If you own rental property in Chicago and are considering selling, a significant change in the law just made the process more intricate. Chicago's Right of First Refusal (ROFR) ordinance has recently expanded its pilot program—effective April 2026—granting tenants a powerful new right to purchase their buildings. The unfolding Logan Square case, where tenants are actively exercising this right, is a stark reminder that landlords must now navigate a new legal landscape that could profoundly impact property sales.
What Landlords Need to Know About the Expanded ROFR
The ROFR ordinance isn't entirely new, but its recent expansion gives tenants a stronger position. Essentially, it mandates that when you decide to sell your residential property, you must first offer your tenants the opportunity to purchase it—typically under the same terms as any third-party offer you receive. This isn't just a suggestion; it's a legal obligation with specific notification and timeline requirements.
How the ROFR Impacts Your Sale Process
For landlords, the ROFR can introduce several new considerations into the sales process:
| Consideration | What It Means for You |
|---|---|
|
Mandatory Notification |
You are legally required to notify your tenants of your intent to sell and provide them with the details of any bona fide offer. Failing to do so can lead to legal complications. |
|
Potential Delays |
Tenants are granted a specific period to evaluate the offer, organize, and secure financing. Your sales timeline may be extended while you wait for their decision before proceeding with a third-party buyer. |
|
Increased Complexity |
Multi-unit buildings with multiple tenants require careful management of negotiations and strict adherence to legal timelines. |
|
Transaction Uncertainty |
Tenants may have the right but struggle to secure financing—meaning you could wait through their ROFR period only for the purchase to fall through. |
|
Higher Legal & Administrative Costs |
Ensuring compliance, drafting correct notices, and potentially negotiating with tenant groups can increase your legal and administrative expenses. |
The Logan Square situation highlights these challenges in real time, as developers face organized tenant resistance and the complexities of the expanded ordinance.
Protecting Your Interests: Navigating the New Landscape
While the ROFR aims to empower tenants, property owners also have rights that need protection. Before listing your property, here are key steps to protect your interests:
- Seek Early Legal Consultation. Before listing your property, consult with a real estate attorney who specializes in Chicago's ROFR. They can advise you on compliance, timelines, and best practices.
- Understand Notification Requirements. All tenant notifications must be precise, timely, and meet the ordinance's specific demands to avoid future disputes.
- Prepare for Delays. Factor the ROFR review period into your sales timeline expectations from the outset.
- Plan Strategically. An attorney can help you structure offers and counter-offers in a way that respects the ROFR while still maximizing your property's value.
- Document Everything. Maintain meticulous records of all communications, offers, and deadlines related to the ROFR process.
The expanded ROFR ordinance is a game-changer for Chicago landlords. Proactive legal guidance is not just recommended—it's essential to ensure a smooth and legally compliant sale. Don't let new regulations catch you off guard.
If you're a Chicago landlord considering selling your property, contact CTM Legal Group today. We can help you navigate the complexities of the ROFR ordinance and protect your investment.
LEGAL DISCLAIMER: This blog post is for informational purposes only and does not constitute legal advice. Do not rely on this information for legal decisions. CTM Legal Group is not your attorney unless we have a signed, written retainer agreement in place. For specific legal advice regarding your situation, please consult with a qualified attorney.
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