Tenants and Foreclosure – FAQ

Last updated: December 14, 2009 – 1:11 PM

Tenants impacted by foreclosure: Frequently Asked Questions

What is a foreclosure?
When an owner falls behind in mortgage payments, foreclosure is the court process by which a bank forces the sale of a building used as security in order to pay off the owner’s debt. In an effort to protect tenants who live in a building that is in foreclosure, the city passed the Keep Chicago Renting Ordinance (KCRO). Under the KCRO, you may be eligible for a lease renewal or $10,600 in relocation assistance. To learn more click HERE.

Who owns the building while it is in court?
Just because a building is in foreclosure does NOT mean that the building has been foreclosed on or will be foreclosed on. Until the court approves a sale and there is a confirmation of sale, your landlord still owns the building. In most cases, the bank acquires the property and becomes the owner.

What are some common signs that my building might be in foreclosure?
Maintenance suddenly stops
– Utility shutoff notices
– Banks sending notices to the landlord
– Realtors hanging around the building, or taking pictures of the building
– The landlord disappears and/or stops collecting rent.

How long does the foreclosure process take?
The court process takes an average of nine months. If the owner is not able to satisfy the bank’s requirements, the court puts the property up for sale where it is usually bought by the bank.

Where can I find out if my building is in foreclosure?
1. Get the PIN # of the property by going to www.cookcountyassessor.com and entering the building address.

2. Enter the PIN # at www.cookrecorder.com or call the Recorder of Deeds at 312-603-5050 and give them your PIN #. If the building is in foreclosure, they can provide you with the foreclosure notice (the “lis pendens”) and the associated foreclosure court case number.

3. For more information about the case go to www.cookcountyclerkofcourt.org or call the Chancery Court, at 312-603-5133. You can also go to http://www.cookcountyclerkofcourt.org – go to online case info – full docket search – and search the chancery division for the landlord’s name under defendant or using the case #.

Under the Keep Chicago Renting Ordinance (KCRO), if your building is in foreclosure, you may be eligible for a lease renewal or $10,600 in relocation assistance. To learn more about the KCRO, click HERE.

Do I still have to pay rent?
Yes. As long as you are living in the unit you must pay rent. Checks or money orders are best so that you have proof of payment. You can still be evicted for nonpayment of rent even though your landlord is in foreclosure.

What if I don’t know to whom to pay rent or the landlord stops collecting it?
Click here to find our who the owner is or contact a lawyer to assist you in determining the new owner of the property. Be sure to ask any new people claiming to be the owner for proof before giving them rent money. The law only requires that tenants make a good faith effort to pay the rent if the landlord disappears. Some examples of good faith efforts to pay rent may include:
– Holding the rent in a money order
– Using the rent on utilities your landlord was paying
– Using the rent to make repairs to the property
– Sending a letter via certified mail, requesting information from the new owner on where to send the rent. (Keep             a copy of the letter for yourself)

Do I have the right to break my lease because my landlord is in foreclosure?
No…however, if you are covered under the Chicago Residential Landlord Tenant Ordinance and did not receive proper notice, please see below under Are landlords required to tell their tenants that their building is in foreclosure?

The bank has taken over the building. What do I do?
The bank is your new landlord. You must pay them rent once they have notified you as to whom and where to pay, and they are responsible for repairs, any utilities paid by the old landlord, etc. If you are uncertain of who to pay, hold your rent in escrow. Also, check to see if you’re covered by the Keep Chicago Renting Ordinance. You may be eligible for relocation assistance if the bank chooses not to renew your lease.

The sheriff posted a notice saying that my landlord or unknown occupants must vacate the building. Does this apply to me?
No. If your name is not on the notice, you do not have to move. Immediately contact the sheriff’s office at (312) 603-3365 to inform them that there are tenants in the building and contact an attorney to get legal help. If the sheriff shows up, you will need to show them identification, as well as your lease, a piece of mail, or other evidence proving that you are a tenant in the building and not the landlord.

Will I have to move? How much time will I have once a new owner takes over?
If the building is foreclosed upon and sold, the new owner must give you 90 days or until the end of your lease, whichever longer. However, if the new owner would like to use the unit as a personal residence, they do not have to honor the lease, but they must give you at lest 90 days notice prior to eviction proceedings. Once the lease expires, the owner must give you a 30 day notice in writing before proceeding in eviction court. (This is assuming that you are lease complaint and up to date on rent.)

NOTE: The sheriff’s office can and will evict tenants during the winter, with the exception if it is 15 degrees or snowing.

