, lenders,
collecting in revenues. These units         summarizes what TFIP has learned             realtors, and new owners continue to
are significantly at-risk of decreased or   from working with the data and day-to-       believe that they have no obligation
discontinued maintenance.                   day work with tenants and community          to maintain the property and that
                                            advocates.                                   they have the right to remove tenants
                                                                                         simply because of the foreclosure.
                                            FINDINGS
                                            The Report reveals a disconcerting           Communities in Distress: The
Chicago Apartment                           number of multi-family building              bulk of Apartment Buildings and
                                                                                         Big Buildings foreclosure filings in
Building Foreclosures:                      foreclosures. On average, more than
                                                                                         2009 are located in lower-income,
                                            125 Apartment Buildings in Chicago
Impact on Tenants                           went into foreclosure each week              minority communities. The data
                                            in 2009. Additionally, the Report            shows high rates of foreclosure and
Lawyers’ Committee for Better                                                            units impacted in historically Black
                                            discusses the often deplorable
Housing                                     living conditions that tenants face          communities such as South Shore and
                                            during foreclosure, along with severe        Austin that present a very real threat
                                            violations of tenants’ rights. This          to community stability. Since buildings
                                            situation is exacerbated by the fact         in lower-income minority communities
                                            that many tenants, owners, and               are likely to sit vacant longer, the
                                            lenders are unaware of the rights that       most significant risk to the loss of
                                            tenants retain during foreclosure.           Chicago’s affordable rental stock is
                                            Furthermore, high rates of foreclosure       likely to be in those communities. Due
                                            and REOs [bank-owned properties]             to the foreclosure crisis, the shortage
                                            are likely to lead to a loss of affordable   of affordable housing in Chicago will
                                            housing in Chicago, deteriorating the        almost certainly be more severe than
                                            foundation of entire communities.            previously estimated.
                                                                                                                 CBA63
Circuit Court of Cook                        Under the mediation program, eligible
                                             homeowners who have pending
County launches                              foreclosures in the Circuit Court
Foreclosure Mediation                        of Cook County will be given an
                                             opportunity to meet with an on-site
Program                                      housing counselor and an on-site
Housing Action Illinois                      attorney free of charge. Housing
                                             counselors will assist homeowners
The Circuit Court of Cook County             who may be eligible for the Home
announced on April 20, 2010 the              Affordable Modification Program
launch of a court-based mediation            (HAMP) or a servicer-run loan
program for foreclosure cases filed          modification while attorneys will assist
in Cook County in response to the            homeowners in determining if they
increasingly rising foreclosure rate.        may have possible defenses to the
Plaintiffs filing residential foreclosures   foreclosure. Several geographically
after April 12, 2010 must notify             diverse HUD certified counseling
homeowners in the summons about              agencies in Cook County have been
their option to pursue mediation. The        selected to supply counselors to the
program will provide free housing            program. These counselors will be
counseling and legal services to Cook        both housed at the Court’s on-site
County homeowners with the goal              space as well as at their respective
of resolving their cases quickly and         agencies for follow up visits.
avoiding foreclosure when possible.
                                             If the case is assigned to mediation,
The mediation program is structured to       the mediation will follow the guidelines
allow for a range of diverse outcomes        set forth in Circuit Court Rule 21 for
from sustainable loan modifications to       Chancery Court Annexed Mediation.
“graceful exits” such as:
                                             The Circuit Court of Cook County has
•   Deed-in-lieu transactions, where         awarded four separate contracts to
    the homeowner voluntarily                agencies that will be involved with
    transfers the deed to the bank           administrating the program, including
    instead of foreclosure;                  the Illinois Housing Development
•   Short-sales, where a bank allows         Authority (IHDA), the Chicago
    a home to be sold for less than          Community Trust, the Chicago Bar
    what is owed on the loan;                Foundation and the public relations
•   Consent foreclosure agreements,          firm, Carolyn Grisko & Associates.
    where the homeowner will not             IHDA has been selected to be the
    contest the foreclosure, further         administrative agent for the housing
    preventing a deficiency judgment,        counseling component of the program,
    or;                                      while the Chicago Community
•   Agreements for rental of the             Trust has been approved to be the
    property, where the homeowner            administrative agent for the outreach
    agrees to transfer their property        component.
    to their lender in exchange for a
    rental lease.                            Currently, homeowners who have
                                             received a summons can call the
In order to participate in the mediation     toll-free help line at 877.895.2444 (or
program, homeowners must:                    312.836.5222 TDD) to schedule a free
                                             meeting with a housing counselor. For
                                             more information about the program,
•   be residents of Cook County              visit
•   have received a foreclosure              www.cookcountyforeclosurehelp.org.
    summons from the Cook County
    Court
•   live in the building in foreclosure
    – which may be a single-family
    home, single-family condominium
    or apartment building with four or
    fewer units.
                                                                                        CBA64
                            Public Law 111-22, Effective Date May 20, 2009
                   TITLE VII--PROTECTING TENANTS AT FORECLOSURE ACT
 Clarified and extended by, H. R. 4173, H. R. 4173—829 sent to the President for signature July 15, 2010
                              and signed by the President on July 21, 2010
                                                       SEC. 701. SHORT TITLE.
        This title may be cited as the `Protecting Tenants at Foreclosure Act of 2009'.
                   SEC. 702. EFFECT OF FORECLOSURE ON PREEXISTING TENANCY.
         (a) In General- In the case of any foreclosure on a federally-related mortgage loan or on any dwelling or
         residential real property after the date of enactment of this title, any immediate successor in interest in such
         property pursuant to the foreclosure shall assume such interest subject to--
                  (1) the provision, by such successor in interest of a notice to vacate to any bona fide tenant at least 90
                  days before the effective date of such notice; and
                  (2) the rights of any bona fide tenant, as of the date of such notice of foreclosure--
                           (A) under any bona fide lease entered into before the notice of foreclosure to occupy the premises
                           until the end of the remaining term of the lease, except that a successor in interest may terminate
                           a lease effective on the date of sale of the unit to a purchaser who will occupy the unit as a
                           primary residence, subject to the receipt by the tenant of the 90 day notice under paragraph (1); or
                           (B) without a lease or with a lease terminable at will under State law, subject to the receipt by the
                           tenant of the 90 day notice under subsection (1),
         except that nothing under this section shall affect the requirements for termination of any Federal- or State-
         subsidized tenancy or of any State or local law that provides longer time periods or other additional protections
         for tenants.
         (b) Bona Fide Lease or Tenancy- For purposes of this section, a lease or tenancy shall be considered bona fide
         only if--
                  (1) the mortgagor or the child, spouse, or parent of the mortgagor under the contract is not the tenant;
                  (2) the lease or tenancy was the result of an arms-length transaction; and
                  (3) the lease or tenancy requires the receipt of rent that is not substantially less than fair market rent for
                  the property or the unit's rent is reduced or subsidized due to a Federal, State, or local subsidy.
(c) Definition- For purposes of this section, the term `federally-related mortgage loan' has the same meaning as in section
3 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2602). For purposes of this section, the date of a
notice of foreclosure shall be deemed to be the date on which complete title to a property is transferred to a
successor entity or person as a result of an order of a court or pursuant to provisions in a mortgage, deed of trust,
or security deed.
                    SEC. 703. EFFECT OF FORECLOSURE ON SECTION 8 TENANCIES.
        Section 8(o)(7) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)(7)) is amended--
                (1) by inserting before the semicolon in subparagraph (C) the following: `and in the case of an owner who
                is an immediate successor in interest pursuant to foreclosure during the term of the lease vacating the
                property prior to sale shall not constitute other good cause, except that the owner may terminate the
                tenancy effective on the date of transfer of the unit to the owner if the owner--
