“Landlord Frequently Asked Questions Part 1” – KSN landlord/tenant attorney Jessica Ryan discusses frequently asked questions by Chicagoland landlords and rental property managers. Topics include emotional support animals, move-in fees, security deposits, updated Illinois regulations regarding electric vehicle charging, lease violations, and more. (46 mins.)
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Episode Transcription
Speaker 1: You are listening to the KSN podcast and on this episode, we’re discussing frequently asked questions by Chicagoland landlords Welcome to the KSN Podcast, where you’ll hear from KSN attorneys as they share their experience and insight on legal issues surrounding community associations, collections, property tax appeals, and landlord tenant law. This episode is a replay of our August 23rd, 2023, webinar where KSN Attorney Jessica Ryan discussed frequently asked questions by Chicagoland landlords. She covered emotional support animals, move-in fees, security deposits, updated regulations regarding electric vehicle charging, lease violations, and other frequently asked questions that impact Illinois landlords and rental property managers. KSN has provided landlords with affordable comprehensive legal services since 1983. We handle residential and commercial evictions, building code violations, we review leases, disclosures, contracts. We can handle third party disputes with tenants. We can address rental property legal concerns including fair housing, section eight housing questions, landlord and tenants’ ordinances. And we also provide property tax appeals for rental property owners. If you are a landlord or rental property manager experiencing any tenant issues or legal concerns, please call our office at (855) 537-0500. You can also visit our website, ksnlaw.com, and complete the contact form to send us a message.
Jessica Ryan: Hi everyone, thanks for coming. We are going to be talking about some frequently asked questions that we get from our landlord and rental property managers. This is actually going to be part one of two because we get a lot of frequently asked questions. We’re going to be hitting some today and some at our next webinar. I’ll give you some more details on that in just a moment. My name’s Jessica Ryan. I am the head of our landlord tenant department here at KSN. I have been with KSN coming up on 22 years and representing landlords and rental properties for a majority of that time. I really enjoy the industry; I enjoy my clients. We help out landlords’ rental properties with a whole wide array of services under our land program. Everything from our eviction department to reviewing leases and property tax appeals, building code violations, discrimination defense, kind of almost everything you can think of. We are a one stop shop for our landlords.
I also work with the Chicagoland Apartment Association. I’m on the board of directors and the legislative committee there. I really try to stay ahead of the curve on what’s coming down the pipeline to keep our clients informed and this is exactly how we go about doing that. Today, we are actually going to talk about some new legislation that’s going to go into effect in 2024, which answers some questions that I get quite often. Like I said, we are going to be having a second FAQ part. We have a lot of questions on issues that kind of arise on a day-to-day basis. New laws are coming into effect as well as eviction and notice procedures. So today I’m going to hit on the first two and then on September 20th we have another webinar, which will be part two of our FAQ presentation and that will address a lot more of the eviction and notice procedures and issues related to our evictions and notice procedures.
So, let’s get into it. The first question that I get quite often is, can I require that all tenants make rent payments electronically? The question usually arises if my client has a portal for their tenants where rent payments can be made, and they would like all rent payments to only be made on the rent portal. Another option sometimes is filling out an ACH automatic draft form where the rent will be automatically deducted first, fifth, whatever it is of the month. And I have clients who say, I want this to be the requirement that they can’t pay by check, they can’t pay by cash, they have to only pay electronically. Well, we have a new answer. I mean it’s not a new answer, it is the same answer, but now it is very black and white because there is a new Illinois statute that will become effective on January 1st, 2024. That new statute says that landlords cannot require a tenant to make any payment due under the lease electronically.
So, you can recommend it, you can urge that clients or that tenants make their payments electronically or set up ACH. This does not mean you are not allowed to take electronic payments. Of course, you still are, and you can urge tenants to do so, but you cannot require that a tenant set up their rent payments by some electronic means. If you do violate this statute on or after January 1st, 2024, a violation actually constitutes a violation of the Consumer Fraud and Deceptive Practices Act, which has some very steep penalties. So, you have to be careful here. This is not a Chicago RLTO, or you know– this is statewide, and it does link the consumer fraud and Deceptive Practices act to it for violations. So, it is really, really important that everyone is aware of this and does not require electronic payments as of January 1st, 2024.
