Vital Chicago Rental Lease Clauses, Addendums, and Disclosures for 2023

Introduction to Attorney-Drafted Chicago Leases

When it comes to leasing a property in Chicago, your lease agreement must include specific clauses, addendums, and disclosures. These terms are crucial in protecting the interests of both landlords and tenants. Further, they help avoid any misunderstandings that may arise during the lease term. Often, they are crucial for the safety of the tenant and the quality of the housing.

These essential clauses to your Chicago lease agreement include the rent payment clause, maintenance and repair clause, tenant rights and responsibilities clause, and lease renewal clause. These clauses define the tenant’s responsibilities, the landlord’s obligations, and the conditions for renewing the lease.

Additionally, in Chicago, landlords must provide tenants with key documents. You must include the summary of the city’s Residential Landlord and Tenant Ordinance. But, also, a lead-based paint disclosure, bed bug disclosure, mold disclosure, heating cost disclosure, and others. Adding these vital lease clauses, addendums, and disclosures will ensure that your lease agreement is comprehensive and legally binding. However, always consult with an attorney to ensure that your lease complies with local laws and protects your interests.

Explanation of a Chicago Apartment Lease Agreement

A lease agreement is a legally binding contract between the landlord and the tenant that outlines occupancy. Somewhat confusingly, the Chicago Residential Landlord Tenant Ordinance requires terms and conditions as an additional document. A lease agreement outlines the tenant’s responsibilities, including rent payment, maintenance and repairs, and adherence to any rules and regulations. You want to make sure that the tenant understands what they must do while they live in your unit. But, lease agreements aren’t just for tenants. The lease agreement also outlines the landlord’s obligations, including property maintenance and repairs, and adherence to any legal requirements. In this way, you can manage expectations for the tenants.

Importance of Having Good Language in a Lease Agreement

A Chicago Lease Agreement establishes a legal framework for dispute resolution. This is indispensable to expedite court proceedings. Out-of-court resolutions make everything cheaper. Moreover, the lease agreement provides legal protection to the landlord in case of a dispute. Without a lease agreement, it can be challenging to prove the terms, making it difficult to take legal action later. Therefore, having a lease agreement in place is critical to protect your interests as a landlord. We want to ensure a smooth and hassle-free rental experience.

2023 Chicago Lease Agreements Aren’t the Only Form You Need

In addition to the lease agreement, landlords are required to provide lease disclosure documents, outlining any problems for the tenant. In Chicago, this includes lead paint, heating, bed bugs, radon, and mold issues. You must also share the Chicago RLTO summary to make sure that folks know their tenant’s rights. Failing to provide this document can result in legal complications and significant financial losses.

Furthermore, Landlords are required by law to provide tenants with a security deposit receipt. It must identify the leased unit, the date and amount of the deposit received, and the signature of the landlord who received it. If you don’t send in this receipt, you will get sued.

It’s important to note that Cook County, the Collar Counties, and Chicago all have different landlord and tenant laws. Therefore, it’s crucial to research the applicable laws in your area to ensure compliance and avoid any legal complications.

Key Clauses to Include in a 2023 Chicago Lease Agreement

Having clear language and transparency is crucial to establishing a positive relationship between the lessor and lessee. This relationship is built on trust. A high-quality lease is the first step toward building that trust. To ensure that there are no issues with the lease, offer to explain it. This process allows tenants to ask questions and have any concerns addressed immediately.

When you create a lease agreement, you must give your tenant instructions on how to sign the document. They can sign it in ink, DocuSign it, VeriSign, e-sign it, or email you an agreement. They cannot simply text or call and say “I accept.” Ink signed is best. If you ask the tenant to eSign your lease agreement, tell them where to sign or provide their initials. Ensure that your tenant has read and understood each clause of the lease agreement. Make sure they initial and date each clause.

The Difference Between a Lease Agreement and a Rental Agreement in Chicago

Lease agreements and rental agreements may seem similar, but they’re used for different situations. A rental lease is proper for longer lease terms like year-to-year. Rental agreements are good for tenants who plan to rent the property on a month-to-month basis. These month-to-month tenancies need 60 days’ notice to terminate in Chicago, so just be aware of that when you choose. It’s not as simple as taking someone’s word for it.