Can the bank or new owner put me out without a court date?
No. If anyone tries to evict you before taking you to court, then it is an illegal eviction, also known as a lockout. Call the police, file a police report (get officers name and badge #) and contact the Tenants Rights Hotline at 773-292-4988. If you receive a summons to court make sure to contact an attorney.

Will this eviction show on my record?
If you were evicted solely because of the foreclosure your attorney can petition the judge to seal the record. If you are evicted for nonpayment of rent, it will be on your record.

The bank offered me a “Cash for Keys” deal. What should I do?
Sometimes banks offer tenants a cash for keys deal in order to vacate the building more quickly. Evaluate the entire situation first and make sure you have enough time to find a safe and decent apartment. Make sure you get any deal in writing and talk to a lawyer before you sign. If the bank does not offer a settlement feel free to ask for one. However, be aware that many tenants are eligible for $10,600 under the KCRO, which is more than most banks will initially offer. Call us or contact an attorney before agreeing to any “Cash for Keys” deal.

How do I get my security deposit back?
If your tenancy is NOT governed by the Chicago Residential Landlord Tenant Ordinance (CRLTO): The bank is not responsible for your deposit. If you do not receive your security deposit back within 45 days of moving you can take your landlord to court. If you know your landlord is in foreclosure court or is about to lose the building ask for written permission to live out your security deposit. If you live out your deposit without permission you can be evicted for non-payment of rent. If your tenancy is CRLTO please see below.

Additional Information for tenants who are covered under the Chicago Residential Landlord Tenant Ordinance (CRLTO): If you live in Chicago, the Ordinance governs your tenancy unless you reside in:

  • An owner occupied building containing less than seven apartments;
  • A hotel, motel, inn, rooming house, or boarding house (unless you have resided there for more than 31 days and pay rent on a monthly basis); or
  • A hospital, convent, monastery, school dormitory, temporary overnight or transitional shelter, cooperative, or
  • A building owned by your employer (assuming your right to live there is conditioned upon you being employed in or around the building).

What happens to my security deposit?
In the event that the building is lost to foreclosure, the lender is responsible if the landlord fails to return the security deposit.

Are landlords required to tell their tenants that their building is in foreclosure?
If your tenancy is governed by the CRLTO: The landlord is required to tell current tenants about foreclosure filings within seven days of being served with a foreclosure complaint. The landlord must also inform any potential tenants before they move in. Tenants who were not properly informed about the foreclosure can sue for $200 in damages and/or terminate their leases.

Additional References:
Building Inspectors: Call 311 for an inspection if you have repairs that need to be made or are lacking utilities.
If you need assistance moving or with a security deposit call 311 and inform them that your landlord is in foreclosure.

Request an inspection online

Lawyers Committee for Better Housing: (312)-347-7600

Legal Assistance Foundation (Subsidized Tenants): (312)-341-1070

Sheriffs Eviction Unit: (312)-603-3365

Chancery Court: (312)-603-5133

Metropolitan Tenants Organization Tenants’ Rights Hotline: (773)-292-4988 Open: Mon-Fri, 1-5pm

Chicago Legal Clinic: (773)-731-1762

Citizens Utility Board: 1-800-669-5556

All 37 Comments

  1. I have a notice for eviction immediately but the house in forclosure cause the landlord. What can I do about housing for my family. I didn’t get no paper work about c summons for court.

    1. You have not provided enough information. MTO has an eviction specialist who could help you out. Tenants in eviction court because of foreclosure have additional rights. Please call out hotline 773-292-4988 to get help.

  2. My building is under foreclosure, I believe the bank now owns the building since I pay my rent to a court appointed receiver. The issue is they have allowed the electricity to the building to be cut off, I have electricity in my apartment, but all the halls are dark and I live in the basement unit and can’t see when I walk down the stairs. Another issue is the previous land lords come around, have changed lock in unoccupied units as if trying to sell the unit. I am also afraid that the appointed receiver (the company I have been paying my rent to) have not cut the heat on in my building and we have free heat. What am I to do with these issues, any help at all would be appreciated.

    1. As for the electricity, you can call 311 and report the problem. You can also write a letter to the receiver and the bank and inform them they have a duty to turn the electricity in the common areas on. it is a danger and should you fall because of the darkness that they could be held liable for failing to correct the problem.

      I have no idea why the old landlord would be coming around to change the locks. Seems strange and though s ince no one is living in the unit it may not be illegal.

      How many units are occupied? You can call 311 with a heat complaint if it is below 68 degrees in your unit. Landlords (including receivers) are required to provide heat from September 15 to June 1.

      MTO has a foreclosure specialist, I would call him to see if you can get some help at 773-292-4980 x 247.