                                 (i) will occupy the unit as a primary residence; and
                                 (ii) has provided the tenant a notice to vacate at least 90 days before the effective date of
                                 such notice.'; and
                (2) by inserting at the end of subparagraph (F) the following: `In the case of any foreclosure on any
                federally-related mortgage loan (as that term is defined in section 3 of the Real Estate Settlement
                Procedures Act of 1974 (12 U.S.C. 2602)) or on any residential real property in which a recipient of
                assistance under this subsection resides, the immediate successor in interest in such property pursuant to
                the foreclosure shall assume such interest subject to the lease between the prior owner and the tenant and
                to the housing assistance payments contract between the prior owner and the public housing agency for
                the occupied unit, except that this provision and the provisions related to foreclosure in subparagraph (C)
                shall not shall not affect any State or local law that provides longer time periods or other additional
                protections for tenants.
                                                            SEC. 704. SUNSET.
        This title, and any amendments made by this title are repealed, and the requirements under this title shall
        terminate, on December 31, 2012 2014.
        http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_public_laws&docid=f:publ022.111.pdf, 123 STAT. 1632, 1660;
        http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h4173enr.txt.pdf
                                                                                                                                    CBA65
CBA66
S8978                                 CONGRESSIONAL RECORD — SENATE                                            August 6, 2009
than the Minnesota winter. He mount-         may be terminated earlier only if the       bility to obey the law. Families in
ed a legal challenge based on a clear        property is transferred to someone who      these precarious circumstances should
principle: no Minnesotan should be dis-      intends to reside in the property and       not be forced individually to assert
enfranchised. As chairman of the Na-         only if the tenants are given at least 90   their rights under the law.
tional Republican Senatorial Com-            days’ notice of the fact of such sale.         Mr. DODD. I agree with Senator
mittee, I was proud to support Norm as       Successors in interest to properties        KERRY. Again, I thank the Senator for
he pursued his case in the courts. And       with section 8 housing choice voucher       bringing the original legislation for-
once the courts had spoken, I respected      tenants automatically assume the obli-      ward and working with me to enact it.
the grace with which he conceded the         gations of the former owner under the       I look forward to working with Senator
race, and the optimism he has shown          housing assistance payments contract.       KERRY and all my colleagues to ensure
for his own future, and that of our            These basic protections are the law       that families’ rights under the law are
country.                                     for tenants in every State, unless          known and protected.
  Norm accomplished much in Wash-            States have laws or practices that pro-                   f
ington, but I think he remains proud-        vide greater protections. I want to ask
                                             Senator KERRY, the original author of                 DROUGHT RELIEF
est of what he achieved closer to home.
After Minnesota’s hockey team moved          the act, if I have correctly expressed        Mr. CORNYN. Mr. President, today I
to my home state of Texas back in 1993,      the intent of this legislation.             speak on behalf of the farmers and
Mayor Norm Coleman of St. Paul led             Mr. KERRY. Mr. President, I was           ranchers of Texas. Like millions of
the effort to bring the National Hockey      pleased to work with Senator DODD to        Americans in other States, Texans love
League back to the Twin Cities. Since        enact this legislation to help tenants      the land. From the hill country to the
the first puck dropped in 2000, the Min-     affected by foreclosures.                   river valleys—from the panhandle to
nesota Wild have sold out every game           No one in the Senate has worked           the gulf coast—our land helps define
they have played, and every fan owes a       harder to fight against the scourge of      who we are.
debt of thanks to Norm Coleman.              foreclosures than Chairman DODD. As a         And for many Texans, the land is
  I too am thankful for Norm Coleman,        former member of the Senate Banking         their livelihood. One in seven jobs in
because he set a good example for all of     Committee, I know Chairman DODD has         our State is tied to agriculture. We
us. He never let public service go to his    tirelessly fought to assist low and mod-    lead the Nation in several crop and
head. He always put his faith and fam-       erate-income families and to help ten-      livestock    industries—including      the
ily first. He fought hard to keep his        ants who need protections from fore-        production of cattle and cotton. Texas
seat, but never failed to keep his cool.     closures or unscrupulous landlords.         farmers and ranchers help feed and
  I wish Norm and Laurie the very            Without his efforts, families in Con-       clothe Americans in every State—and
best, as their journey together con-         necticut and across the Nation would        in dozens of countries around the
tinues.                                      not have access to critically needed        world.
              f                              protections and many more American            Our farmers and ranchers are tough
                                             families would be facing foreclosure.       people—and they are seeing tough
     PROTECTING TENANTS AT                     I agree with Chairman DODD that it        times. Central and south Texas is expe-
 FORECLOSURE IMPLEMENTATION                  is important that persons and entities      riencing some of the driest conditions
  Mr. DODD. Mr. President, for too           acquiring properties by foreclosure fol-    in the country today. Seventy counties
long, tenants have been the innocent         low the law, and that tenant families       in our State are experiencing extreme
victims of the foreclosure crisis.           obtain the benefits the law was in-         or exceptional drought—the two worst
Countless tenants across the country         tended to provide.                          classifications made by the USDA.
have been forced to leave their homes          I also agree with Chairman DODD’s         These areas represent 42.5 million
simply because their landlords were          statement of the intent of the legisla-     acres—about 25 percent of Texas—and
unable to pay their mortgages. Too           tion. As the chairman stated, the law       nearly equal to the total land area of
often, these tenants had no idea that        was intended to provide all bona fide       New England.
the property was even under fore-            tenants, who began renting prior to           The drought has severely impacted
closure until the authorities arrived at     transfer of title by foreclosure of their   Texas farmers and ranchers. According
their door to inform them that they          rental property, be given at least 90       to one recent study, economic losses
must vacate the property immediately.        days’ notice before being required to       will reach $3.6 billion by the end of this
  I was pleased to work with Senator         vacate the property. In addition, these     year—a little less than $1 billion in
KERRY to include the Protecting Ten-         bona fide tenants are allowed to re-        livestock losses—and the rest in crop
ants at Foreclosure Act of 2009 in the       main in place for the remainder of any      losses.
recently enacted Helping Families            leases entered into prior to the transfer     A few weeks ago, I met with some
Save their Homes Act. This new law           of title by foreclosure. These leases       ranchers and farmers in San Angelo,
protects tenants facing evictions due        may be terminated earlier only if the       TX. They shared with me how drought
to foreclosure by ensuring they can re-      property is transferred to someone who      conditions were devastating produc-
main in their homes for the length of        intends to reside in the property and       tion—even as the recession weakened
the lease or, at the least, receive suffi-   only if the tenants are given at least 90   demand. They also asked me a ques-
cient notice and time to relocate their      days’ notice of the fact of such sale.      tion: Where was the money Washington
families and lives to a new home. The        Successors in interest to properties        promised to help them through these
full Senate approved the bill on May 6,      with section 8 housing choice voucher       tough times?
2009, and President Obama signed it          tenants automatically assume the obli-        Their question is the same question I
into law on May 20, 2009.                    gations of the former owner under the       am asking today: Where is the money
  These protections are so important         Housing Assistance Payments con-            Congress authorized last year for the
that my colleague Senator KERRY and I        tract.                                      Supplemental Revenue Assurance Pro-
want to ensure that families and mort-         Both the Federal Reserve and the De-      gram?
gage holders know their rights and ob-       partment of Housing and Urban Devel-          The SURE Program was included in
ligations under the law.                     opment have acted quickly to issue no-      the farm bill we passed in June of 2008.
  Under the new law, all bona fide ten-      tifications to the entities that they       It received broad bipartisan support. It
ants who began renting prior to trans-       regulate describing the law in the same     created a trust fund of about $3 billion
fer of title by foreclosure of their rent-   way. Their notifications stated how         a year to help farmers and ranchers
al property must be given at least 90        regulated institutions are expected to      during tough times.
days’ notice before being required to        comply with the terms of the act.             Yet despite becoming law more than
vacate the property. In addition, these      These regulatory actions are crucial        a year ago, the SURE Program has still
bona fide tenants are allowed to re-         for the proper implementation of the        not been implemented by the USDA.
main in place for the remainder of any       act because foreclosing entities, who       Not a single farmer or rancher has re-
leases entered into prior to the transfer    often wind up owning the properties         ceived any assistance from the trust
of title by foreclosure. These leases        after the foreclosure, have a responsi-     fund so far. No payments had even been