So another question that I get that is coming up more and more frequently as people are converting to electric vehicles is the question: a tenant wants to install an electric vehicle charging system in our parking garage, do I have to allow it? This also is a new state law that will be effective January 1st, 2024. It says that a tenant may install an electric vehicle charging system at their own expense. So, you cannot deny a tenant the right to install an electric vehicle charging station or system in your parking lot or parking garage. But there are certain conditions, restrictions, requirements that the tenant must meet. So, you do get some protections that we’re going to talk about in just a second under this statute. But overall, you cannot just have a bright line rule that no tenant is ever allowed to install the electric vehicle charging system.
Also, you cannot charge an extra fee for installation or placement or use of the electric vehicle charging system except for these types of fees that I have listed here. If the tenant is using additional electricity, so let’s say your parking garage common area, you are paying the electric bill and the electric bill goes up by $14 a month after the electric vehicle charging system is installed, that additional increase in your electric bill can be charged back to the tenant. Another fee that you can charge is for reasonable access. The statute does not really define in specifics what reasonable access would be. If they have to get somewhere, use an area that is not normally used or that other tenants pay for, an amenity space or something like that, you would be able to charge them for reasonable access. You can also charge a security deposit for installation of this charging station that you can use, hold and use if any damage is done to the property.
Obviously because it is a security deposit, you would have to return it less any lawful deductions at the end of the person’s tenancy. There also would be a question in the Chicago RLTO, keep in mind, that any common areas are included in the definition of the apartment. So, the Chicago RLTO has this very, very broad interpretation of what an apartment is, and their security deposit requirements apply to a security deposit taken for the apartment. Now, I would argue the security deposit would not fall because it’s not for a residential unit, but definitely if you’re going to take a security deposit for the electric vehicle charging station, it is something we would want to talk about and I would want to look a little bit more closely at the RLTO and your lease to ensure that you would not be responsible for all of the RLTO security deposit requirements. So little aside, I diverge just a little bit there on the security deposits, but in Chicago we all know security deposits are a very touchy subject.
You can also charge a fee if there is increased insurance; if your insurance premium goes up because this electric vehicle charging system is now in your parking garage and your insurance company is bumping up your insurance premium, you can charge that back to the tenant who installed the system as well. And then last, obviously if the tenant requests it and you choose to install it so that you have control over the installation, you can charge the cost of installation back to the tenant. Other than these fees, you are not supposed to charge the tenant any fee, you know, a convenience fee or administrative fee, anything like that for placing or using the electric vehicle charging system. Now to protect you a little bit, the statute has some requirements in place that the tenant has to comply with.
Obviously, I think this is a no-brainer. They have to comply with building codes and safety standards in the installation. They have to use a licensed and registered contractor of electric vehicle charging stations. So, this is a contractor who actually has experience and is licensed for these systems specifically. Within 14 days after your approval of the installation plan, so after the landlord’s approval of the installation plan, the tenant has to submit to you a certificate of insurance naming you the landlord as an additional insured. So that’s helpful to get you their insurance if anything that you have is damaged and gives you the rights for claims and everything like that. They have to register the system with the landlord within 30 days after installation. So, they’re going to have to provide you with information about the system within 30 days after the date of installation. They have to adhere to your aesthetic requirements. So, if you want some type of cover or barrier or something around it, they’re going to have to comply with that as long as those requirements are reasonable. And then obviously reimburse the landlord for the cost of installation. I have had that on there twice. Do not forget if you are installing it, which you have the right to do if the tenant requests it so that you keep control, you can bill that back to the tenant.
The tenant has responsibility for all repairs and maintenance of the system while it’s installed on the property. However, that electric vehicle charging system is the property of the tenant. So, at the end of the tenancy, the tenant can take it with them. The statute even gives an option for selling it to the landlord if the landlord wants to keep it at the property but in a lease, oftentimes any fixture that’s installed by a tenant becomes part of the unit and the property of the landlord. This statute specifically says that the charging system will remain the property of the tenant. The tenant would also be responsible for any damage to the landlord or a third party’s property. So that’s a reason you may want to consider a security deposit so that when they take it, if they leave any damage to the property and don’t return the property to its pre-existing condition, you would have money in hand to fix that problem versus chasing the tenant who has left and moved on.
That covers a lot of the new statute on the electric vehicle charging systems. This is a very, very detailed statute that they put out. I will cover most of the basics of it. Again, this is effective January 1st, 2024. I usually do a legal update– I usually do it the first month of the year. So, in January we would be going through this in a lot more detail. So keep an eye out for our 2024 webinar schedule but if you have any questions this fall on the new law for electric vehicle charging systems that might be specific to your property or your tenants or how your parking garage or parking lot is set up, I’d be happy to talk through those things with you this fall leading up to the January 1st effective date.