  3. I am a tenant of a recently forclosed Building where the bank did a lock out on me,,Since Then i have tried to get a hold of the bank over 100x or more and i even have tried to call the banks here but no luck,, i call the people who the bank hired to clean up n do things for the building and ask them what to do or who do i speak with and all they do if forward my messages to the bank,, so now i don’t have heat or water so what do i do???

    1. You can call the City of Chicago’s 311 hotline and request an inspector regarding the heat. You can also call the Lawyers Committee for Better Housing, 312-347-7600. The have some attorneys that will represent tenants in foreclosures.

      Have you called the police to report a lockout?

  4. I bought a foreclosure two (2) flat rental property from a bank and served the occupants with the ninety (90) days notice on 9/15/2012. I notified the occupants where to send the rental payments by certified mail and posting. I did not receive any payment as of 10/1/2012. Can I evict the occupants before the 90 days period is over? Can I serve them with a three day notice?

    Thank you.

    1. Tenants are required to pay rent and if they do not then the owner can serve them with a 5 day pay or vacate notice. As a new landlord there are provisions in the law about providing the tenants with notice of a change in ownership and also if there was a deposit originally the new owner is responsible for informing the tenant of where the bank the deposit is held in. Finally, you need to check with the bank to see if they changed the agreement with the renters. Some banks in an effort to get the tenants out let them stay rent free for a period in return for an early move out. Also if there was a lease, you cannot terminate the lease with a 90 day notice.

  5. I recently found out that my landlord property was sold on 7/20 foreclosured process but was purchase under his tenants name. He came back after sale on Aug 2 and ask for July rent.Do I give him July rent still? He telling me he is still my landlord just purchase under another name? Do Icontinue to give him money or should I put the money aside and what till the new landlord contact me. Which he showed med a receipt of sale under a female name(assuming new owner)I plan not to give rent anymore and move out.How long do I have before he or new owner tries to evict me?

    1. I would start by contacting the bank and informing them of the situation and asking them for the name of the new owner. Yo mentioned that the property was purchased under the name of a tenant. Have you contacted that tenant to find out if they are the new owner. Have you received anything in writing from anyone stating that he or she is the new owner? I think that you could demand a written statement of ownership before giving anyone the rent.

      As for eviction, the first thing that needs to happen is for the landlord to give you a written eviction notice. If the old owner give you the notice, then you could potentially challenge his ownership of the property. You would stat by putting your request in writing for documentation of ownership. It is impossible to say how long the eviction process will last at there are many factors involved including whether you get an attorney to assist you.

  6. I was notified just recently by the owner that he was selling the building in which I am renting on a month to month basis and he told me that I have to move out by end of August but he still wants to collect July’s rent but he told me about the selling on July 12. Do I still have to pay him rent?

    1. Several items.

      The notification ending the lease has to be in writing and has to give the tenant at least 30 days prior to the end of the lease.
      The law requires that tenants pay rent for every day they are residing in the unit. There are no provisions in the law for tenants to use the security deposit as last month’s rent. If you do not pay rent then the landlord will have to take you to court for eviction. How many units are there in the building and is the landlord asking everyone to leave? You might want to negotiate moving with the owner.

  7. I live in Will County and my landlord was foreclosed on. He never told us. We received a letter on June 6th from the court appointed receivers explaining what was going on and that they were coming by the property to inspect it on the 12th. Included was a copy of the court order appointing them as receivers dated May 8th but it also stated that the order would not go into effect until their bond was approved. No date of bond approval or other court paperwork was included but there was a court date of June 5th listed online attached to this court case (the day before we received the letter) so I am inclined to think that is when their bond got approved.

    Anyway, one of the employees for the receiver company (The Alps Group) is trying to tell me that I owe them rent for June as well as July even though the first person I spoke to told me I needed to begin making payments in July. I find this very odd. She is sending me threatening emails and refusing to make safety-related repairs. There was a massive storm that took place over the weekend knocking down part of a tree into the fence and part of the gas station next door. She made it very clear that she did not care.

    In addition, my old landlord refused to hand over any records so they want us to supply a copy of our lease. Which is fine but I have all our belongings packed up and ready to move because our lease is almost up (August 15th) and am having a hard time finding the lease. Now she is telling me that if I do not find it by July 10th that they are going to draw me up a new lease – which I have NO intention of signing.

    I feel like this woman is being abusive and overstepping the boundaries of her power but am not sure how to go about handling it. I plan on beginning by sending her proof that I made June’s payment to the old landlord but being as it is a cash receipt I suspect she is going to give me problems.