                                                                                                                   CBA67
CBA68
CBA69
CBA70
                                                 Tenant Foreclosure Intervention Program:
                       AT ALL TIMES TENANT SHOULD REMAIN CURRENT ON RENT TO BENEFIT FROM NEW NOTICE PROVISIONS!

                                                               Lender files a Complaint
                                                                 to Foreclose on the                                       Receiver may be
                                                                      Landlord                                         appointed by the Court at
                       Action required by the
                                                                                                                           Lender’s request
                               Landlord
                                                                                    Lender will continue foreclosure
                                                                                       action against the Landlord


                 Landlord must            Landlord will continue in the
                 notify Tenants              foreclosure proceeding           Judicial Sale Confirmed by the
                  that he is in                                                  Chancery Court and Order
                  foreclosure1                                                    of Possession Entered

   Landlord fails to                                                                    Lender or
  provide notice                                                                       successful bidder
                                                                                      may pursue either:
                                                Supplemental Proceeding
                                                     conducted in the
    Tenant is                                     Chancery/Foreclosure
                                                Court providing a 120 day                       Eviction Proceeding
allowed to break
                                                    stay of eviction or                          conducted in the                        Eviction
lease if Landlord
                                                   remainder of lease,                            Eviction Court                     Proceeding for
does not provide                                                                 OR                                          OR
                                                 whichever is shorter3, 5                       providing a 90-day                   cause if Tenant
     notice2
                                                                                                      notice4, 5                    stops paying rent
                                                                                                                                    conducted in the
                                                                                                                                     Eviction Court
                                                                                                                                      providing a 5-
                                                                          Records shall be sealed7                                     day notice6

                                                                                                                                                   CBA71
1. § 5-12-095(a) of the City of Chicago Residential Landlord Tenant Ordinance:
   If a tenant lives in Chicago in a building that has more than six units or the landlord/owner does
   not live on the premises: within seven (7) days of being served a foreclosure complaint…an owner or
   landlord of a premises that is the subject of the foreclosure complaint shall disclose, in writing, to all
   tenants of the premises that a foreclosure action has been filed against the owner or landlord. Before a
   tenant initially enters into a rental agreement for a dwelling unit, the owner or landlord shall also
   disclose, in writing, that he is named in a foreclosure complaint.
2. § 5-12-095(b) of the City of Chicago Residential Landlord Tenant Ordinance:
   If a tenant lives in Chicago in a building that has more than six units or the landlord/owner does
   not live on the premises: if the owner or landlord fails to comply with this section, the tenant may
   terminate the rental agreement by written notice… if a tenant in a civil legal proceeding against an
   owner or landlord establishes that a violation of this section has occurred, he shall be entitled to recover
   $200.00 in damages, in addition to any other damages or remedies that the tenant may also be entitled.
3. 735 ILCS 5/15-1701(h) Proceedings Against Certain Occupants.
   (1) [Lenders or purchasers may]… at any time during the pendency of the foreclosure and up
        to 90 days after the date of the order confirming the sale, file a supplemental petition for possession
        against a person not personally named as a party to the foreclosure. The supplemental petition for
        possession shall name each such occupant against whom possession is sought and state the facts
        upon which the claim for relief is premised.
   (4) In a case of foreclosure where the occupant is current on his or her rent, or where timely written
       notice of to whom and where the rent is to be paid has not been provided to the occupant, or where
       the occupant has made good-faith efforts to make rental payments in order to keep current, any
       order of possession must allow the occupant to retain possession of the property covered in his or
       her rental agreement (i) for 120 days following the notice of the hearing on the supplemental
       petition that has been properly served upon the occupant, or (ii) through the duration of his or
       her lease, whichever is shorter (provided that any order shall allow the occupant to remain in
       possession for at least 30 days from date of the order). If the occupant has been given timely written
       notice of to whom and where the rent is to be paid, this item (4) shall only apply if the occupant
       continues to pay his or her rent in full during the 120-day period or has made good-faith efforts to
       pay the rent in full during that period. No [lender] … or purchaser who fails to file a supplemental
       petition under this subsection during the pendency of a mortgage foreclosure shall file a forcible
       entry and detainer action against an occupant of the mortgaged real estate until 90 days after a
       notice of intent to file such action has been properly served upon the occupant.
   (But see ¶5, below, for the federal act, Protecting Tenants at Foreclosure Act of 2009)
4. See ¶3 above for 90-day requirements under 735 ILCS 5/15-1701(h)(4), in italics.
5. Protecting Tenants at Foreclosure Act of 2009:
   Purchaser of foreclosed property must honor any leases that tenants may have so long as lease is bona
   fide—not with the child, spouse or parent of former owner; the result of an arm’s length transaction; and
   not substantially less than fair market— and at the very least must provide tenant with 90 days notice.
6. 735 ILCS 5/15-1704(f)(5)(i); 735 ILCS 5/15-1508.5(d)(i): a receiver appointed by the foreclosure court
   or the purchaser of the foreclosed property must—within 21 days— learn the identities of occupants;
   serve occupants and advise them that control of the property has changed hands; provide information as
   to whom to contact for repairs; advise that this is not notice to vacate; and provide occupants with
   foreclosure name and case number. A receiver or purchaser who fails to provide this notice may not
   collect any rent or terminate an occupants tenancy for non-payment of rent, until providing said notice.
7. 735 ILCS 5/15-1701(h)(5)
   The court records relating to a supplemental petition for possession filed under this subsection
   (h)…or relating to a forcible entry and detainer action brought against a tenant … shall be
   ordered sealed and shall not be disclosed to any person.
                            Lawyers’ Committee for Better Housing 
        100 West Monroe, Suite 1800 ∙ Chicago, Illinois 60603  ∙ 312‐347‐7600 ∙ www.lcbh.org 
                                                                                              CBA72
CBA73
CBA74
CBA75
CBA76
 

             Retrieving Building Information in Cook County:
                     “Is My Building in Foreclosure”?
    If Tenant has already received mailings/postings with a Chancery (CH) case number,
    SKIP to STEP 3. 

STEP 1: Find the property’s Property Identification Number (PIN)
Go to the City News Chicago’s                  Community       Information    Technology   website    at
http://www.newschicago.org/.

     •   If Tenant lives in the City of Chicago: Under the “Search By Address” section, fill in Tenant’s
         Street No., Direction, and Street name and click on “Find Property!”
     •   If Tenant lives outside of Chicago but still in Cook County: Click on the “Single Building”
         link on the left-hand column under “Cook County Data” before entering address information,
         including the City Name. In this example below, the search will locate the PIN and other
         property information for the Adler Planetarium:

                                                  http:www newschicago.org/

                     STEP 1




On the search results page, you will see the PIN, as well as the address for the building. Write down
the PIN for the building:




Once on the search results page click on “All Information” directly under the heading “Search
Results” to insure that you are viewing the most comprehensive data. Save a copy of this page as a
PDF file for future reference.
       NOTE: If Tenant lives in a condo, you may have trouble obtaining the PIN on City News.
       Instead, check the Cook County Assessor’s Office website: http://cookcountyassessor.com. On
       this site you can input the address under Property Search and retrieve the PIN.