Another question, this is a big one always. It’ll never go away. The emotional support animals, especially as we have more and more tenants getting creative so that they can keep their alligator emotional support animal, that has always been my favorite. I’m not sure how cuddly the alligator was to provide support for that tenant’s anxiety, but it was one of the best letters I had read from a doctor who swore up and down that the alligator would be providing great relief to the tenant’s anxiety. So as tenants get more and more creative with their emotional support animals it is really, really important for landlords and rental property managers to get more and more educated on how to deal with them. So, FAQ, the question I always get, do I have to accept an emotional support animal if my community prohibits pets? The answer is yes, as long as the tenant is complying with the requirements in their request for that emotional support animal. We’ve always had fair housing, which requires reasonable accommodation for an emotional support animal, but the Illinois Assistive Animal Integrity Act was adopted, and it actually added a little bit more protection for landlords. So, we were really, really happy when the statute was adopted.
So, now if a tenant is requesting an emotional support animal, you as the landlord or rental property manager must provide the emotional support animal as a reasonable accommodation for any disabled individual when the tenant provides documentation. That documentation has to state that the individual has a disability, that the individual has a disability related need for that animal and third, this is what that new Illinois statute added, the letter has to be written by a medical provider who has a therapeutic relationship with the individual. That last requirement combats the online certificates. I’m sure if you guys have been in this business for any length of time, you have seen the little certificate that says this certifies that fluffy is an emotional support animal and there’s some silly signature by the owner of a toy company or something. I mean it means nothing. Literally someone can just go to the website, punch in their dog’s name and print out a certificate. That does not meet the requirements at all. It also combats these websites that therapists, and I put that in quotes because I am using that term loosely set up where they charge a couple hundred bucks for someone to submit their information online and that therapist kicks out a letter that says the individual has a disability and they have a disability related need for the animal.
Usually it says, I have evaluated this person and they have a disability and have a disability related need for the animal. That is not an established therapeutic relationship. In Illinois under that assistive animal integrity act, the therapeutic relationship actually has to be therapy over a period of time. Definitely if you have any questions when you get a letter, a medical letter from a tenant about an emotional support animal, if it does not say, I have been seeing this person regularly over the last six months, I have evaluated them in sessions over the last three months, something like that where it’s very clear there’s a therapeutic relationship and if you are ever uncertain, please forward it to our office. Well, I can say I’m pretty familiar, but if I even have any questions, we have a team of fair housing and discrimination attorneys who double check me. One of them has been here, gosh, I think 25 years and she’s kind of seen it all. So, we really can give you a good idea not only based on the language but based on what we’ve known from defending discrimination complaints for the last 30 years, how the hearing officers in those discrimination complaints view emotional support animals. So, we can really give you an idea of whether the letter fits the requirements or not.
I’m going to digress really quickly because one of my favorite letters that we got other than the alligator one cause that was great, but that was about the animal was from a radiologist in Hawaii and the tenant’s entire rental history was in Chicago, but he had a radiologist in Hawaii certifying that he had a disability and a disability related need for the animal and it turned out when we dug a little deeper, it appeared that the radiologist’s last name was also the maiden name of the tenant and may have been a brother or relative of some sort. You never ever want to accept documentation that doesn’t fit these requirements because if you prohibit pets, you have a duty to other residents not to accept pets unless they really fit into the requirements for an emotional support animal. Once you have an emotional support animal, you have to think of it not as a pet that is prohibited on your property, but as a reasonable accommodation for that disabled individual. So, if you get complaints and questions, you can always say the law requires us to accept that animal and leave it at that. You don’t want to tell them that the tenant has a disability or anything like that, but you are protected by the law from any other tenants who are angry that there’s now a dog on the property. You are protected in allowing this animal as a reasonable accommodation as long as you follow and stuck by these requirements.
