Come midnight Wednesday, an innocuous-sounding Chapter 193.1 will be written into the city`s municipal code signaling–depending on who is asked
–emancipation for 1.5 million renters or the exodus from Chicago of rental property owners.
”This is the turning point,” said a jubilant Ralph Scott, organizer of the Rogers Park Tenants Committee. ”Nothing else we`ve tried will have this effect.”
”They think Chicago stinks,” said Chicago Board of Realtors president Gerald Perlow of rental property owners. ”They`d rather escape to Arizona, where you can get a good return on your money and avoid the government harassment.”
The focus of the simultaneous celebration and consternation is the Residential Landlord and Tenant Ordinance, a sweeping reform of rental law that, after a seven-year incubation, will take hold on Wednesday. And though predictions of its impact vary wildly, there is little debate among observers as to who will benefit.
”In terms of tenants` rights,” said William Wilen, director of housing litigation for the Legal Assistance Foundation of Chicago, ”the difference between Oct. 14 and 15 is the difference between night and day.”
In the storefront offices of tenants` rights groups and the headquarters of the city`s real estate leaders, strategies for harnessing the ordinance have been mapped and, combined, foreshadow a long and possibly bitter conflict over use of the code.
Though Board of Realtors offi-cials had been relatively silent on the ordinance after its passage last month by the Chicago City Coun-cil, Perlow said in an interview Friday that the realty group will file a suit in federal court Wednesday seeking an immediate in-junction against the new law.
According to Perlow, who contends the ordinance violates the constitutional rights of property owners, ”it`s not even law yet and already there has been a tremendous change in the relationship between owners and tenants. People who were once cordial to one another are now adversaries. Tenants are now saying, `You fix my water pressure or else.` ”
Tenants` rights activists deny that relations with cooperative landlords will be strained by the ordinance, but they have already launched efforts to use the code`s new muscle in challenging those landlords they regard as most unresponsive.
Scott, of the tenants committee, says the Rogers Park group has organized about 100 tenants living in area buildings owned and managed by an Evanston-based real estate dealer. On Wednesday they will file notices with the landlord informing him of repairs they will make in their apartments, the cost of which they will deduct from their rents.
Scott said the tenants have been petitioning the landlord, Earl Niemoth, president of Create Inc., to make the repairs for five months but that he has been unresponsive. Come Wednesday, Scott said, the ”repair and deduct”
provision of the ordinance will allow them to proceed without Niemoth`s help. ”With the tenants` bill of rights we finally have a real tool,” Scott said. ”We don`t intend to be bashful about our rights. We`re going to test the limits.”
Niemoth declined to be interviewed, saying through a spokeswoman that he would have a ”statement for the press” on Tuesday.
Harold Rider, president of a Chicago real estate management company that oversees about 4,000 apartments, said the fear of landlords is that a small but troublesome minority of tenants will abuse the ordinance, authorizing unnecessary ”repairs” in their apartments, driving up rents and flooding the courts with landlord-tenant disputes.
”If tenants start to withhold rent or repair and deduct, there will be less impetus for landlords to upgrade their buildings because they can`t be sure of their income,” Rider said. ”I don`t think there`s any question that rents will go up as a result.”
But observers of the effects of such legislation in other municipalities contend that such fears are unfounded and add that the percentage of tenants who use their new rights is relatively small.
”It`s naive of people to think that a provision like repair and deduct will be abused or even used much,” said Ald. David Orr (49th), sponsor of the ordinance. ”The experience in other parts of the country is that most tenants prefer not to take the time and, even if they do, there are limits on how much they can deduct. There are some good landlords who are just downright confused about this.”
Henry Rose, assistant professor of law at Loyola University and one of the drafters of Chicago`s ordinance and of a nearly identical one in Evanston, concurs.
”In Evanston, where the housing market is more parallel to Chicago`s than people think, the law did not have the kind of impact critics said it would,” Rose said. ”There was no shred of evidence that rents increased as a result. Nor was there this explosion of litigation. The ordinance simply gets landlords and tenants talking to each other and gives them a way to amicably settle problems.”
According to Laurel Talkington, housing planner for the City of Evanston, which has had its ordinance since 1975, there are no statistics on the effectiveness of the suburb`s law nor on the number of tenants who have exercised it. But Talkington said her assessment is that ”the real impact of the ordinance is as a public relations tool for increasing community awareness.”
”I have found that rent-withholding is used as a last resort,” she said. ”In fact, tenants usually don`t get what they want unless they bring the city into it and owners are threatened with suits for not bringing their buildings up to code.”
All of which causes some people to wonder: What`s the use?
