By Asssociate Attorney Cassandra Voissem
What should be included with a lease?
If you are a tenant in Chicago, you have likely come across a lengthy lease with one or more of your landlords. If you are a landlord, you probably want to know what you have to include and what is ancillary. There are multiple things that need to be included in Chicago lease or disclosed with an offered lease under the Chicago Residential Landlord Tenant Ordinance (“RLTO”) [Chicago Municipal Code 5-12-010 et seq].
With a lease agreement there are multiple disclosures the landlord has to make to comply with the RLTO. A landlord must attach a summary of the ordinance that is prepared by the commissioner of the department of planning and development every year to comply with RLTO 5-12-170. Landlords frequently use outdated summaries, which are not compliant. Under the provision if the correct summary is not provided, the tenant can actually terminate their lease with very little notice. Included with this summary should be the interest rates on the security deposit for the current year of the lease and the two years preceding the lease. RLTO 5-12-170. Again, landlords must provide a new summary every year, meaning if the tenant renews a lease agreement a new summary must be attached.
Additionally with a new lease agreement or a renewal of an old lease, the landlord must disclose any code violations cited by the City of Chicago, any compliance board proceedings or any code enforcement litigation that occurred/were ongoing during the previous 12 months not just for the unit but for common areas as well. RLTO 5-12-100(a). Many condo owners who rent out their owned units might be unaware of code proceedings against the condo building itself and fail to attach these disclosures as required.
Also, landlords need to disclose the owner's name, address and telephone number and the name, address and telephone number of an authorized agent for service. RLTO 5-12-090. An authorized agent for service is someone who the landlord is stating may accept service on their behalf if an issue were to arise in the tenancy, it can be the landlord/owner but it doesn't have to be. You will see on many form leases two boxes for just this information – yes both boxes must be filled in. Landlords also have a duty to keep this information updated – so if they or their agent moves, they have to provide an updated disclosure.
IF SECURITY DEPOSIT TAKEN
If a landlord takes a security deposit – the name and address of the financial institution where the security deposit is going to be held needs to be on the front page of the lease. (RLTO 5-12-080(a)(3)).
The landlord should also provide a security deposit receipt with the following six requirements listed on the receipt under RLTO 5-12-080(b)(1):
- The amount of the deposit;
- The name of the person receiving it;
- The name of the landlord (if different than the person receiving the deposit);
- The date the deposit was received;
- The full address of the Unit; and
- The signature of the person accepting the deposit
The receipt can be electronic if the deposit was electronic (via Chase Quickpay, Zella or automatic bank transfer) but it still has to comply with the above six requirements however, digital signature will suffice.
All of the above must be provided to tenants under the RLTO, even if the lease is oral and not written. It might seem weird that you have an oral lease with paperwork, but in order to comply with the ordinance these notices and disclosures are required.
There are a lot of rules to lease agreements in Chicago. It is highly recommended that both tenants and landlords seek counsel if they have questions about what is a contractual agreement. CTM Legal Group is well versed in the RLTO and in general landlord-tenant matters. "The attorneys at CTM Legal Group have a great deal of experience in landlord/tenant matters and would be happy to offer you their expertise," says Joe Coli, Partner at CTM Legal Group. If you have questions about your rights or your duties, please call us.
CTM Legal Group
77 W. Washington St.
Chicago, IL 60602