If you buy an occupied residential property in Chicago, the city's Residential Landlord and Tenant Ordinance governs the relationship from day one. It is more prescriptive than many investors expect, and the penalties for getting it wrong are specific.
What it covers
Most residential rental units in the City of Chicago, with limited exceptions — notably owner-occupied buildings of six units or fewer, which are treated differently.
Suburban Cook County has its own separate ordinance covering much of the unincorporated and many incorporated areas, so a property in Calumet City is not governed by the Chicago ordinance.
Security deposits are the common failure
The deposit rules are strict: how deposits must be held, that interest is payable, the receipts required, and the timeframes for returning a deposit and itemising deductions.
This is where most inadvertent violations happen, and the remedies available to tenants are meaningful. If you inherit deposits at closing, make sure they are transferred and documented properly.
Notices and disclosures
The ordinance requires specific disclosures at the outset of tenancy and prescribes notice periods for various circumstances, including notice before non-renewal — which changes with the length of tenancy.
A summary of the ordinance must be attached to leases. It is a small administrative step that is easy to overlook when you take over a building mid-tenancy.
Maintenance obligations
Landlords must maintain the property to code, and tenants have defined remedies where that does not happen. Buying a building with deferred maintenance and an occupied rent roll means inheriting both the obligation and the timeline.
The practical advice
Read the ordinance itself, or have a property manager who plainly knows it. If you are buying occupied property in the city and this is new to you, the cost of an hour with an attorney is trivial against the cost of a deposit dispute.
This is a general outline and not legal advice.