Illinois Property Management Laws

Managing property is a complex endeavor, regardless of how it may appear on the surface. From finding reliable and problem-free tenants to fulfilling the requirements necessary to meet standards for a habitable property, there's a lot to know about managing property in compliance with the law. All states have their own property management laws, adding to the complexity of following area regulations, Illinois included. For those new to property management or have recently relocated to Illinois from another state, there's a lot to learn in order to be successful.
This guide serves as an overview of the most important property management regulations that landlords should know about, from broker license requirements to the eviction process. With links to relevant state code sections and an explanation of guidelines, Illinois property managers can approach rental properties with ease.

Key Points

• 1Many Illinois state code sections pertaining to property management do not apply for buildings with fewer than five units, offering landlords significant flexibility.
• 2Illinois state laws are generally far looser than those of city or county-level laws; Chicago, for example, has significantly stricter laws that Illinois on the whole.
• 3Staying compliant with the law is essential to keeping a valid real estate license, which is required to continue serving as a property manager.
• 4Consider partnering with a trusted property management company to alleviate the burden of adhering to Illinois’ many complex real estate regulations.

Note: This guide is intended to be used as an educational resource. The contents within do not constitute legal advice. To obtain information regarding property management laws in your state, consult a local attorney. This guide is based only on property management laws at the state level. Local county and city laws may exist that are not discussed in this guide. Consult a local attorney to obtain information that pertains to your specific location and situation.

Property Management Laws Overview in Illinois

Property Management Laws

In Illinois, rental and leasing are considered real estate activities. Thus, broker license are required for both individual property managers as well as property management companies. The Illinois Real Estate Act describes 11 forms of actions that require a license, which includes broker transactions, advertising a vacant properties for rent, showing or providing tours of properties, maintaining security deposits and accepting rent payments.

There are exceptions to this policy, however. Those who provide general administrative duties, like providing property maintenance or acting as an accountant, does not require a license. Property managers should be vigilant about delineating which responsibilities require a license and which do not to ensure activities are legal.

Eligibility for a broker license is as follows:

• A high school diploma or GED
• At least 21 years old
• 90 hours of broker education and an additional 30 hours of post-licensing education
• Passing score on the broker license exam
• $125 fee

Illinois also offers a leasing agent license. This can be obtained with a 15-hour course, a leasing agent exam and a $75 fee, as well as meeting age and education requirements.

Rental Application Laws

What application fees are allowed?

There are no limits on application fees in Illinois. Landlords are permitted to charge any amount that will cover any required screening processes. This fee is assumed to be non-refundable and there are no statutes that allow for circumstances in which applicants can apply for a refund. There may be county, city or regional rules related to application fees.

Can landlords screen potential renters?

Landlords are permitted to screen potential renters in any way they see fit, including background checks and credit checks. Signed consent forms are required to run any of these tests.

It is important to note that the results of a background check cannot be used to discriminate against those with protected characteristics under the Fair Housing Act of 1968, like gender, age, race or familial status. The Illinois Human Rights Act also protects against discrimination. State level laws in Illinois are more extensive than the federal protections, including things like sexual orientation and gender identity.

Security Deposit Laws

Are additional move-in fees allowed?

There are no rules related to additional move-in fees in Illinois. Landlords are permitted to include additional reasonable fees for those moving into a property. Additional county, city or regional rules about move-in fees may apply.

Is there a limit on the security deposit amount that can be charged?

There is no Illinois state law on the security deposit amount a property manager can charge. Most landlords will not exceed one month’s rent, but this will vary from one property to the next. Additional county, city or regional rules about security deposits may apply.

Does the landlord have to hold the security deposit in a specific way during occupancy?

There is no Illinois state law related to holding short-term security deposits, but escrow accounts are common. Additional county, city or regional rules may apply.

There are laws related to interest on security deposits, however. If a landlord holds a security deposit for longer than six months for a tenant living in a building with 25 units or more, interest must be repaid to the tenant in the form of a credit against rent every 12 months (765 ILCS 715/). If a landlord fails to meet this requirement, a circuit court can find him liable for the full amount of the security deposit, plus court costs and attorney fees. If interest is to be paid, security deposits must be held in a separate account.