When creating a lease agreement, landlords should adjust the lease term properly. At move out time, it will be important how long the tenant will stay on. There are different rules for an annual, month-to-month basis, or specific time basis. Landlords should also include all of the following clauses:

Rent Payment Clause in Chicago Leases

As a landlord in Chicago, it’s important to include a rent payment clause in your lease agreement. The rent payment clause establishes the rent payment terms, including the amount of rent, payment due date, payment methods, and any applicable late fees or penalties. Specify whether you do or do not accept certain payment methods, like Zelle. Also, specify the circumstances where you can refuse payments. The Chicago Residential Landlord and Tenant Ordinance (RLTO) requires that all rental agreements contain the amount of rent and the due date for payment. This clause also helps protect you in the event of a dispute or legal action related to rent payments.

Sample 2023 Lease Agreement Rent Amount and Rent Payment Time Clause

The total monthly rent for the term hereof is the sum of $_________ paid on the first of each month.  The first installment is $________ due on ________.  Rent is acceptable in good funds, including electronic payment per the terms and conditions. Each remaining installment shall be made to the Landlord noted above at the address set forth in the preamble or in the Section entitled “Giving of Notices.”

Late Payment Penalty

If the tenant fails to pay rent on time, the landlord may charge a late fee of $10.00 per month on rents under $500 plus 5 percent per month on that part of the rent that exceeds $500.00 (i.e., for a $450.00 monthly rent the late fee is $10.00, for a $700 monthly rent the late fee is $10 plus 5% of $200.00 or $20.00 total). You cannot ordinarily send a five-day notice for non-payment of rent for a non-payment of late fees.

Security Deposit Clauses for your 2023 Chicago Lease Agreement

As a landlord in Chicago, it’s crucial to have a clear and detailed security deposit clause in your lease agreement. The security deposit clause outlines the amount of the security deposit, the conditions for withholding or returning the deposit, and the timeframe for returning the deposit after the tenant has moved out. We did a whole security deposit article on what you need to know here.

Sample Security Deposit Clause

There is a security deposit of ___________ held on account for this unit.  The security deposit will be held at _____________________, a National Organization Bank having locations in the Chicagoland area.  You will be given a receipt including the name of the account holder of the security deposit, the date received, and a description including the address of the dwelling unit.  It will be signed.

If Tenant chooses to pay via electronic funds transfer, the Landlord as mentioned above may give Tenant an electronic receipt.  It will be the same in every way as the written contribution except it will have a digital signature and/or be by email.

Tenant may pay the security deposit in the same check or money transfer as the first month’s rent, and if Tenant does the Landlord will transfer that money into its account within 5 days with notice.  If the property is sold, Tenant will be notified of the transfer of the security deposit within 14 days per 5-12-080(e).  Your security deposit bears interest and will be paid on the rate noted by the City comptroller.

Maintenance and Repair Clause

As a landlord in Chicago, having a maintenance and repair clause in your lease agreement is crucial. This clause outlines the tenant’s responsibilities for keeping the rental property clean and in good condition, as well as the landlord’s obligations to maintain and repair the property. You should split these obligations by the location of the maintenance and repairs within the home, and by their scope of work.

By having a clear and detailed maintenance and repair clause, you can help ensure that both you and your tenant are on the same page regarding property maintenance and repairs. This clause can also help protect you from any potential legal disputes or financial loss related to damages or repairs caused by the tenant’s negligence or misuse.

Additionally, Chicago Lease Agreements require a maintenance and repair clause. The Chicago Residential Landlord and Tenant Ordinance (RLTO) mandates that landlords are responsible for maintaining the property in compliance with all building, health, and safety codes. The ordinance also requires tenants to keep the property clean and in good condition.

Tenant Responsibilities (Sample Clause)

The tenant, the tenant’s family, and invited guests must comply with all obligations imposed specifically upon tenants by the provision of the Chicago Municipal Code, applicable to dwelling units, including section 7-28-859: Buy and install working batteries in smoke and carbon monoxide detectors within tenant’s apartment. The tenant shall keep the unit safe and clean. Tenant shall use all equipment and facilities in a reasonable manner. All occupants shall not deliberately or negligently damage the unit. Tenants shall not disturb other residents.