                                                                                              CBA77
 


STEP 2: Look up document recordings by PIN at the Cook County Recorder of
Deed’s Website
Go to the Cook County Recorder of Deeds website located at www.ccrd.info and click the link labeled
“Property Identification Number (PIN) Search”:




                                                                     Click!




On the search page, fill in the PIN number only, and then click “Search > > ”. (If you have a 10 digit
PIN, then fill in “0000” for the final four digits):




                                                     Enter your PIN here




                                                                                            CBA78
 

Look for a document type called “LIS PENDENS”
In the example below, Chicago has given notice of lis pendens that may affect title to the Adler
Planetarium property:




                                                   LIS
                                                   PENDENS



         NOTE: A lis pendens is a public notice filed against a specific property that a legal action is
         pending that may affect the title to the property. If a lis pendens was filed by a Bank or Servicer
         (look under heading “Grantor/Trust No.”), it is a sign that this notice may be related to a
         pending foreclosure suit. Click the “Document No” link to the left of the “Document Type” to
         open detailed information on the lis pendens:




                                        Write down this number




    NOTE: Recent filings will often specifically say “LIS PENDENS FORECLOSURE.” When
    checking filings that do not specify the type of lis pendens, you cannot be certain that this document
    is related to a pending foreclosure. However, if a Bank or Mortgage Lender is named as grantor, it
    is likely a foreclosure lis pendens.




                                                                                                 CBA79
 

     If records are found, write down the Document Number, Dates Executed and Recorded, and
     the name of the Grantor and Grantee for any lis pendens that have been filed with the
     Recorder of Deeds by a Bank or Mortgage Lender within the last 2 years.

        NOTE: Recent filings will often specifically state the Chancery case number. If not, the
        only way to confirm the court case number associated with the lis pendens is to view the
        lis pendens document at the Cook County Recorder of Deeds Office. The Cook County
        Recorder of Deed’s downtown office is located at 118 North Clark Street, Room 120,
        Chicago, Illinois 60602. Inform the Tenant to ask the information desk for the public
        computer terminals to view the lis pendens or for the records request room to request
        copies of the lis pendens. Once the tenant is able to view the lis pendens, locate the court
        case number associated with the lis pendens. If the lis pendens deals with a foreclosure
        matter, the lis pendens will state that it is about a foreclosure and the case number will
        contain the letters “CH.” Write down this case number and SKIP to STEP 3.

        •   OR, if Tenant believes that this is the only foreclosure case associate with Landlord,
            proceed with the information obtained on the Cook County Recorder of Deeds
            Website. Searching the names of the Grantor and Grantee on Clerk of the Circuit
            Court of Cook County’s website with knowledge of when the lis pendens was filed
            will likely lead you to the correct court case number. However, when landlords have
            multiple foreclosures with the same lender, it is possible that a search of the Clerk of
            Court website will find an incorrect case number.
            SKIP to STEP 3.


OR: Use a Pay Service to Avoid a Trip to the Recorder of Deeds

For example, CheckIllinois at http://consumer.public-record.com/ allows Tenants to search for records
related to their building by PIN for a modest fee. Make sure to type in all the digits of the PIN and
then click “Start Your Search”:




                                                                                              CBA80
 




CheckIllinois may be able to determine whether a building is in FORECLOSURE and provide you with
the CHANCERY Court case number. If not, you have the option of deciding to make the trip to the
Recorder of Deeds (described above) or paying for access to a more complete record on this website.
(There may be many other search sites where you can obtain information, this subsection is provided
as an example of one private party option you might use).

STEP 3: Go to the Clerk of Circuit Court’s Website
The Clerk of the Circuit Court of Cook County’s website is located at
http://www.cookcountyclerkofcourt.org/. Follow the link for “Online Case Info” and click “Full
Electronic Docket Search”:




                                    CLICK!




                                                                                         CBA81
 


If you have the Case Number: Under Division Name, select CHANCERY. Fill in the case number
under “Search by Case Number” and click the search button. In the search results, you will find the
most recent activity and the next court date:




                                                                          Select
                                                                          “CHANCERY”

      Enter
      Case
      Number



If search produces an electronic docket for this case, save a copy of the docket to a PDF file

If you do not have a Case Number: Under Division Name select CHANCERY. Scroll down to
“Search by Name” directly under “Search by Case Number.” Here, you will select “Defendant” and
type in the “Grantee’s” name you recorded from the Cook County Recorder of Deeds website:
                                       Plaintiff:   Defendant:                Select
                                   Name:                                      Defendant
                                             Search Now   Reset



If any results show a Plaintiff that appears to be a Bank or Servicer, or any of the Dates Filed match
dates from the lis pendens, click on the Case Number and view the Case Information Summary. Save
this summary as a PDF file if it contains information related to a pending foreclosure.

**If neither Record Information Services nor Cook County Recorder of Deeds and Clerk of
Circuit Court websites render any foreclosure information regarding a tenant’s building, than it
is most likely NOT in foreclosure.




                                                                                                 CBA82
        MONITOR YOUR                                      This brochure is a summary of general issues facing
                                                          tenants in foreclosure and may not address your
         BUILDING’S                                       specific situation. The information contained in this
                                                          brochure does not replace the advice or representation
        FORECLOSURE                                       of an attorney licensed to practice in the State of Illinois.
                                                          Because of this, and because of unanticipated changes
                                                          in the law, Lawyers’ Committee for Better Housing or
                                                          the person, institution, or agency who gave you this             Tenants in Foreclosure Intervention Project
ONLINE
                                                          brochure makes no claim as to whether the use of this
IF YOU HAVE THE CASE NUMBER

    Clerk of Circuit Court’s Website
                                                          brochure will achieve the result you desire and disclaim
                                                          any responsibility for the consequences of any action
                                                          taken in reliance upon the information in this brochure.
                                                                                                                          FORECLOSURE
    www.cookcountyclerkofcourt.org
     Follow the Link for “Online Case Info” and click
    “Full Electronic Docket Search”
                                                                                                                           DOESN’T MEAN
    Select “Chancery” division and enter the case
    number
                                                                                                                          “GET OUT NOW”
IF YOU DON’T HAVE THE CASE NUMBER                                                                                             YOU HAVE THE RIGHT TO:
    Visit the LCBH online at www.lcbh.org to view
    detailed instructions
                                                                                                                          Know if your building is in foreclosure

                                                                                                                          Stay until your lease ends
IN PERSON OR BY PHONE
    To obtain building PIN contact the Cook County                                                                        90 Days’ Notice before you have to move
    Assessor’s Office:
      118 N. Clark St, Room #320                                                                                          Live in a safe & properly maintained unit
      Chicago, IL
      312-603-7550
                                                                                                                          Uninterrupted utility service
    Check building’s foreclosure status at the Cook
    County Recorder of Deeds Office (you will need                                                                        Notice of management/ownership change
    the PIN number):
        118 N. Clark St, Room #120
        Chicago, IL                                          FOR LEGAL ASSISTANCE CONTACT                                 Seal foreclosure-related court records
        312-603-5050                                        Lawyers’ Committee for Better Housing
   * If there is a foreclosure Lis Pendens, ask for the
                                                                       100 W. Monroe                                      Alert tenant advocate to signs like these:
   case number
                                                                          Suite 1800
    Look at the case file by going to the Circuit Court               Chicago, IL 60603
    of Cook County, Chancery Division (you will need                Phone: (312) 347-7600
    the case number):
       50 W. Washington St, Room #802
                                                                      Fax: 312-347-7604
       Chicago, IL                                                      www.lcbh.org
       312-603-5133
                                                           The Tenants in Foreclosure Intervention Project is funded in
    For non-legal tenant assistance, contact:                            part by a generous grant from
      Metropolitan Tenants Organization                                  The Chicago Community Trust
      2159 S. Canalport Suite 2-B2
      Chicago, IL
      312-292-4988
                                                                     August, 2010; see www.lcbh.org for latest version
                                                                                                                                                     CBA83
   FORECLOSURE TIMELINE &                             CHICAGO RESIDENTIAL                                        TENANTS’ RIGHTS:
   LANDLORD/TENANT DUTIES                          LANDLORD TENANT ORDINANCE                                    AFTER FORECLOSURE

