Update Your Docs! The New Chicago Lease Agreement Rules (HB 3564)
If you sign Chicago leases, your lease form is about to need a rewrite. Illinois House Bill 3564 — the Rental Fee Transparency and Limitations Act — has been signed into law, and its trailer bill (HB 5234, also signed) moves the effective date from July 1, 2026 to January 1, 2027. When it lands, it bans eleven categories of rental fees outright and makes any non-optional fee that isn't printed on the first page of your lease uncollectible. It lands on top of a new Safe Homes Act disclosure requirement and the stack of attachments the Chicago RLTO already demands.
Here's the short version: pull out the lease you're using right now, count the fees, count the attachments, and run them against the checklist below. If your lease is a form you downloaded in 2021, it was stale then and it's a liability now. I handle 150-plus evictions a year across Cook, DuPage, Kane, and Lake Counties, and when a landlord's case falls apart, the autopsy almost always starts with the lease.
(This article last updated June 2026.)
What HB 3564 Actually Does
The version signed into law amends the Landlord and Tenant Act, and four things matter for landlords:
- Eleven fee categories are banned outright. The enrolled bill prohibits fees for lease modifications or renewals; eviction notices or filings before a court order; after-hours maintenance requests; contacting the owner or manager about maintenance or lease questions; maintenance-related travel; "maintenance hotline" services; routine maintenance and upkeep; pest abatement where the tenant didn't cause the infestation; duplicate screening charges; and in-person walk-throughs at move-in or move-out.
- Application fees are capped at $50. You can pass through a third-party background check that costs more only if you pay it up front, the actual cost exceeds $50, and you bill the tenant with receipts within 14 days — miss the deadline and the fee is waived.
- Every non-optional fee goes on page one of the lease. The bill's words: all non-optional fees, one-time or recurring, "shall be explicitly contained on the first page of a lease agreement." A fee that isn't listed there is not collectible. Fees must also be disclosed in your listings.
- Real enforcement teeth. Courts may order injunctive relief, monetary relief, attorney's fees, and costs. Owner-occupied buildings of six units or fewer are exempt, and home-rule municipalities may regulate fees only at least as strictly — the statute is a floor, not a ceiling.
The practical test for every line item in your lease and your listing: Is it on the banned list? Is it printed on page one? Was it disclosed before the tenant applied? Strike what fails, or fold it into the rent. Rent is honest. Junk fees are now litigation bait.
The New Safe Homes Act Disclosure
Illinois has also added a Safe Homes Act disclosure requirement for residential leases, and it's stricter than most landlords expect. Under Public Act 103-1031 — effective January 1, 2026, so it's already in force — the Summary of Rights under the Safe Homes Act published by the Illinois Department of Human Rights must be attached as the first page or pages of every Illinois residential lease, and the tenant must initial or sign each page of the summary. No abbreviated version is permitted. Skip it and the penalty is the greater of the tenant's capped actual damages or $100, plus attorney fees.
Build it into the lease packet — first pages, every page initialed — not a loose handout. In court the question is never "did you give the disclosure" — it's "can you prove it," and a signed acknowledgment page answers that in four seconds.
The Attachment Stack Chicago Already Requires
The January 2027 changes get the headlines, but most Chicago landlords who walk into my office are already out of compliance with the existing requirements. A compliant Chicago lease packet includes all of the following:
- The RLTO summary. Section 5-12-170 of the Municipal Code requires the current City-issued summary of the ordinance attached to every written lease and every renewal. Miss it and the tenant is entitled to $100 and can terminate the lease — and it's the very first thing a tenant's attorney checks when hunting for fee-shifting claims.
- The security deposit interest rate summary. A separate required attachment stating the City's current deposit interest rate. The Comptroller sets it annually; the 2026 rate is 0.01%, unchanged since 2017.
- The bed bug brochure. Chicago's bed bug ordinance requires the Department of Health's informational brochure at initial occupancy and renewal.
- The heating cost disclosure. If your tenant pays for heat, Chapter 5-16 requires you to disclose the projected average monthly heating cost before the lease is signed.
- The lead-based paint disclosure. Federal law for any pre-1978 building: the disclosure form plus the EPA's "Protect Your Family From Lead in Your Home" pamphlet.
- The radon disclosure. Since January 1, 2024, Illinois requires a radon pamphlet and disclosure of any known radon hazard for most lower-level units.
I assemble these as one packet with one acknowledgment page listing every attachment. One signature, six problems solved.
Late Fees: The $10-Plus-5% Rule
Under RLTO 5-12-140(h), a Chicago late fee is capped at $10 per month on the first $500 of monthly rent, plus 5% of everything above $500. On $2,000 rent, that's $10 plus 5% of $1,500 — an $85 maximum. The flat "$150 late fee" I see in downloaded leases is illegal in Chicago, and charging it doesn't just cost you the fee. An unlawful fee provision hands the tenant a counterclaim in your own eviction case.
The same section prohibits clauses that waive RLTO rights, confess judgment, or shift the landlord's attorney fees onto the tenant beyond what the ordinance allows. Attempting to enforce a prohibited clause exposes you to damages of two months' rent.
Security Deposit or Move-In Fee?