Landlord responsibilities (Sample Clause)

If the landlord fails to maintain the property in compliance with the Code and the tenant or the tenant’s family or guests are not responsible for the failure, the tenant may:

Request in writing that the landlord make repairs within 14 days, and if the landlord fails to do so the tenant may withhold an amount of rent that reasonably reflects the reduced value of the unit. Rent withholding begins from the fifteenth day until repairs are made; OR request in writing that the landlord make repairs within 14 days and if the landlord fails to do so the tenant may have the repairs made and deduct up to $500 or 1/2 of the month’s rent, whichever is more, but not to exceed one month’s rent. Repairs must be done in compliance with the Code. Receipt for the repairs must be given to the landlord and no more than the cost of the repairs can be deducted from the rent; and also file suit against the landlord for damages and injunctive relief

If the landlord fails to maintain the property in compliance with the Code, and the failure renders the premises not reasonably fit and habitable, the tenant may request in writing that the landlord make repairs within 14 days. If after 14 days repairs are not made, the tenant may immediately terminate the lease. Tenant must deliver possession and move out in 30 days or tenant’s notice is considered withdrawn.

Termination and Renewal Clause

Notice Period and the Fair Notice Act

As a landlord in Chicago, you must be aware of the the Chicago Residential Landlord and Tenant Ordinance (RLTO) notice requirements. The ordinance mandates that landlords must give tenants a certain amount of notice to non-renew or terminate a lease, or to raise the rent.

Under the ordinance, landlords must provide at least 60 days of notice to terminate a lease or raise the rent for tenants who have lived in their apartment for more than six months but less than three years. For tenants who have lived in their apartments for more than three years, landlords must provide at least 120 days of notice to terminate the lease or raise the rent.

It’s important to note that these rules apply to all tenants, regardless of whether they have a written year-long lease or an informal month-to-month lease. The notice requirement does not apply if the eviction process has already begun due to nonpayment of rent or another violation of the lease.

Automatic Renewal Policy

In Chicago, leases do not automatically renew unless you execute a new lease. However, it’s important to note that the terms of the original lease may still apply, even if the lease has expired and the tenant continues to occupy the rental property.

You create a Month-to-Month Tenancy if your tenant continues to occupy the rental property after the lease has expired, and you accept rent payments from the tenant. The original lease agreement still governs your responsibilities, unless the landlord and tenant agree to new terms.

It’s important for landlords to provide tenants with notice of the lease expiration date and any requirements for renewing or terminating the lease. If the landlord wants to terminate the tenancy at the end of the lease term, they must give the required notice under the Chicago Residential Landlord and Tenant Ordinance (RLTO).

Additional Clauses to Consider in a Chicago Lease

As a landlord in Chicago, it’s important to consider every possible issue related to the lease agreement with your tenants. This means being proactive in identifying potential problems and addressing them before they become major issues.

To ensure that you’re thinking about every kind of lease issue, it’s a good idea to start by reviewing the Chicago Residential Landlord and Tenant Ordinance (RLTO) and other relevant laws and regulations. This will help you understand your legal obligations and any requirements for the lease agreement. Other important considerations when thinking about lease issues include providing clear and detailed information in the lease agreement. It’s also a good idea to communicate regularly with your tenants to address any questions or concerns they may have and to provide updates on any changes to the lease agreement.

Renter’s Insurance Clause (Sample)

Landlord, Landlord’s agent or manager, or, if applicable, the Condominium or Homeowners’ Association, are not responsible for insuring Tenant’s or Tenant’s permitted visitors’ personal property and vehicles against loss or damage due to theft, vandalism, fire, water, rain, criminal or negligent acts of others, or any other cause. Landlord has advised Tenant to carry Tenant’s own insurance (renter’s insurance) to protect Tenant from any such loss or damage. The parties agree that, upon notification by Landlord, Tenant shall take all actions necessary to avoid: (i) an increase in Landlord’s insurance premium (or Tenant shall pay for the increase in premium); or (ii) loss of insurance.