Foreclosures sometimes last a year                In Chicago, the Residential Landlord Tenant         The Protecting Tenants at Foreclosure Act
or more:                                          Ordinance (“RLTO”) covers all non-owner -           of 2009 (“PTFA”) is a federal law
    After the landlord is served with a           occupied buildings and all buildings with more       After the Order Confirming Sale all tenants –
    foreclosure complaint, at least 7             than 6 units. The RLTO also covers rental            including month-to-month tenants – must be
    months may pass before the judicial           condos.                                              given at least 90 days’ written notice to
    sale                                                                                               vacate
                                                  BUILDING MAINTENANCE                                     If you have a bona fide (valid) lease a
Some Foreclosures are much shorter:               If covered by the RLTO, you may write a 14-              new purchaser must honor the lease
  If the landlord and the bank work out an        Day Letter to the landlord listing bad conditions        Exception: if a new purchaser will
  agreement or the building is sold, the          and the amount of rent you will reduce if                occupy the unit as a primary residence,
  case may end sooner or be dismissed             problems are not fixed. Save copies and proof            the lease may be terminated, but you
                                                  of delivery                                              must be given 90 days’ written notice
                                                       If the landlord fails to fix the problem
LANDLORDS’ RESPONSIBILITIES                            within14 days of receiving the letter, you     * Illinois Law also entitles occupants to 90 days’ notice before
                                                                                                      an eviction can be filed.
The owner remains the landlord of the                  may reduce the amount of rent stated in
property until the court enters either:                the letter. Make sure your reduction           ILLEGAL LOCKOUTS
    An Order Appointing a Receiver; or                 amount is reasonable
                                                                                                      If anyone other than a sheriff asks you to
    An Order Confirming the Judicial Sale
                                                                                                      move, boards up the building, or turns off
                                                  FORECLOSURE NOTICE FOR TENANTS
                                                                                                      essential services (heat, electricity, or
The landlord (or court appointed receiver) is     If covered by RLTO, your landlord must notify       water) without court order, call 911 and file
responsible for maintaining the building.         you in writing within 7 days of being served a      a police report.
                                                  foreclosure complaint
                                                       A Landlord must also tell prospective
                                                                                                      “CASH FOR KEYS” OFFERS
TENANTS’ RESPONSIBILITES                               tenants in writing that s/he is in
                                                                                                      Banks will often pay tenants to leave early.
During foreclosure, you should continue to pay         foreclosure
                                                                                                      Tenants should know their rights before
rent. If the court appoints a receiver, you may        If a landlord violates this section, you
                                                                                                      negotiating with banks or new purchasers
be required to pay the receiver – failure to           may break your lease, with written notice,
                                                                                                          Beware of offers with unreasonably
pay rent may be grounds for eviction.                  and may sue for $200.00 in damages
                                                                                                          short time-frames, deals where cash
                                                                                                          and keys are not exchanged at the
Tenants should be notified when a receiver is     SECURITY DEPOSITS DURING
                                                                                                          same time, or cash is not given until all
appointed or ownership of the building            FORECLOSURE
                                                                                                          tenants vacate the building
changes – tenants who have not received           Landlords remain responsible for returning
notice may have a defense against an              tenants’ security deposits
                                                                                                      SEALING COURT RECORDS
eviction for non-payment of rent.                     Under the RLTO, you may sue for double
                                                                                                      If the court orders you to be evicted due to
                                                      your security deposit if your landlord
                                                                                                      foreclosure (not non-payment of rent), the court
Call the City of Chicago Building Department          does not return your deposit
                                                                                                      record can be sealed to protect your credit
at 311 to report building code                        New owners – including foreclosing
                                                                                                      rating and housing eligibility.
violations/utility shutoffs.                          banks – are also jointly responsible for
                                                      returning security deposits
                                                                                                                                                   CBA84
PRESENTER BIOGRAPHIES


MARK SWARTZ

Mark Swartz is the Director of Building Programs for Lawyers' Committee for Better Housing
(LCBH). Mark has directed LCBH’s Tenants in Foreclosure Intervention Project (TFIP) since its
inception and was one of the principal authors of LCBH’s 2009 Report, “Chicago Apartment
Building Foreclosures: Impact on Tenants.” Under Mark’s supervision, TFIP works with policy
makers, community and tenant organizers, lenders, and receivers to preserve affordable rental
housing in buildings in foreclosure, and also represents tenants in building court, forcible entry
and detainer court, and chancery court to protect the rights of tenants in these buildings. Mark
graduated cum laude from the University of Wisconsin Law School. While in law school, Mark
worked as an intern for Chief Justice Shirley S. Abrahamson at the Wisconsin Supreme Court.
He also gained housing experience by volunteering with the Tenant Resource Center in
Madison, Wisconsin, for which he was on the Campus Advisory Board, and by working as a
legal intern for the Rural Legal Trust Project at the Wits Legal Clinic through an exchange
program with the University of the Witwatersrand, Johannesburg, South Africa.



ALLYSON GOLD

Allyson Gold was a Public Interest Law Initiative intern at the Lawyers' Committee for Better
Housing's Tenants in Foreclosure Intervention Project in Summer of 2010. Allyson is a third
year student at Emory University School of Law. Allyson published her article, "Interpreting the
Protecting Tenants at Foreclosure Act of 2009," in the Winter 2010 ABA Journal of Affordable
Housing and Community Development Law. Allyson received the 2010 ABA Commission on
Homelessness and Poverty John J. Curtin Fellowship. Allyson is currently an intern in the Office
of the General Counsel at the Department of Housing and Urban Development. She also
worked as an intern at the Legal Aid Society's Homeless Rights Project in New York City and
the Atlanta Volunteer Lawyers Foundation's Housing Advocacy Program. Prior to law school,
Allyson worked in Housing Counseling Services' Tenant Services Department in Washington,
DC. Allyson graduated with high distinction from the University of Virginia with a degree in
Political and Social Thought.