How long does the landlord have to return the security deposit after move out?

For landlords managing properties with five or more units, security deposits must be returned within 45 days of the date the tenant vacated the property (765 ILCS 710). However, if any part of the security deposit is being withheld for covering damages, landlords must provide an itemized list of the damages and the repair costs within 30 days, in person, by mail or email.

If the building has fewer than five units, there are no laws regarding the time line for the return of a security deposit. However, additional county, city or regional rules may apply to security deposits, regardless of the size of a property.

What are the reasons why a landlord can withhold part or all of the security deposit?

A landlord can withhold part of a security deposit in order to make repairs that exceed the boundaries of regular wear and tear (765 ILCS 710). The amount withheld must correspond with the actual price of required repairs, and these amounts must be provided to a tenant within 30 days of vacating the premises. If there are no actual receipts to use as evidence of these costs through no fault of the landlord, landlords must provide as much information as possible to support amounts withheld.

What is the penalty if the landlord doesn’t return the security deposit?

If a landlord doesn’t return the security deposit amount as is required by law, they may be liable for double the amount of the security deposit, plus any applicable court fees and reasonable lawyer costs (765 ILCS 710).

Laws About Leases and Lease Termination

What types of lease terms are allowed?

Illinois does not limit the kinds of lease terms available to tenants. Leases can be oral or written – although written leases are the most common – and can be week-to-week, month-to-month or annual. The latter is conventional, but other arrangements are possible. Additional county, city or regional rules regarding lease terms may apply.

What happens in the tenant violates the lease?

If a tenant violates a lease agreement, landlords are permitted to take action. If rent goes unpaid, landlords are permitted to tell tenants to pay the rent within five days or vacate the unit (735 ILCS 5/9-209). Other circumstances that are in violation of the rent require a ten-day notice period to remedy violations or vacate the premises. If a tenant does not follow the notice to vacate provided by the landlord, the eviction process can begin. The tenant may also be subject to double the rent for the amount of time the tenant remains in the unit if staying in the unit is deemed willful.

When can a tenant terminate a term lease without penalty?

There are several situations in which a tenant in Illinois can terminate a lease term early. These include:

• Starting an active duty military tour: The War and National Defense Servicemembers Civil Relief Act, 50 App. U.S.C.A. § § 501 federal law allows military members to terminate a leases in any state in the country without penalty. A lease will terminate 30 days after notice is delivered.
• Domestic or sexual violence: In Illinois, if evidence can be provided of domestic or sexual violence, like a police report, it is legal to terminate a lease agreement (765 ILCS 750/).
• The rental unit violates health or safety codes: If property is not maintained to the standard legally required, tenants are permitted to terminate a lease without penalty (765 ILCS 750/).

How and when can a landlord evict a tenant?

A landlord can evict a tenant when terms of the lease have been violated and tenants have taken no action to remedy the situation (735 ILCS 5/9-209). For example, if rent is not paid and a tenant does not willingly vacate the unit after the five-day notice period, a landlord can contact the courts to begin the eviction process. However, if rent is paid in this amount of time, or if violations are corrected within the time limit on a notice, landlords are not permitted to proceed with eviction.

How much notice does a landlord have to give before making changes to the property that result in the termination of tenancy?

Landlords must provide written notice of intent to terminate a lease at the end of a lease term, with a month’s notice for month-to-month leases and a week’s notice for week-to-week leases (735 ILCS 5/9-207). Landlords do not need to provide any reason for terminating a lease.

Does a tenant have to keep paying rent after violating lease terms?

In some cases, tenants must continue paying rent for the remainder of a lease agreement, even after vacating the premises. If a tenant violated a lease agreement, landlords must make reasonable efforts to re-rent the property as soon as possible (735 ILCS 5/9-213.1). If a new tenant can be found quickly, the previous tenant only owes the amount the landlord lost while seeking a new renter. However, if no appropriate tenant is available, former tenants will still owe rent for the remainder of the lease. Security deposits can be used toward this amount. The maximum amount that can be sued for in small claims court is $10,000 in Illinois.

Laws About Rent and Late Fees

When can a landlord increase rent?

