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NOTICE REQUIREMENTS AND FILING TIMELINES UNDER CURRENT AND FUTURE STATE AND FEDERAL LAW SUMMARY OF STATUTORY REQUIREMENTS OCCUPANTS WITH BONA FIDE LEASE BONA FIDE TENANTS WITH NO LEASE COMMENTS Protecting Tenants at Foreclosure Act (PTFA) PTFA § 702. Ninety days notice must be given to tenants, occupants, and parties in possession before filing Forcible Entry and Detainer (FED). File FED 90 days after PTFA notice is given and/or after lease expires. File FED on the later of: 90 days after PTFA demand is served or 30 days after the Order Approving Sale (OAS) is entered. Applies to all tenants, occupants, and parties in possession. IL Mortgage Foreclosure Law (current) Duty to ascertain indentity of occupants; duty to serve occupants with statutory notice within 21 days of confirmation of sale; duty to post statutory notice on property within 21 days of confirmation of sale– notices must provide occupants a contact for repair or other issues. If you learn of an additional occupant, duty to serve notice within 7 days. File FED after lease expires and 90-day state notice is served. File FED 90 days after PTFA demand is served or 30 days after OAS is entered. Prohibited from attempting to collect rent unless owner is in full compliance with the Illinois Mortgage Foreclosure Law's 21-day post/serve notice requirements; cannot attempt to evict for non-payment of rent. IL Mortgage Foreclosure Law, SB 56 (signed into law Aug. 21, effective Nov. 19, 2013) Makes clear that completion of foreclosure does not terminate tenancy; adds additional requirements to existing law as follows: additional language on 21 day post-confirmation (post/serve) notices to provide contact for purpose of paying rent; 90 days written notice [to all tenants, occupants, and parties in possession] before filing eviction. File FED after lease expires and 90-day state notice is served. File FED 90 days after PTFA demand is served or 30 days after OAS is entered. Prohibited from attempting to collect rent unless owner is in full compliance with the Illinois Mortgage Foreclosure Law's 21-day post/serve notice requirements; cannot attempt to evict for non-payment of rent. Keep Chicago Renting OrdinanceChicago only (KCR) Within 21 days of taking title to the property; must serve and post a statutorily mandated notice; duty to re-post/serve within 7 days upon learning of additional occupants; requires the owner register the property and file an affidavit with the registration identifying the occupants; requires the owner to either offer lease extension or provide $10,600 in relocation assistance. Parallels the IL Mortgage Foreclosure Law and PTFA. Parallels the IL Mortgage Foreclosure Law and PTFA. Prohibited from attempting to collect rent unless owner is in full compliance. If continuation of lease is not offered, must pay $10,600 within 7 days for relocation; provides private right of action with fee shifting; Notices must be provided in English, Spanish, Polish, and Chinese. IL Eviction Law § 9-209. Notice for failure to pay rent–5 days. § 9-210. Notice for non-monetary defaults–10 days. § 9-213. No notice is required if there is a lease which has expired. § 9-207. Notice to quit not based on a tenant default where there is no written lease (a term of less than one year)–30 days. § 9-215. Gives sucessor owners the right to enforce leases. FED may not be filed until after the lease term expires and 30-day state notice is served. File FED 90 days after PTFA demand is served or 30 days after OAS is entered. Must have valid reason under IL law to file FED action; all notices must be properly given before filing. notices in English, Spanish, Polish, and Chinese. In addition, the owner must register the property and supply or file an affidavit with the city. If the tenant, after receiving the notices, decides to vacate without notice, they must receive $10,600 in certified funds within seven days or they can file a potential lawsuit from which they can recover twice the amount specified for relocation assistance; any additional damages, including the return of their security deposit; and attorneys' fees and costs. Those requirements are above and beyond both the PTFA notice and a notice to evict under state law. It's not just a lack of clarity, but it's illogical. Clarity in Receivership If the servicer obtains a receiver, the receiver identifies the occupants to whom the 94 notices are provided. Clarity. In addition, the servicer can avoid the notice requirements and associated liability by having the occupant evicted before becoming the property owner but only if the occupant fails to pay the rent. Greater clarity. In the event the occupant remains current, the receiver has an asset that should pay for itself. Rent should be used to fund the receiver and pay the insurance. All of this happens while the REO broker markets the property. Although most servicers do not want to be in the property management or rental business, a performing asset holds more potential sale value than a vacant building. While the best bet is to appoint a receiver whenever possible and potentially eliminate the need to deal with these post-sale issues during the foreclosure, servicers in a landlord-by-default situation should: » maintain a strong network of asset managers, » retain the occupants and the rent roll, and » market the property "as is." Most people understand that tenant occupants find themselves in a hard situation when the property owners—their landlords—face foreclosure, and most agree that those tenants are entitled to protection. Requiring 10 notices in four different languages, on top of PTFA or state eviction notices; rent control; $10,600 for relocation assistance; and the possibility of a fee-shifting suit from a consumer's lawyer, however, goes too far. Matthew C. Abad is director of foreclosure and bankruptcy operations at Kluever & Platt, LLC, in Chicago.

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