No Alterations Clause (Sample)

Tenant shall make no alterations to the buildings or improvements on the Premises or construct any building or make any other improvements on the Premises without the prior written consent of Landlord.  Any and all alterations, changes, and/or improvements built, constructed or placed on the Premises by Tenant shall, unless otherwise provided by written agreement between Landlord and Tenant, be and become the property of Landlord and remain on the Premises at the expiration or earlier termination of this Agreement.

Utility Payment Clause (Sample)

Tenant shall be responsible for arranging for and paying for all utility services required on the Premises.

Entry and Inspection Clause (Sample)

Tenant agrees Landlord shall have the right of access Landlord and Landlord’s agents shall have the right at all reasonable times during the term of this Agreement and any renewal thereof. This right is to enter the Premises for the purpose of inspecting the Premises and all buildings and improvements thereon.  Landlord may also inspect for the purposes of making any repairs, additions or alterations for the preservation of the Premises or the building.  This is to Landlord’s sole discretion.

Landlord and its agents shall further have the right to exhibit the Premises and to display the usual signs. These signs are known as “for sale”, “for rent” or “vacancy” signs. They may be displayed on the Premises at any time within forty-five (45) days before the expiration of this Lease.   The right of entry shall likewise exist for the purpose of removing placards, signs, fixtures, alterations, or additions that do not conform to this Agreement or to any restrictions, rules or regulations affecting the Premises.

Subletting Clause (Sample)

Landlord will accept a sublet that meets or exceeds the monthly value of the rents due and owing from any individual otherwise qualified with two of three credit bureaus reporting a credit score over 700+, no prior felony convictions or drug convictions, and a debt-to-income ratio not greater than 35%.  Landlord to abide by Mun Code 05-12-120.

Sample Terms and Conditions to Comply with the Chicago RLTO

Below please find, free of charge, sample terms and conditions for a Chicago lease that might benefit you to include. We do not create an attorney-client relationship by putting these on your mind. They’re just a suggestion.

1. Pets: If you have a pet or are considering getting one, please check with us first. We’ll need to know what type of pet you have and how it interacts with the property and other people on the property.
2. Locks and Keys: Please do not add locks or similar devices to the doors that prevent us from entering the property if needed. If you need additional keys, we can provide them for an additional cost.
3. Regulations and Hazardous Materials: Please do not install machinery, refrigeration or heating devices or store inflammable fluids or materials that are hazardous.
4. Common Areas: Please do not obstruct hallways, stairways, or elevators. Children may not play or congregate in common areas. Please do not store personal items in the hallways or common areas. This includes wet boots, snow removal items or toys.

Terms on Building Safety

1. Electrical Appliances: Please do not use electrical appliances or devices that interfere with radio or TV reception. You may not mine cryptocurrency in the unit.
2. Deliveries and Furniture Moving: Please make arrangements with us regarding the timing of deliveries and moving of furniture.
3. BBQ or Cooking Equipment: Please check with us before using any BBQ or cooking equipment on porches or balconies. No explosives or fuel. Propane tanks are prohibited.
4. Trash and Drains: Please do not dispose of trash, rags or other things that can clog toilets, sinks or drains by flushing them. Absolutely no flushing of “wet wipes” or feminine sanitary products.
5. Signs and Ads: Do not display signs or ads in windows, apartments, or building if visible from the street. You may not operate a business servicing customers from the unit.
6. Trash Disposal: Please dispose of trash in the designated receptacles on the designated day. There is no concierge service.
7. Heavy Furniture and Items: Please do not place waterbeds, pool tables, or other heavy items or furniture in the unit without our consent.

Terms and Conditions for Code Compliance and Occupancy

1. Building Code Compliance: Please do not interfere with heating or lighting or other fixtures or run cords or appliances in violation of the building code. Doing so is a violation of the lease resulting in eviction.
2. Guest and Invites Policy: Please note that the landlord can bar people from the building and/or renter’s premises, including guests and invitees. If violated, they may be barred and/or arrested for criminal trespass, and violations could result in termination of tenancy. You may have an overnight guest 2 nights a week but no more frequently than 5 nights in any 14 day period. No guests may stay more than 14 consecutive days.
3. Appliance Repair: We will repair malfunctioning appliances, but we are not responsible for the loss of the appliance. Renters must report malfunctions.
4. Cost of Keys: Any additional or replacement keys to the apartment, parking structures, or storage units will come at an additional cost.
5. Lockouts: If you are locked out, please contact us during business hours. If not possible, renters must contact a locksmith, and the cost is borne by the renter. You will always receive 48 hours notice if we deem that the property must be re-keyed.