Let’s talk about a couple of other little issues that surround emotional support animals. We sometimes get requests for multiple emotional support animals. So, I need fluffy, pooky and oh my gosh, I got to thinking, well, I’ll just go with Zoe because that’s my dog’s name, because they all help my anxiety. That is not going to be acceptable. If a tenant wants multiple emotional support animals, each animal has to address a different symptom of the tenant’s disability. Now we have definitely gotten letters that fit the requirements where it’s actually a therapist who states they’ve been seeing the tenant for a long time, there’s a therapeutic relationship and the letter specifies that fluffy helps her anxiety and pooky actually helps her social anxiety when she goes outside. And so, the letter will actually lay out the different symptoms that each animal assists with and if that’s the case and this therapist who has a therapeutic relationship has actually outlined different disability related needs for each animal, you would have to accept the separate several emotional support animals.
If the tenant is trying to tell you that they need three dogs for the same symptom, that is not acceptable, and you can just tell them they’re only allowed one animal for their one symptom unless they provide different documentation. You are not allowed to charge any additional rent, deposits or fees for this animal. This is not a pet. You cannot charge pet rent; you cannot charge pet deposits or additional fees. This is not a pet; this is reasonable accommodation for a disability. So, you have to think about the animal in a very different light. So be very, very careful that you do not charge pet rent or pet deposits for emotional support animals.
Last reasonable rules are enforceable against emotional support animals. So, you can have rules that the emotional support animal has to be leashed, it has to urinate or defecate in the restricted areas or off property if you prohibit pets. I will say sometimes in those cases where you’re requiring the tenant to take the dog off property, if that is very difficult because of the tenant’s disability, we get into a second reasonable accommodation in having possibly some little area in the side of the yard or something to be used for that animal but that’s a whole nother story. But these reasonable rules to protect the other residents and protect your property are absolutely enforceable. The rule of thumb is that the rules that you adopt cannot place an unreasonable burden or financial impact on the resident. So, you cannot require the resident to install extra fencing around your property or anything that’s going to cost them a lot of money or the unreasonable burden part might be a physically disabled tenant who cannot take the dog off property to urinate and defecate. They need some spot closer or one little corner of the courtyard or whatever it might be. So those are the types of things you have to think about. But definitely regular reasonable rules can be enforced even against emotional support animals.
Question four, can I bar an unwanted guest from our property? I get this question all the time and sometimes even the clients don’t know to ask this question. They just say, this guest keeps showing up and he’s harassing our staff or he’s screaming at other residents, and we don’t know what to do. Well, under the Illinois Eviction Act, you have the right to serve what’s called a Barred Person Notice. If you serve the Barred Person Notice directly to the individual that you want to bar and keep in mind this is for a guest. This is not for a tenant or an authorized occupant who has the right to live and be at the property. If you want to get rid of a tenant or an authorized occupant, you have to go through the eviction process. So, I just want to make that very clear. This is for a guest who does not have the right of possession of any residential unit at your property, but you would serve a Barred Person Notice by handing it to that guest and if the guest will not leave or comes back at any time, you can call the police and the Illinois Eviction Act states that that person should be arrested for criminal trespassing. So that was all well and good and then the Illinois Safety Act was adopted.
That act initially said that officers were prohibited from making arrests for trespassing, which directly conflicted with the Illinois Eviction Act. That said, after this Barr Person Notice, the officers had to arrest for criminal trespassing. So luckily there was an amendment to the Safety Act that does allow officers to issue a citation and arrest for trespassing when the officer reasonably believes that there is a threat to the community or an arrest is necessary because the person continues to engage in the offensive conduct or the person has an obvious medical or mental health issue that poses a risk to his or her own safety. So these are just really important little factors to remember because I think officers are hesitant to arrest for trespassing because they learned all the details of the safety Act when it first came out and we want to make sure that they’re aware of this amendment and not that it is any of your responsibility to educate a police officer, but I always say it’s kind of nice to have the knowledge in your back pocket to gently remind an officer that they can make an arrest if there’s a threat to the community, the person’s continuing to engage in this offensive conduct, or they obviously have a mental health issue and might be a risk to themselves.
Just remember that you still have the right to bar guests even though the safety Act is in effect, you just have to serve a Barred Person Notice on the guests. I will say from what I hear from clients all the time, that even though there was this amendment, officers are often very, very hesitant to make arrests for trespassing. Whether or not there’s any statute in effect at all, officers just don’t like to do it. They may just escort that person off of the property. If that happens and the person keeps coming onto the property, my recommendation is to call the police every single time because either that guest is going to get sick of being escorted off the property, they know what’s going to happen every time they show up, or the police are going to get sick of getting called and eventually actually make that arrest because they know they’re just going to be back out in two hours or the next day and the next day. Do not give up. Be tough and keep pushing it to assert your rights to protect your property and the people that are there from these difficult and sometimes violent or obnoxious guests.