Landlords can increase rent whenever the term of a lease is up. Notice policies for termination of leases apply to rent increases as well (735 ILCS 5/9-207).

Is there a maximum amount of rent that a landlord can charge tenants?

No. There are no laws related to rent control in Illinois so landlords can increase rent by any amount deemed necessary. Additional county, city or regional rules may apply. This law does not apply for subsidized housing programs.

Is there a state-mandated grace period that landlords must give tenants before charging a late fee?

Yes. Late fees cannot be imposed until five days have passed (770 ILCS 95/7.10). After this point, landlords can impose reasonable late fees or can request the commencement of the eviction process.

Is there a limit on how much of a late fee the landlord can charge tenants?

Landlords are required to impose reasonable late fees, which is defined as 20% of the amount due or $20, whichever is higher (770 ILCS 95/7.10).

Legally Required Disclosures

What types of disclosures are landlords required to supply regarding ownership of the property?

In Illinois, landlords are required to make numerous forms of disclosures to tenants prior to moving in. These include:

• The presence of radon gas: This only applies if there is an active presence; if not, there is no requirement to make radon disclosures (420 ILCS 46/).
• Master-meter use: If a landlord uses one meter for the building, disclosure about how utilities will be split is required (765 ILCS 740/).
• Re-keying locks: Landlords are required to re-key locks prior to moving in new tenants and disclose this (765 ILCS 705/15).
• Rental agreement disclosures: Within a rental agreement, landlords are required to provide several other forms of disclosures, including:
  • The party responsible for utilities (765 IlCS 740)
  • If a property is in foreclosure
  • The presence of asbestos
  • The identity of the property owner

  Additional county, city or regional rules may apply. Chicago, in particularly, is known for harsher property management rules and further disclosures.

  What disclosures related to mold are landlords required to supply?

  There are no state-level mold disclosure requirements in Illinois. Additional county, city or regional rules may apply.

  What disclosures related to lead paint are landlords required to supply?

  There are no state-level lead paint disclosure requirements in Illinois. However, this is required on a federal level for buildings built before before 1978, so landlords should be prepared to disclose regardless.

  Laws about Landlord Responsibilities

  How much notice does the landlord have to supply before entry?

  In Illinois, landlords must give tenants at least 24 hours’ notice prior to entry (765 ILCS 705/7). Further, entry is only permitted during reasonable hours, which are defined as between 8 AM and 6 PM. Entry with notice extends to things like repairs or showing the property to prospective tenants.

  When can the tenant refuse to allow the landlord entry?

  Tenants can refuse entry during unreasonable times or when notice is inadequate (765 ILCS 705). For example, if a landlord attempted to enter a unit at midnight without notice, a tenant could deny entry.

  What steps must the landlord take to keep the property habitable?

  In Illinois, landlords are required to maintain structures based on local building code. In areas in which there is no specific code related to housing, landlords must use what the court considers “community standards” to assess whether a property can be considered habitable.

  What utilities must the landlord supply and maintain?

  Landlords must make sure all rental units have heat, electricity, and water (765 ILCS 735). Unless stated otherwise in the lease agreement, landlords are assumed to be responsible for utility costs. If tenants are to pay utilities themselves, landlords must provide 12 months of heating bills to demonstrate average rates. If tenants are asked to pay utilities to a landlord rather than directly to the utility company, landlords are not permitted to charge amounts in excess of actual billed services (Act 765 ILCS 740).

  Tenants are never obligated to pay for utilities in common areas. Further, utility companies aren’t permitted to turn off utilities without providing notice to all tenants in a building.

  Does the landlord have to supply a certificate of inspection?

  No. However, all properties are required to have a warranty of habitability, even if this is merely implied (765 ILCS 735). This expectation means that landlords will keep buildings structurally sound, maintain common spaces, elevators, and basements, maintain walls, flooring, windows, doors and roofing, and ensure spaces are free of potential health hazards, like gas leaks.

  Is the landlord required to supply locks and keys?

  Yes. Landlords are required to re-key apartments before new tenants move in (765 ILCS 705/15), unless:

  • The tenant has requested to re-key independently
  • The lock situation is handled otherwise in the lease agreement
  • The building has four units or less
  • A unit in the building is occupied by the building’s owner
  • The county has over 3,000,000 residents

  Are retaliatory actions prohibited?