    Given her candor about not wanting to make repairs, is it possible for me to withhold July’s rent in escrow? Or is that not allowed with receivers?

    1. Have you put anything in writing to the receiver. If not it would be good to do so.

      In the letter document the conversation with the representative who stated not to pay the rent until July 1. If you know the person’s name put that in the letter as well as the date of the conversation.

      Next if you are definitely moving on August 15 then let them know that you will be moving out on that date which is the end of the lease. You can get a copy of the lease the from the previous owner.
      sonrow, you should find an attorney to help you with that. There are not any specific provisions in the rental laws that would allow you to do that.

      In you letter, ask them to please communicate with you via email or other written communication because you are getting different instructions from different people. You want them to quit calling you and to quit harassing you.

      Finally you may want to find out the name of the person’s supervisor and cc them.

  8. i was evicted by the owners of my apartment building and the court gave me ten days to move, but within those 10 days the owners lost the property to the bank so do i still have to move?

    1. It is up to the new owners, (the bank in this case). If there is an eviction order the bank can most likely enforce it. The bank may or may not know about the eviction. May I suggest that you call the Lawyers Committee for Better Housing. You may be able to get an attorney who could help you. their phone number is 312-347-7600.

  9. I am renting a foreclosed condo and was offered Cash for Keys. If I take the Cash for Keys, am I still entitled to get my deposit back?

    1. Not necessarily, the bank may be including the deposit in the cash. You should read through the agreement before signing and see what it states about the deposit. Whatever you do make sure that you get the cash for keys agreement in writing and that it includes what happens to the security deposit. Also make sure you know what condition they are expecting you to return the unit and what happens if you do not make it out on time. Tenants have had problems with these issues.

  10. Additionally, I per the info above, he was required to inform me he was in foreclosure which come to find out, was before we even signed the lease. I will fore-go suing, as I already terminated my lease and moved out. So I am correct here right?

    Are landlords required to tell their tenants that their building is in foreclosure?
    If your tenancy is governed by the CRLTO: The landlord is required to tell current tenants about foreclosure filings within seven days of being served with a foreclosure complaint. The landlord must also inform any potential tenants before they move in. Tenants who were not properly informed about the foreclosure can sue for $200 in damages and/or terminate their leases.

  11. I signed a lease on 11/12/11. It was good through 6/30/12. However, the 2nd week of January 2012, I had a realtor and potential buyers at my condo b/c the owner was in a short sale. I was never informed of this at any time. They apparently “took off the market”. However, after further research, the owner has been in foreclosure since 01/2010. So, if I am correct, he has been in violation from the get go of my lease. I recently moved out, before my lease ended. I paid for April and told him he could keep my security deposit(this was dumb). I am not however, paying May, after further reviewing he was in violation the entire time. Can I report him to someone? This is ridiculous! I have never dealt with such a loser! Advice please.

  12. -I rent a house (I’ve been renting this house for 5 years)
    -I was notified that my landlord is being foreclosed on.
    -My landlord told me that I no longer need to pay him rent.
    -I currently do not have a lease/contract
    -I have not paid for February 2012 rent.
    -I received a letter on Feb 1, 2012 stating that under the Protecting Tenants at Foreclosure Act of 2009, I have 90 days to vacate the house.
    -I hired an attorney and paid him $500 to handle this matter.
    -Now I’m receiving calls from a ‘mortgage specialist’ from a bank stating that I must pay him rent.
    -I have referred the mortgage specialist to my attorney; however, my attorney is not returning his calls. (I have never met the attorney. I went to his office and met with a ‘Residential Real Estate Investor Advisor. This real estate advisor had me pay $500 and had me sign a contract. The line where the attorney is supposed to sign is blank).
    -This ‘mortgage specialist’ is calling me repeatedly. He has even visited my house a few times on Sundays!
    -The same mortgage specialist has offered me $500 to vacate the property.

    Help! What do I do?

    1. If the foreclosure has been completed then the new owner is entitled to receive rent. You may want to ask for more money to get out. Unfortunately, the bank has the right to kick you out. You may want to contact the Lawyers Committee for better Housing. They have a tenants in foreclosure project, 312-347-7600.

  13. I am renting the upper portion of a house and came home this weekend to a notice on the door from a Prudential REO Broker who I contacted later with our notice to evict deadlines. He stated that the house was foreclosed upon and that we would soon have a packet arriving in the mail explaining our rights. Does this mean that the bank is now the owner of the property? Do we continue to pay rent to the landlord? We no longer have a current lease and are considered month to month.

