On Oct. 29, a new state law went into effect that may help maintain rental housing that has been foreclosed on and ensure a minimum of 30 days notice for renters who may need to secure new housing.

“In the past, renters in foreclosed properties often have not known that their building is in foreclosure—frequently only learning about the foreclosure when they are told to leave the property.  Likewise, renters have often found themselves without any idea who owns the property, where they should be paying rent, or who to contact for repairs.  As a result, renters have found themselves homeless or living in poor conditions,” said Samantha Tuttle, Staff Attorney for the Sargent Shriver National Center of Poverty Law, which advocated for the bill in partnership with Housing Action Illinois.

Some key provisions of the new law (Public Act 96-0111) are:

Within 21 days of a foreclosure being completed, the new owner, most often the lender to the previous owner, must make a good faith effort to identify residents of the property; notify residents that the new owner has acquired the property; inform residents that the property has been the subject of foreclosure; and provide contact information for the residents.  A new owner who fails to comply with the new law may not terminate a known occupant’s tenancy for non-payment of rent. Residents may also have additional rights.

Tenants will have a minimum of 30 days to move after the eviction hearing if the tenant is evicted under the Illinois Mortgage Foreclosure Law.

Nationally, according to the National Low Income Housing Coalition, renters make up about 40% of the families facing the loss of their housing due to foreclosure and more than one in every five foreclosed properties is a rental property.  In Chicago, according to the Woodstock Institute, 32% of 2008 residential foreclosure filings were on 2-6 unit properties (6,571 filings), marking a 36% increase from 2007.

The bill’s lead sponsors were State Representative Will Burns (D-Chicago) and State Senator Jacqueline Collins (D-Chicago).  Illinois Governor Pat Quinn signed HB 3863 into law on July 31.