Illinois Landlords: New Rental Fee Transparency Law Takes Effect January 1, 2027

Governor J.B. Pritzker has signed House Bill 3564 into law, creating significant new requirements for Illinois landlords and residential rental property managers. Often referred to as Illinois’ “junk fee” law, the legislation is intended to increase transparency in residential leasing by requiring upfront disclosure of mandatory charges and restricting or prohibiting certain fees commonly imposed during the rental process.

Effective January 1, 2027, the law:

• Changes how certain rental fees may be charged;
• Limits or prohibits several common fees;
• Requires additional lease disclosures, and;
• Creates new enforcement rights for tenants.

This new law represents one of the most significant recent changes affecting Illinois residential leasing practices. Illinois landlords should begin reviewing their leases, applications, advertising, and fee structures now to ensure they are prepared before new residential lease agreements are signed in 2027.

Non-Optional Fees Must Appear on the First Page of the Lease

Beginning January 1, 2027, all mandatory fees, whether charged one time or on a recurring basis, must be clearly disclosed on the first page of the residential lease agreement. The law also provides that a tenant is not responsible for paying any mandatory fee that is not disclosed on the first page of the lease.

For many landlords, this may require working with their attorney to review and revise exiting lease templates, moving fee disclosures that currently appear elsewhere in the lease or in addenda.

Utility Responsibilities Must Be Disclosed

The law also requires landlords to disclose whether utilities are included in the rent. This disclosure must appear in the lease agreement or rental listing so prospective tenants understand what utility costs they will be responsible for before entering into the lease.

New Restrictions on Rental Fees

HB 3564 prohibits or limits numerous fees commonly associated with residential leasing, including:

• Limiting rental application and background check fees to $50, unless certain statutory exceptions apply for higher third-party screening costs.
• Prohibiting fees for lease renewals or lease modifications.
• Prohibiting charging tenants for after-hours maintenance requests.
• Prohibiting charging tenants for pest abatement when the tenant did not contribute to the infestation.
• Prohibiting various other fees identified in the statute.
• Prohibiting landlords from simply renaming a prohibited fee in an attempt to avoid the law.

New Civil Liability

The law creates a private right of action, allowing individuals to bring a civil lawsuit alleging violations of the rental fee transparency and prohibited fee provisions. As a result, compliance is no longer simply a matter of best practice as it may directly affect a landlord’s litigation exposure.

Does the Law Apply to Every Rental Property?

Not entirely. The legislation generally applies to new residential lease agreements entered into on or after January 1, 2027. The law does not apply to lease agreements for dwelling units located in owner-occupied properties containing six units or fewer.

What Should Illinois Landlords Do Now?

Waiting until the end of 2026 could leave landlords scrambling to update lease documents and leasing procedures. Since the new legislation contains detailed exceptions and conditions, Illinois landlords and rental property managers should work with their legal counsel to:

• Review residential lease forms.
• Evaluate all mandatory fees and determine whether they remain permissible.
• Update rental applications and screening procedures.
• Review online listings and marketing materials to ensure they are legally compliant.
• Train leasing staff and property managers on the new disclosure requirements.

Legal Resource

Preparing now can help Illinois landlords avoid compliance issues, reduce potential disputes, and ensure lease documents are updated before January 1, 2027.

KSN’s landlord attorneys assist Illinois landlords and rental property managers with lease preparation, policy reviews, compliance counseling, and eviction matters. If you have questions about how this new law affects your residential rental properties, contact KSN to discuss your leasing documents and rental practices before the new requirements take effect.

Questions about these new Illinois laws, evictions, tenant disputes, 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, collections, landlord/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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