Sample Clauses for Bigger Multifamily Units

1. Renters Insurance: We require renter’s insurance naming the Landlord as an additional insured. The landlord isn’t held responsible for the renter’s personal property or damages thereto.
2. Storage and Laundry: We do not offer storage and laundry services. If there are laundry facilities or appliances in the unit, the tenant agrees to clean lint filters and keep the area free of debris. The landlord is not liable for personal injury or property damage arising from or relating to the laundry facilities made available under the lease.
3. Rules and Regulations Acknowledgment: You, the renter, acknowledge that you read the rules and regulations and agree to be bound by them.

Consequences of a Poor Chicago Lease Agreement

Not having a well-drafted lease agreement as a landlord in Chicago can expose you to a number of risks and potential legal issues. Here are some specific dangers to consider:

Lack of Clarity

A poorly drafted lease agreement can result in a lack of clarity regarding the terms and conditions of the tenancy, which can lead to disputes between the landlord and tenant. You can avoid delays and legal expenses with a clear and comprehensive lease.

Non-Compliance with the Chicago RLTO

The City of Chicago has specific laws and regulations regarding landlord-tenant relationships, including the Chicago Residential Landlord and Tenant Ordinance (RLTO). A poorly drafted lease may not comply with the requirements of the RLTO, which can lead to costly legal consequences. Nearly all violations of the RLTO pay attorneys’ fees, so $100 violations can turn into $10,000 problems.

Loss of Recovery, Rights, or Rents

Without a well-drafted lease agreement, you may lose certain rights as a landlord, such as the ability to evict a tenant promptly for non-payment of rent, for failing to leave at the end of term or for other violations of the lease. A properly drafted lease agreement can provide clear guidance on the circumstances under which you can exercise your rights as a landlord.

Financial Loss

A poorly drafted lease agreement can result in financial loss, such as missed rent payments, property damage, or legal fees. A well-drafted lease agreement can help you mitigate these risks by setting clear expectations and consequences for the tenant.

Explanation of the legal implications of signing a lease

A Chicago lease agreement sets out the obligations and rights of both the landlord and tenant. For example, these include rent payments, security deposits, maintenance responsibilities, and termination clauses. Both parties must follow the terms of the lease agreement. But, with clear terms comes clear responsibilities. Therefore, if either the landlord or tenant breaches the terms of the lease agreement, the other party may have legal remedies available, such as filing a lawsuit for damages or seeking an eviction. So, It is important to understand the legal consequences of breaching the lease agreement. In Chicago, your residential lease can’t force tenants to pay attorneys fees for eviction, so keep that in mind.

Reviewing the lease with an attorney or real estate agent

It is generally a good idea to review your Chicago lease agreement with an attorney before signing it. So, a real estate attorney can review the lease agreement and ensure that it complies with all relevant laws and regulations, as well as help you understand your rights and obligations under the lease. An attorney can ensure that your lease agreement complies with the Chicago Residential Landlord Tenant Ordinance and protects your rights as a landlord or tenant. Further, We also help homeowners understand how to pursue evictions when something goes wrong.

Tips for negotiating lease terms

An attorney can help you negotiate the terms of the lease agreement, such as rent increases, security deposit amounts, and maintenance responsibilities, to ensure that they are fair and reasonable. Reviewing a lease agreement with an attorney can help you avoid costly legal proceedings. In the event of a dispute between you and the other party, an attorney can represent you in court and help you achieve the best possible outcome. Overall, reviewing your Chicago lease agreement with an attorney is a wise investment in your legal and financial security as a landlord or tenant.

Conclusion

These provisions are critical to the landlord-tenant relationship and can have significant financial and legal consequences for both parties. It is essential to carefully review and understand these provisions before signing a lease agreement. If you have any questions or concerns, it is advisable to seek legal advice from a qualified attorney who practices in Cook County and Chicago.