![]() ![]() Over and above the growing plague of boarded buildings and displaced tenants, the Lawyers’ Committee discovered an abundance of problems caused by the failure of landlords to inform their tenants (as required by law) that a foreclosure suit had been filed or by the failure of foreclosing lenders to notify tenants (as also required by law) of a change in property ownership or management. These omissions resulted in surprised tenants not having adequate time to plan a move and created difficulty when repairs were desperately needed and a new property manager could not be located. Regulations on Inheriting Tenants at Chicago Foreclosed Buildingsĭuring its investigation, the Lawyers’ Committee also found that tenant protections associated with foreclosure laws were being neglected and that tenants were either unaware of their rights or too intimidated to exercise them. The federal "Protecting Tenants At Foreclosure Act" allows tenants to remain at a foreclosed property for the duration of a bona fide lease and requires that all tenants (including month-to-month tenants) be provided at least 90 days’ notice to vacate. Nevertheless, banks and management companies were openly trampling on these rights, often by posting signs or mailing notices informing tenants that the property has been foreclosed and mandating that they vacate the premises immediately or face forcible eviction. The bank owners were also offering “cash for keys” deals that required releases of legal rights (including the right to the return of the security deposit) and often also included preconditions enabling the bank-owner to wiggle out of its financial commitment. The problem, as the Committee saw it, was self-exacerbating. Foreclosures lead to vacant and boarded-up buildings, thus diminishing the desirability (and value) of neighboring properties and triggering additional foreclosures. As a result, increasing numbers of tenants are displaced while apartment supply steadily decreases, forcing families to either “double up” or rent undesirable units. Meanwhile, unmanaged bank-owned apartment buildings fall further into disrepair and contribute to urban blight. According to a report prepared and issued by the Lawyers’ Committee For Better Housing, nearly 17,000 Chicago apartment buildings containing almost 52,000 units were hit with foreclosure between 20, and well over 90% of the affected buildings contained only five units or less. ![]()
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