A new section (765 ILCS 705/4) has been added to the Illinois Landlord and Tenant Act titled “Ban on Electronic Funds Transfers as Exclusive Method of Payment.” This prohibits Illinois landlords from requiring tenants to use electronic funds transfers (EFT) or similar electronic methods as the exclusive means of paying rent and other lease-related payments.

Below is a summary of the new section and its impact on Illinois landlords and rental property managers.

  • A landlord cannot require a tenant or prospective tenant to make any payment due under a lease, renewal, or extension agreement by electronic means, including electronic funds transfer or an electronic funds transfer system that automatically transfers funds on a regular, periodic, and recurring basis.
  • Therefore, a landlord can encourage tenants to make payments by electronic means, but cannot require an electronic payment as the only method of payment.
  • We do not recommend that landlords incentivize electronic payments with monetary bonuses or penalties.
  • Any transaction that is originated by check, draft, or similar paper instrument, however, does not fall under the umbrella of an “electronic payment.”  Therefore, landlords only need to offer an option that allows a tenant to submit a paper form of payment – even if that option is mailing a check to an offsite processor.
  • Be aware of the related Illinois statute that requires any rental building with 100 or more units and an onsite business office to accept payments onsite.

Non-compliance with this statute constitutes a violation of the Consumer Fraud and Deceptive Business Practices Act, which contains steep penalties and strict liability. There is no opportunity to cure the violation.

This statute applies to leases, renewals, or extension agreements executed after January 1, 2024 (as opposed to leases with lease terms that begin on or after January 1).

In addition, the statute allows for a grace period for compliance by March 31, 2024.


Legal Resource

Questions about these legislative changes, evictions, security deposits, leases, tenant screening, and other landlord legal issues? Our experienced landlord/tenant attorneys are here to help.

Call KSN toll-free at 855-537-0500 or visit www.ksnlaw.com.

Since 1983, KSN has been a legal resource for condominium, homeowner, and townhome associations. Additionally, we represent clients in real estate transactions, collectionslandlord/tenant issues, and property tax appeals. We represent thousands of clients and community associations throughout the US with offices in several states including Florida, Illinois, Indiana, and Wisconsin.


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