                    Lawyers’ Committee for Better Housing
                                                                                            CBA85
100 West Monroe, Suite 1800 • Chicago, Illinois 60603 • 312-347-7600 • 312-347-7604 • www.lcbh org
CBA86
                                                    9/13/2010




 Protecting the Rights
    of Tenants in
     Foreclosure
       R l E t t L C mmitt
   YLS Real Estate Law Committee,
      Chicago Bar Association
      by Mark Swartz and Allyson Gold,
    Lawyers’ Committee for Better Housing
             September 16, 2010




A Review of 2009 LCBH Data:
“Chicago Apartment Building
  Foreclosures: Impact on
         Tenants””

     Full report available at lcbh.org




Key Findings from LCBH Report
In 2009 there were 6,560 new multi-
family building foreclosure filings in
Chicago
                           multi-family
This is an average of 125 multi family
buildings per week
These properties had a total of 20,691
rental units impacted by foreclosure,
averaging 3 units per filing




                                            CBA87
                                                           1
                                                                          9/13/2010




Key Findings from LCBH Report
 Overall, in 2009 there were at least 4,000
 more multi-family building units impacted
 by foreclosure than single-family and
 condominium units
 The bulk of the rental units in foreclosure
 were located in low-income, minority
 neighborhoods




 Findings: 9 community areas had
over 200 building forec osures fi ed
                  2009 Total Filings by Community Area

           Community Area                          # of Filings

               Austin                                  394

           Humboldt Park                               351

           Belmont Cragin                              308

              New City                                 289

             Englewood                                 267

           West Englewood                              243

            Logan Square                               230

           North Lawndale                              219

           South Lawndale                              211




Findings: 12 community areas had
  more than 500 units mpacted
           2009 Total # of Units Impacted by Community Area

            Community Area                # of Units
              South Shore                   1370
                 Austin                     1289
             Humboldt Park                   923
               Englewood                     719
                Chatham                      711
             Belmont Cragin                  656
                New City                     606
             North Lawndale                  590
               West Town                     578
             Logan Square                    574
              Rogers Park                    554
             Near North Side                 522




                                                                  CBA88
                                                                                 2
                                                                         9/13/2010




Findings: Nine commun ty areas
had at least 15 foreclosure fi ings
         on Big Bui dings
                                           # of Filings on Big
              Community Area
                                                Buildings
                South Shore                        52

                  Austin                           35

                 Chatham                           35

                Englewood                          21

              Washington Park                      18

               Humboldt Park                       16

           Greater Grand Crossing                  16

               Chicago Lawn                        16

                Rogers Park                        15




Findings: Big Building Impact
                                       # of Units in Big
                 Community Area
                                      Buildings Impacted
                   South Shore              1108
                    Chatham                  556
                     Austin                  544
                 Near North Side             500
                   Rogers Park               474
                     Uptown                  448
                Mount Greenwood              424
                    Hyde Park                281
                Washington Park              231
                   Englewood                 229
                   Edgewater                 223
             Greater Grand Crossing          214
                  Chicago Lawn               173
                 Humboldt Park               170
                   West Town                 126
                   Woodlawn                  118
                 North Lawndale              112
                East Garfield Park           108
                   Avalon Park               104
                 South Chicago               102




            Trends:
   Multi-residential Buildings
The Institute for Housing Studies at
DePaul University reports that falling
property values and high loan-to-value
                multi residential
ratio for many multi-residential buildings
in Cook County– 42% of 2-6 unit buildings
and 5% of 7+ unit buildings are
completely underwater– are driving the
increase in rates of foreclosure filings of
multi-residential buildings




                                                                 CBA89
                                                                                3
                                                     9/13/2010




            Trends:
   Multi-residential Buildings
The Institute for Housing Studies at
DePaul University also reports that net
rental revenues for about 74,000 rental
units in Chicago are currently at or below
total operating costs, which is driving
landlord disinvestment




           Trends:
Foreclosure and Condominiums
The Woodstock Institute reports that new
foreclosure filings on condominiums in
Chicago grew by 38% from the first half of
2009 to the first half of 2010
The Woodstock Institute also found that in
2009 condo foreclosure filings made up
24% of all foreclosure filings in Chicago




           Trends:
Foreclosure and Condominiums
LCBH has learned through its work–
confirmed by conversations with
canvassers– that many, perhaps the
majority of condos in foreclosure are
majority,
investment properties housing renters
Tenants in condos may be more isolated;
the investor/LL is often absent; and the
condo association may want possession
and assessments from tenant




                                             CBA90
                                                            4
                                                      9/13/2010




Challenges faced by Tenants in
         Foreclosure
Widespread misunderstanding of rights
and responsibilities of tenants in
foreclosure, particularly when there is no
legal representation
The length of the foreclosure process, in
which owner may have effectively
abandoned the property but lenders
refuse to take responsibility for maintain
the rental units, leads to disinvestment




Challenges faced by Tenants in
         Foreclosure
Lenders and brokers managing bank-
owned properties frequently make
coercive “cash for keys” offers that
tenants are effectively forced to accept
due to poor living conditions
Often multiple entities claim ownership to
a building/unit and make different
demands and/or set different deadlines




Challenges faced by Tenants in
         Foreclosure
Successors-in-interest typically refuse to
acknowledge tenants’ tenancies, refuse to
make any repairs to the property, and
refuse to address utility issues
Successors-in-interest, and their
attorneys, willfully ignore the laws passed
to protect tenants in foreclosure
False, misleading, and threatening notices
are designed to scare tenants to move




                                              CBA91
                                                             5
                                   9/13/2010




Utility Shut-off Notices




 Assignment of Rents




    Illegal Notices




                           CBA92
                                          6
                          9/13/2010




Illegal Notices




Illegal Notices




Illegal Notices




                  CBA93
                                 7
                                                                    9/13/2010




              Illegal Notices




Protecting Tenants at Foreclosure
       Act of 2009 (PTFA)




Legislative History of Public Law 111-22

PTFA is part of the Helping Families Save their Homes Act
of 2009
S. 896 passed senate (5/6/09)
   Tenant protections added by amendment number
   S.Amdt 1036 by Senator Kerry
               discussion                        57 39
   After floor discussion, passed by a margin of 57-39
House amended S. 896
   Clarified bona fide lease including adding language to
   ensure that subsided rents are included in definition
P.S. 111-22 signed (5/20/09)
P.S. 111-22 amended (7/21/10)




                                                            CBA94
                                                                           8
                                                                              9/13/2010




   “At least for tenants who are in good standing on their
   properties, they should not be affected because the
   property ended up in foreclosure through whatever
   rationale that may have happened to the landlord. It seems
   to me, putting people out on the street is not what we ought
   to be doing at a time such as this. Whatever your views are
   about whether these programs working as effectively as
         should
   they should, I think all of us agree the innocent who are
   being confronted with these decisions should not be left in
   a more precarious position than they are already in, and
   that is exactly what would happen in the absence of the
   Kerry amendment, the Kerry-Gillibrand-Reid amendment.“

   155 Cong. Rec. S5115 (daily ed. May 5, 2009) (statement
   of Sen. Dodd).




               Post-Legislative Intent
“As the chairman stated, the law was intended to provide all
bona fide tenants, who began renting prior to transfer of title by
foreclosure of their rental property, be given at least 90 days’
notice before being required to vacate the property. In addition,
these bona fide tenants are allowed to remain in place for the
remainder of any leases entered into prior to the transfer of title
   foreclosure.
by foreclosure “

155 Cong. Rec. S8978 (daily ed. August 6, 2009) (statement of
Sen. Kerry).




  H.R. 4173 enacted (7/21/10)
    Part of the Dodd-Frank Wall Street Reform and
    Consumer Protection Act amends protections of
    PTFA
    Section 1484 is titled “Protecting tenants at
                                  clarification
    foreclosure extension and clarification”
       Extends PTFA through the end of 2014
       Clarifies that any lease or tenancy created
       prior to the change of title as a result of
       foreclosure is protected by PTFA
          “Clarifies” that this is what PTFA always
          meant




                                                                      CBA95
                                                                                     9
                                                                    9/13/2010




    General Impact of PTFA

Foreclosure does not extinguish tenancy

Successor in interest to a foreclosed property
must provide a preexisting tenant with at least
90-days notice before the tenant must vacate
the property (Sec. 702(a)(1))




If tenant has a bona fide lease or tenancy,
then tenant is entitled to remain in the
property for the duration (Sec. 702(2)(A))
   Bona fide lease or tenancy does not
   necessitate a written lease
However, if the successor in interest plans
to use the property as a primary
residence, then he may terminate a
tenancy with the provision of at least 90-
days notice, regardless of whether a
tenant has a bona fide lease or tenancy
(Sec. 702(2)(A)).