RLTO 5-12-080 makes security deposits strict-liability territory: a compliant receipt, a segregated interest-bearing account at an Illinois bank identified in the lease, annual interest payments, itemization within 30 days, return within 45 days. Get any of it wrong and you owe the deposit back plus two times the deposit in damages plus the tenant's attorney's fees.
That's why most Chicago landlords I work with stopped taking deposits years ago and switched to non-refundable move-in fees. Three warnings if that's your plan. First, courts look at substance, not labels — if your "move-in fee" gets refunded when the unit is clean, it's a deposit and 5-12-080 applies. Second, the enrolled version of HB 3564 does not ban genuine move-in fees (the introduced version tried to, and Springfield will likely try again) — but it bans "walk-through" fees at move-in and move-out by name, so label yours carefully. Third, once the law is effective, the fee must appear on page one of the lease and in your listings or it is not collectible. Also worth knowing: since January 1, 2024, the state Security Deposit Return Act applies to every Illinois landlord regardless of size, so a deposit now carries statutory deadlines even for a single rented condo in the suburbs.
Suburban Cook? You Have Your Own Ordinance
If your property sits in suburban Cook County, the Cook County Residential Tenant and Landlord Ordinance (RTLO) has applied since June 1, 2021. Like the RLTO, it exempts owner-occupied buildings of six units or fewer, requires its own summary attachment, and regulates deposits and fees — but the numbers differ. The RTLO late fee cap is $10 per month on the first $1,000 of rent plus 5% of the amount above $1,000, and the deposit return deadline is 30 days. Evanston, Oak Park, and Mount Prospect follow their own municipal ordinances instead.
DuPage, Kane, and Lake County landlords: you're governed by state law only, which is one of several reasons my DuPage eviction flat fee is $895 while Chicago runs $1,600. Compliance complexity is priced in.
The Clause-by-Clause Checklist
| Lease section | What to verify before the new law takes effect (January 1, 2027 under the trailer bill) |
|---|---|
| Rent and fees | Every mandatory charge disclosed in the listing and application; no fee without a service behind it |
| Late fee | $10 + 5% formula (Chicago) or $10/$1,000 + 5% (suburban Cook); no flat fees |
| Deposit / move-in fee | Full 5-12-080 compliance, or a true non-refundable fee disclosed up front |
| Attachments | RLTO summary, interest rate summary, bed bug brochure, heating disclosure, lead paint, radon, Safe Homes Act summary (first pages of the lease, each page initialed) |
| Access | Two days' notice for entry, reasonable times — don't promise less |
| Subleasing | RLTO requires you to accept reasonable subleases without charging a sublet fee |
| Non-renewal / termination | Fair Notice timelines: 30 days under 6 months of tenancy, 60 days for 6 months to 3 years, 120 days over 3 years |
| Prohibited clauses | No RLTO waivers, no confession of judgment, no one-way fee shifting |
When to Use an Attorney-Drafted Lease
If you own one building in Naperville, a current-year state form might serve you fine. If you own anything in Chicago or suburban Cook County, the math is lopsided: an attorney-drafted lease costs a few hundred dollars once, and a single 5-12-080 violation on an $1,800 deposit costs the deposit, $3,600 in damages, and a tenant's attorney's fee petition that routinely exceeds both. I've seen a $40 mistake in unpaid deposit interest turn into a five-figure judgment. I defend those cases — that's my RLTO defense practice — and I'd rather draft you out of them for a fraction of the price.
And remember why this matters: when a tenant stops paying, the lease is Exhibit A in your eviction. A defective lease turns a routine $1,600 eviction into a contested case with counterclaims. Start with our free eviction resources if you want to see what the paperwork should look like.
Frequently Asked Questions
When does HB 3564 take effect, and does it apply to existing leases?
January 1, 2027. Both bills have been signed — HB 3564 as written would have taken effect July 1, 2026, and its trailer bill moves the date to January 1, 2027. My understanding is that existing leases ride out their terms, but any renewal or new lease signed on or after the effective date must comply — and remember, the bill bans lease renewal fees outright. Practically, update your form now so nothing stale gets signed.
Can I still charge a move-in fee in Chicago under the new law?
Yes — the enrolled bill does not prohibit a genuine, disclosed move-in fee, though it bans walk-through fees by name and the introduced version of the bill tried to ban move-in fees entirely, so don't bet the business model on them long-term. The fee must be genuinely non-refundable, printed on page one of the lease, and disclosed in your listing. What you can't do is advertise $1,500 rent and surprise the tenant with $400 in mandatory add-ons at signing.
What happens if I just keep using my old lease?
Nothing — until your first non-paying tenant hires a lawyer. Then the missing RLTO summary, the flat late fee, and the undisclosed charges become counterclaims with fee-shifting attached. Old leases don't fail quietly; they fail mid-eviction, when you can least afford the delay.
Do these rules apply to my single condo unit I rent out?
In Chicago, yes. The owner-occupied exemption requires you to live in the building and the building to have six or fewer units. A rented-out condo you don't live in is RLTO-covered, full stop.
If you'd rather have this handled than researched: I draft RLTO-compliant leases, I defend landlords when leases go wrong, and the consultation is free. Call me at (630) 839-9195 or book a free 30-minute phone consultation — bring your current lease and I'll tell you what's broken before the call is over. You can also reach the office through my contact page.