    1. According to Illinois law, if you have a lease then Prudential needs to honor the lease. If you are on a month to month agreement then Prudential needs to give you at least a 90 day written notice to terminate the tenancy. Yes you have to continue to pay rent. I would call Prudential to see where you should mail the rent. You may be able to negotiate a deal to move out sooner.

  14. Hey- I rent a condo and he is trying to avoid a foreclosure by doing a short sale. My lease is not up until 2013. My owner told me that the lease goes with the property- meaning that they have to honor the lease and not put me out. From what i’m hearing, that’s not true. When the new owner takes over and he wants to 1) live in the unit 2) increase my rent 3) give me 90days for move.

    My questions is when the unit is sold, regardless of my lease, they have to give me 90 day .. right? and within that 3 months do have still need to pay rent? will I receive my security deposit back from the new owner or do I just not pay for 2 months?

    any suggestion would be helpful!!

    1. If the building is sold and does not go through the foreclosure process the new landlord has to abide by the terms of the lease. The new landlord is responsible for the security deposit and you are responsible for paying the rent.


    2. I am a tenant of a recently forclosed condo. I did not recieve notificaiton from the owner, I just received corespondence from the bank (owns condo now). They have offered me cash for keys if I need to vacate in 30 days. The oher option is to rent (but I don’t know the amount of rent) and the unit is for sale so if sold I would need to move out.

      Don’t I have rights, 30 days is not a lot of notice!What can I do?

      1. If you have a lease the Bank has to honor the lease which means paying the same rent until the end of the lease term. If you are on a month-to-month agreement then the bank has to give you at least a 90 day notice to terminate and you pay the same rent for that period. Make sure that any cash for keys agreement is in writing and make sure that the agreement covers such things what happens if you are a day or two late in vacating.

  15. My building is in foreclosure. The attys. for the mortgage co. notified me of the court date. A default ord was entered, an order appointing a seller and the foreclosure is pending. Do I still pay rent? The attys. said the foreclosure sale is Jan. 31, 2012. Strangers come by and want to look at the apartment. I don’t know them. My landlord has not called me to bring anyone over. I’m not letting strangers in my home without the landlord being there. I don’t even know the real estate agent. He took my rent one day and a for sale sign was in front the next morning.The landlord does not communicate with me until its rent time. I feel I shouldn’t pay rent and just save my money to move. He’s not fixing anything and Jan is around the corner. I’ve never been evicted in my life and I don’t want to start now.I feel he is still the owner since no order of possession has been entered. But I feel I shouldn’t have to pay him a dime since I have to move. Around here they bring in their own families to live.I know my nephew used to live upstairs thats how I got this place.I mean Gee!! The guy could have said I’m in foreclosure and I’m trying to sell the building.


    1. The worst thing that could happen is the landlord could give you a 5 day notice to pay of vacate. If you do not pay then the landlord can take you to eviction court. If you lose in eviction court you will have to move. If you do not then you could lose all your furniture. If you do move you could still end up with a judgement against you for the rent, which could impact your credit rating and other landlords sometimes look to see if you have been to eviction court which could affect your ability to rent. If you get the help of an attorney you could win but you asked for a worst case scenario.

    2. The worst thing that could happen is the landlord could give you a 5 day notice to pay of vacate. If you do not pay then the landlord can take you to eviction court. If you lose in eviction court you will have to move. If you do not then you could lose all your furniture. If you do move you could still end up with a judgement against you for the rent, which could impact your credit rating and other landlords sometimes look to see if you have been to eviction court which could affect your ability to rent. If you get the help of an attorney you could win but you asked for a worst case scenario. I cannot advise you about what to do.

  17. I rent a Condo, and a process server came by and tried to serve the owner, but could not since they do not live there. I have been paying my rent on time for the past 14 months via bank transfer and just printed the transactions. What recourse do I have against my landlord;

    1. To leave an vacate the unit( I never resigned a new lease two months ago)

    2. Try to get my security deposit back.

    What should I do they won’t answer the phone or anything anymore.

    Thank you,

    1. It is impossible to answer your question without knowing the reason the process server is trying to contact your landlord. If it is because of foreclosure, the Chicago Landlord and Tenants Ordinance requires the landlord to notify you about the foreclosure action. If you are on a month to month agreement as it sounds like then the law allows tenants to leave by giving the owner a written notice to terminate the tenancy at least 30 days before the start of the rental period.

    1. Why are you asking this question? The appliance in an individual condo unit is the property of the person who purchased it, most likely the owner. If you are a tenant and appliance is a part of the lease or rental agreement (verbal or written) then there is an argument that the appliance needs to stay with the unit until the end of the rental period.

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