         Protected Tenants
Bona Fide Lease or Tenancy (Sec. 702 (b).
   A lease is considered bona fide only if:
     The mortgagor or the child, spouse or parent of the
     mortgagor under the contract is not the tenant;
     The lease or tenancy was the result of an arms-
     length transaction; and
     The lease or tenancy requires the receipt of rent
     that is not substantially less than fair market rent
     for the property or the unit’s rent is reduced or
     subsidized due to a Federal, State, or Local
     subsidy




                                                            CBA96
                                                                          10
                                                            9/13/2010




 Properties Governed by PTFA
Any dwelling or residential property (Sec.
702(a))
  PTFA does not distinguish between single family
  and multi-unit dwellings
Any property with a federally-related mortgage
loan (Sec. 702(a)).
  `federally-related mortgage loan' has the same
  meaning as in section 3 of the Real Estate
  Settlement Procedures Act of 1974




PTFA and Section 8 Tenancies
Section 8 tenants are entitled to at least
90-days notice before they must vacate a
foreclosed property (Sec. 703(1))
                           r
If the tenant has a lease or tenancy that is
greater than 90-days, it must be honored
unless the successor n nterest will use
the property as a primary residence (Sec.
703(1)(i))




Notice Requirements Under PTFA

PTFA does not specify the type of notice
required
Instead, successors in interest must look
to State and local law for guidance
Notice can only be given after title has
been transferred




                                                    CBA97
                                                                  11
                                                         9/13/2010




Responsibi ities of Landlords and
     Tenants under PTFA

PTFA protects tenants in good standing
  Tenant must continue to pay rent
  PTFA does not bar eviction for cause
Successor in Interest has the
responsibilities of the landlord as defined
by the lease or by aw




      PTFA and Local Law
The impact of PTFA on local law depends
on whether or not it preempts state law in
a given jurisdiction

PTFA states: “except that nothing under
this section sha l affect the requirements . .
. of any State or local law that provides
longer time periods or additional
protections for tenants” (Sec. 702(a))




      PTFA and Local Law
The Supreme Court stated in Bates v. Dow
Agrosciences, LLC and in Sprietsma v. Mercury
Marine, that express preemption is informed by
congressional intent
The congressional record demonstrates that
Congress intended tenants to have the greatest
protection possible under Federal, State, and
local law
THEREFORE, PTFA IS A FOUNDATION FOR
TENANTS’ RIGHTS, NOT A CEILING




                                                 CBA98
                                                               12
                                                                    9/13/2010




  State and Local Laws that Impact
       Tenants in Foreclosure

Illinois Mortgage Foreclosure Law

Chicago Residential Landlord and Tenant
Ordinance




Illinois Mortgage Foreclosure Law

To initiate judicial foreclosure procedure, the mortgagee
must join the necessary parties to the action 735 ILCS
5/15-1501(a)
Necessary parties do not include tenants
Mortgagees may also join permissible parties. This
includes “[a]ll persons having a possessory interest in
the mortgaged real estate.” 735 ILCS 5/15-1501(b)(1)
   This includes tenants




                                                            CBA99
                                                                          13
                                                                          9/13/2010




However, even if a tenant is joined to the foreclosure
action, Illinois law states:

    “a lease of all or any part of the mortgaged real
   estate shall not be terminated automatically solely by
   virtue of the entry into possession by (i) a mortgagee
   or receiver prior to the entry of an order confirming
   the sale, (ii) the holder of the certificate of sale, (iii)
   the holder of the deed issued pursuant to that
   certificate, or (iv) if no certificate or deed was issued,
   the purchaser at the sale.” 735 ILCS 5/15-15-1701(e)




Because a foreclosure does not
automatically extinguish a leasehold
interest in a property, a tenancy may be
terminated in one of two ways:
   1.
   1 Forcible Entry and Detainer Action

   2. Supplemental Petition




  Forcible Entry and Detainer

Forcible entry and detainer actions apply
to vacating occupants from a property
735 ILCS 5/15-1701(d)
           /
Occupant means “a person in lawful
physical possession of all or part of the
mortgaged real estate.” 735 ILCS 5/15-
1223




                                                                 CBA100
                                                                                14
                                                          9/13/2010




 Forcible Entry and Detainer
No [lender] … or purchaser who fails to
file a supplemental petition under this
subsection during the pendency of a
                        hall
mortgage foreclosure shall file a forcible
entry and detainer action against an
occupant of the mortgaged real estate
until 90 days after a notice of intent to file
such action has been properly served
upon the occupant. 735 ILCS 5/15-
1701(h)(4)




      Supplemental Petition

May be filed “at any time during the the
pendency of the foreclosure and up to 90
days after the date of the order confirming
the sale.” 735 ILCS 5/15-1701(h)(1)
Much less common than forcible entry and
detainer actions




      Supplemental Petition
Lenders are often unaware of who lives in
the building and are unwilling to make a
diligent inquiry, and therefore typically do
                         petitions,
not serve supplemental petitions choosing
forcible instead, where an order of
possession entered by the eviction court
can be against “unknown occupants.”




                                                 CBA101
                                                                15
                                                              9/13/2010




Supplemental petition must name “each such
occupant against whom possession is sought and
state the facts upon which the claim for relief is
premised.” 735 ILCS 5/15-1701(h)(1)
The hearing shall be no less than 21 days from
the date of service of the notice. 735 ILCS 5/15-
1701(h)(2)
Any assertion that the occupant is not current in
rent, shall be supported by an affidavit to that
effect in the supplemental petition proceeding.
735 ILCS 5/15-1701(h)(4)




Special rules apply when a tenant is
current in his rent or has made a good
faith effort to be 735 ILCS 5/15-
1701(h)(4)
In such situations, the occupant is allowed
to retain possession of the property until
either:
  120 days following proper service of
  supplemental petition; or
  Through the duration of the lease, whichever
  is shorter
  provided that any order shall allow the
  occupant to remain in possession for at least
  30 days from date of the order




          Sealing of the Record

The court records relating to a
supplemental petition for possession filed
under this subsection (h)…or relating to a
forcible entry and detainer action brought
against a tenant … shall be ordered sealed
and shall not be disclosed to any person.
735 ILCS 5/15-1701(h)(5)




                                                     CBA102
                                                                    16
                                                      9/13/2010




Highlights of Recent Amendments to the
       Mortgage Foreclosure Law
 “Occupants” replaces tenants, providing
 rights to lawful occupants that the PTFA
 does not. Public Act 096-0111
                   p
 A receiver or the purchaser of the
 foreclosed property must—within 21
 days— serve occupants and advise them
 that control of the property has changed
 hands and provide information as to
 whom to contact for repairs. 735 ILCS
 5/15-1704(f); 735 ILCS 5/15-1508.5




Highlights of Recent Amendments to the
       Mortgage Foreclosure Law
 A receiver or purchaser who fails to
 provide notice advising tenants that
 control of the property has changed hands
 and providing information as to whom to
 contact for repairs may not collect any
 rent or terminate an occupants
 tenancy for non-payment of rent, until
 providing said notice. 735 ILCS 5/15-
 1704(f)(5)(i); 735 ILCS 5/15-1508.5(d)(i)




 Chicago Residential Land ord and
        Tenant Ordinance




                                             CBA103
                                                            17
                                                                9/13/2010




     Landlords under the RLTO

  “Landlord means the owner, agent, lessor
  or sublessor, or the successor in interest
  of any of them, of a dwelling unit or the
  building of which it is part.” RLTO, Sec. 5-
  12-030
  This includes services, management
  companies, and banks