”You expect me to be exuberant about it, right?” said Michael Pensack, executive director of the Evanston-based Tenants Organization of Illinois. Yet, according to Pensack, the suburb`s tenants` rights code has had a
”marginal effect” on Evanston`s landlords.
”The resistance of landlords to it is so implacable that it`s hard to exaggerate,” he said. ”Getting compliance has been much more difficult than I ever imagined. I think it will make very little difference in the lives of tenants in Chicago because that`s what it`s made in Evanston–a little difference.”
The average complaint rate against Evanston landlords is 6 percent, Pensack said.
Orr, the Chicago alderman, contends that the ordinance will have ”a positive, measurable effect–the key being that decent tenants will feel they have options.” Nevertheless, he acknowledges the law`s limits.
”It`s not a panacea,” he said. ”The housing problems of this city are too enormous for this one ordinance to fix.”
Among other things, said Orr, housing court reforms and tougher building inspections are needed to ”put teeth” in the ordinance.
”Both the alarmists and the optimists will need to wait a while before we see how this unravels,” said Wilen, of the Legal Assistance Foundation.
”There are a lot of unknowns and it will take a few months, maybe even a few years, before one can answer the question: Has this done any good?”
HOW RENTAL REFORM ORDINANCE WILL WORK
Chicago`s Residential Landlord and Tenant Ordinance goes into effect Wednesday, with the exception of some security deposit provisions that become law Jan. 1. Here is a list of the ordinance`s protections for landlords and tenants, based on interpretations of the ordinance by the Legal Assistance Foundation of Chicago and the city`s Department of Housing.
TENANT RIGHTS:
— Situation: Landlord fails to make repairs.
Remedy: Tenant may invoke the ordinance`s ”repair and deduct” provision by first giving the landlord written notice of the repair problem. If the repair is not made within 14 days, tenant may withhold a portion of the rent reflecting the apartment`s reduced value or pay for the repair and deduct up to $200 or one-fourth of the month`s rent. The tenant must give the landlord the receipt for the work and may not withhold more than the cost of the repair.
— Situation: Landlord fails to provide essential services, such as heat, water, electricity, natural gas or plumbing.
Remedy: After giving written notice, tenant may restore the services and deduct the cost from the rent, recover damages and legal fees or find substitute housing and sue the landlord for up to one month`s rent paid elsewhere.
— Situation: Landlord fails to provide a receipt for a security deposit. Remedy: Tenant is entitled to immediate return of security deposit.
— Situation: Landlord fails to return security deposit or pay the required 5 percent interest on the deposit.
Remedy: Tenant may recover damages equal to twice the security deposit, 5 percent interest, court costs and legal fees.
— Situation: Landlord illegally enters the tenant`s apartment.
Remedy: Tenant may cancel the rental agreement and collect one month`s rent or damages plus legal fees.
— Situation: Landlord fails to supply tenant with a list of the building`s code violations.
Remedy: Tenant may break the lease.
— Situation: Landlord tries to evict a tenant, increase rent or decrease services because a tenant ”in good faith” complained to a government agency or the media or joined a tenant`s group.
Remedy: Tenant is protected from eviction and can recover possession or cancel the lease and, in either case, collect up to two months` rent or twice the damages and legal fees.
— Situation: Landlord refuses to change illegal provisions in the lease or attempts to enforce an illegal provision.
Remedy: Tenant may recover up to two months` rent plus legal fees and may cancel lease.
— Situation: Landlord unlawfully locks out tenant.
Remedy: Tenant can file a suit and reclaim the dwelling and up to two months` rent and legal fees.
LANDLORD RIGHTS:
— Situation: Tenant doesn`t pay rent.
Remedy: After giving a five-day notice, the landlord may cancel the lease.
— Situation: Tenant damages property, misuses plumbing, heating, etc., fails to pick up garbage or in some other way violates legal lease provisions. Remedy: Landlord may cancel the lease if the tenant doesn`t fix the problem after a 10-day notice, obtain damages and legal fees or make a repair and charge it to the tenant after giving 14-day notice.
— Situation: Tenant illegally breaks the lease or abandons the building. Remedy: Landlord must try to re-rent the unit but may collect from the old tenant any loss of rent plus the cost of advertising for a new tenant.
— Situation: Tenant fails to remove personal property after lease ends.
Remedy: Landlord may store the property for 7 days and then dispose of it. If landlord thinks the property is valueless or perishable, it may be disposed of.
— Situation: Tenant refuses to allow the landlord lawful access.
Remedy: Landlord may cancel the lease and collect damages and legal fees.