  Yes. Retaliatory actions are prohibited under Illinois law, like attempting to raise rents higher than market prices in response to something like joining a tenants’ union or re-keying locks to force a tenant out (765 ILCS 720). This also includes adding terms to a lease that would nullify this law.

  Property Maintenance and Repair Laws

  What type of maintenance is the landlord responsible for?

  Landlords are required to provide all repairs necessary to keep an apartment habitable, including repairs to plumbing, electricity, locks and other necessities (765 ILCS 742/). Other repairs, like cosmetic upgrades, are at a landlord’s discretion.

  How long does the landlord have to make repairs?

  From the time tenants make requests, landlords have 14 days to respond. After this point, tenants are permitted to make repairs themselves and deduct the costs from the next month’s rent (765 ILCS 742/). If the situation is an emergency and landlords don’t act, tenants can take action as soon as necessary.

  What type of maintenance is the tenant responsible for?

  A tenant is responsible for any damage they caused to the property, like putting a hole in the wall, as well as any damage caused by guests of a tenant (765 ILCS 742/). Tenants are also obligated to pay costs for repairs that don’t influence habitability.

  When can a tenant request an official inspection to determine substandard or dangerous living conditions?

  There are no laws in Illinois regarding when a tenant can take legal action due to perceived inadequacies of a property. Tenants are always permitted to contact state health and housing departments to request evaluations.

  Under what circumstances can a tenant make a repair and deduct the cost from the rent paid to the landlord?

  Tenants are permitted to make repairs to essential property features when landlords fail to do so by the 14-day time limit (765 ILCS 742/). This time line is disregarded in the case of emergency repairs, like frozen pipes in the winter. In order to legally be able to deduct these amounts from rent, tenants need to provide receipts with repair costs as evidence of the financial sacrifice.

  When is a landlord required to pay for relocation assistance?

  There are currently no state laws related to relocation assistance. A a relocation assistance program in place.

  Who Is Exempt?

  There are a few exceptions to coverage under the majority of Illinois’ property management laws. For example, mobile homes have a separate code section that applies to landlord requirements and rights (765 ILCS 745/), so many general laws do not apply in the same way.

  In addition, there are certain laws that pertain to Section 8 housing that aren’t applicable to standard rental property. Rent, for instance, can’t be raised arbitrarily as the amount charged must not exceed 30% of a family’s annual income. As such, landlords cannot raise rents arbitrarily as with other units.

  As mentioned above, rental properties with fewer than five units are often exempt from policies, like security deposit rules on interest collection (765 ILCS 715/) and re-keying requirements (765 ILCS 705/15).

  The information provided in the Illinois Compiled Statutes (ILCS) is very valuable for those considering property management in Illinois. However, there are plenty of other resources that landlords can use to stay informed about Illinois property management policies.

  Additional Rental Law Resources for the State of Illinois

  These resources help tenants and property managers better understand their rights and provide access to helpful tools and services.

  Name	Phone Number	Description
  Illinois Department of Human Rights Housing Information	(312) 814-6200	Information about housing discrimination provided by the Illinois Department of Human Rights.
  Attorney General Landlord and Tenant Rights	(312) 814-3000	Summary of landlord and tenant rights as provided by the Illinois Attorney General.
  Division of Professional Regulation FAQ	N/A	Information about licensing for real estate agents and brokers.
  Illinois Legal Aid Online Landlord and Tenant Resources	N/A	A synopsis of tenancy laws as outlined by the Illinois Legal Aid Society, a nonprofit legal resource.

  Note: This guide is intended to be used as an educational resource. The contents within do not constitute legal advice. To obtain information regarding property management laws in your state, consult a local attorney. This guide is based only on property management laws at the state level. Local county and city laws may exist that are not discussed in this guide. Consult a local attorney to obtain information that pertains to your specific location and situation.

  Related Resources
  • Property Management for Single-Family Homes
  • How to Find a Quality Property Management Company
  • Tips for Better Tenant Management
  • What is HOA Property Management?
  • California Rental Law: Tenant and Landlord Rights and Responsibilities