         Notice of Foreclosure

  Within 7-days of being served a
  foreclosure complaint, an owner or
  landlord must disclose the foreclosure
  action in writing to the tenant (Sec. 5-12-
  095(a))
  An owner or landlord must disclose, in
  writing, that a s/he is named in a
  foreclosure (Sec. 5-12-095(a))




  The written disclosure must state:

“This is not a notice to vacate the premise. This
  notice does not mean ownership of the building
  has changed. All tenants are still responsible for
  payment of rent and other obligations under the
  rental agreement. The owner or landlord is still
  responsible for their obligations under the rental
  agreement. You shall receive additional notice if
  there is a change in owner.” (Sec. 5-12-095(a))




                                                       CBA104
                                                                      18
                                                                9/13/2010




           Security Deposits
 A successor in interest to a foreclosed property
 is jointly and severally liable for the return of a
 tenant’s security deposit (Sec. 5-12-080(e))
 Under the RLTO, it does not matter whether the
 original owner/landlord transferred the security
 deposit to the successor in interest; the
 successor in interest is still liable




     Non-Litigation Strategies for
      Tenants in Foreclosure




The Type of Counseling is Influenced
    by Phases of the Foreclosure

 Phase One: Foreclosure has been initiated

 Phase T
 Ph         Foreclosure i pending
       Two: F    l      is   di

 Phase Three: After confirmation of
 foreclosure sale has been entered




                                                       CBA105
                                                                      19
                                                        9/13/2010




Phase One: Newly Initiated Foreclosure

 Issue: Despite RLTO provisions,
 landlords/owners typically do not notify
 tenants that their buildings are in
 foreclosure
 Strategies: Hold community meetings
 and distribute materials to educate
 tenants, landlords, owners, banks and
 servicers of rights and responsibilities
 during foreclosure




Phase Two: Forec osure is Pending
 Issue: Utilities are not maintained in
 compliance with ILCS and RLTO
 Strategies: contact landlords, owners,
 receivers a management c mpanies to
 receivers, and anageme companies
 inform them of their continued
 responsibilities; contact utility companies
 to avert shut-offs pursuant to 765 ILCS
 735/1 – 5, 765 ILCS 742/1 30




Phase Two: Foreclosure is Pending
 Issue: Minor building defects (tenant can
 afford to make repairs)
 Strategies: “If the reasonable cost of
 compliance does not exceed the greater of
 complia         s         eed
 $500 or one-half of the monthly rent, the
 tenant may recover damages . . . Or may
 notify the landlord in writing of his
 intention to correct the condition at the
 landlord’s expense.” RLTO, Sec. 5-12-
 110(c)




                                               CBA106
                                                              20
                                                         9/13/2010




Phase Two: Foreclosure is Pend ng
Issue: Moderate Repairs (repairs are
expensive and tenant cannot make
remedy)
Strategies: Send notice to landlords to
ensure that they continue to make repairs
until their interest in the property is
transferred; work with banks to make
repairs before the property becomes
distressed




Phase Two: Foreclosure is Pending
Issue: Moderate Repairs, continued
Strategies: Notify the landlord in writing
of bad conditions and tell the owner s/he is
                    pa t o      monthl rent
going to withhold part of the monthly rent.
This should be done through a 14 day
letter which lists the unit’s problems. RLTO,
Sec. 5-12-110(d)




Phase Two: Foreclosure is Pending
Issue: Severe Defects (expensive repairs
and significant safety issues)
Strategy: Petition to appoint a receiver;
tenants
tenant call 311 to obtain housing
relocation assistance funds; move for
injunctive relief pursuant to RLTO, Sec. 5-
12-110(e)




                                                CBA107
                                                               21
                                                         9/13/2010




Phase Three: Post Foreclosure
 Issue: Tenants are not given proper
 eviction notice
 Strategies: Send notice to successors in
          informing         tenants ights
 interest i forming them of tena ts rights
 pursuant to PTFA




Phase Two: Foreclosure is Pending
 Issue: Tenant’s security deposit is
 withheld
 Strategy: Send notice to successor in
                                            r
 inter st stati g that s/he i responsible for
 interest stating           is
 the return of the tenant’s security deposit
 pursuant to RLTO, Sec. 5-12-080(e)




Litigation Strategies for Tenants
          in Foreclosure




                                                CBA108
                                                               22
                                                                         9/13/2010




   All traditional defenses apply
All notices must:
– Describe the premises and identify the correct apt.
– Provide that the lease will terminate at some future
  date
     time period does not begin to run until notice is served
     properly




   All traditional defenses app y
   Acceptable Methods of Service
Personal Service
Substitute Service
Service by special order of the court
– (certified mail)
Constructive Service
– Posting and mailing or publication and mailing
– LL must sign affidavit that defendant does not
  live in IL, has left IL, can not be found after
  due inquiry, or is concealed




   All traditional defenses app y
2-615 Motion to Dismiss
– Insufficient Complaint

– Most commonly used when no notice given to
         (oth rwise
  tenant (otherwise judge will just allow LL to
  amend complaint)


– Must raise this challenge before pleading




                                                                CBA109
                                                                               23
                                                                        9/13/2010




   All traditional defenses apply
           2-619 Motion to Dismiss

Lack of Subject Matter Jurisdiction
– Tenancy has not been terminated – in other words,
              g
  notice not given
– The 90-day notices we have seen may adequately
  notify the tenant of the intent to file an eviction action
  pursuant to the IMFL (and now the Protecting
  Tenants at Foreclosure Act “PTFA”), but the generic
  Demand for Possession incorporated into the Notice
  may not sufficiently terminate a tenancy.




    Forcible Entry and Detainer
                  Prima Facie Case

Plaintiff must establish that:
 – He has a right to possession of the premises
 – Defendant has possession of the premises
 – Plaintiff served valid written termination notice
 – Must establish amount of rent owed if it’s a joint
   action

If plaintiff can not establish each of these, defendant
entitled to judgment as matter of law




    Forcible Entry and Detainer
Only germane defenses may be presented

Germane defenses include:
 – Plaintiff not a proper party/lacks capacity to sue
 – Defendant has a claim under the Retaliatory Eviction
   Act or Retaliation under RLTO
 – Notice not served properly (see section on service)
 – Notice does not give the proper number of days
 – Plaintiff filed eviction action before notice period
   ended




                                                               CBA110
                                                                              24
                                                          9/13/2010




   Forcible Entry and Detainer

          Damages/Offsets
Breach of Warranty of Habitability
– determine how much the apt would be worth
                 market            conditions
  on the housing market, given the conditions,
  and then determine how much rent was
  overpaid
Constructive Eviction or lockout
– may be able to get damages for emotional
 distress




    Is the Plaintiff a Receiver?
Review Order Appointing Receiver to
determine if Receiver is authorized to hire
counsel without leave of court
   Receiver’s             unauthorized
If Receiver s actions are unauthorized, or
otherwise has unclean hands, intervene in
the foreclosure action
If action is based on unpaid rent, has
Receiver provided proper notices pursuant
to 735 ILCS 5/15-1704(f)(5)?




  Is the Plaintiff a Successor in
             Interest?
Research Title: is the Plaintiff entitled to
possession
Was Plaintiff on title when Notice was
served
If action is based on unpaid rent, has
Plaintiff provided proper notices pursuant
to 735 ILCS 5/15-1508.5?




                                                 CBA111
                                                                25
                             9/13/2010




   p
Sample Notices
   For Discussion




                    CBA112
                                   26
         9/13/2010




CBA113
               27

				
DOCUMENT INFO