Keep in mind as well that once you serve a Barred Person Notice on the unwanted guest, I always recommend that you send a copy or give a copy to the tenant whose guest it is. So, if you know specifically who that guest belongs to, you should give the tenant a copy of that Barred Person Notice. If you have a good lease– and let me remind everybody, we always do lease reviews, so if you have any questions, whether your lease contains the provision I’m about to say, let us know because it is an important provision. Your lease should say that if a tenant lets a barred person or a prohibited guest onto the property, that constitutes a breach of lease. It also helps you to have the tenant trying to enforce, hopefully, because they don’t want to get evicted. And so, hopefully maybe the tenant will also say, hey, you can’t come back here, I’m going to get evicted if you keep coming back. That’s what we hope happens. Sometimes the tenant is just as mad as the guest and will cause issues as well. We all know, but it does give you additional leverage. So, if the tenant breaches the lease for allowing a barred person back onto the property, you can serve that tenant with a 10-day notice. So, there are unwanted guests and barred person.
Question five, I have gotten a lot at the end of last year and this year because we have a new law and the question is, do I have to accept Section eight tenants? So as of January 1st, 2023, there was an amendment adopted to the Illinois Human Rights Act that adds source of income as a protected class, meaning landlords cannot discriminate based on source of income, which would include rental subsidies like vouchers, section eight, any other type of subsidy that the tenant is getting. All landlords now in Illinois, this has been in Cook County for a long time, Naperville has had a source of income, but it is now statewide. So, all landlords in Illinois must allow section eight tenants, voucher holders to apply for tenancy. Always, always, always, so you don’t get yourself in trouble with a discrimination complaint, tell that tenant or tell that applicant of course you can fill out an application. Sometimes they’ll say, do you think I’m going to qualify? If I still have to pay X amount and my voucher’s only this amount, I’m going to have to pay this amount and my income such and such, do you think I should apply? And they’re asking you this in your leasing office, you say, yes, yes, you should always apply, always apply. You never know, please apply.
You never ever want to turn away a section eight or voucher holder tenant without giving them the opportunity to apply. Even if the numbers they’re giving you, you can tell in your head they probably would not qualify. You never know until you see their application and if you are turning away voucher holders left and right because you don’t think they’re going to qualify, you’re going to end up with a class action on your hands. I have done some source of income seminars and webinars over the course of this year because it is new. We’ve gone into a lot of detail. Next year in our 2024 series, I will hit it again and go into detail because I’ve done so many seminars and webinars, I didn’t want to spend half an hour on it in this FAQ, but if you have more questions, please let me know. Just reach out, I’ll put up my contact information again at the end.
Another question I get a lot, can I take a move in fee instead of a security deposit? This is obviously a big one always in Chicago. Now the Cook County RTLO became effective in 2021 and there are a few security deposit restrictions in the RTLO for Cook County. So, I’m getting this question more and more in Suburban Cook County as well. And the answer is yes. If the move-in fee meets certain requirements, you can take a move-in fee instead of a security deposit. In 2014 there was actually an Illinois appellate court case, Steens versus Mack property, that kind of went into specifics. It was actually some nice guidance, and it outlined some criteria that would define a reasonable and lawful move-in fee and help ensure that that move-in fee could not be construed as a security deposit so as to trigger all of those security deposit requirements.
So, let’s talk about some of those quickly here. These are some of the differences that that court case set forth as to what the differences between a security deposit that would be subject to all the security deposit requirements versus a move-in fee which would not. So, the purpose of a move-in fee should be a charge paid to move into the unit, which covers expense, time, interruption of business. The appellate court didn’t actually indicate that a landlord needs to show the specific actions or procedures to justify that fee. Two caveats to that; one, we’re going to talk about Cook County RTLO, which did address this and two, although you don’t need to actually lay it out in your lease other than Cook County, which we’re going to talk about, if you do get sued on your move-in fee and you can’t show where the amount of that fee reasonably arose from, you’re going to get in trouble.
So just have an idea of, you know, I’ve got this employee doing this, we had to have maintenance put up the pads and all of these little fees, this adds up to about 250 bucks, this adds up to about 300 bucks. I feel confident if we get sued, I can at least show these are the fees that we had to incur that on average are around, you know, 300 bucks and that’s why we’re charging this move-in fee. The appellate court and the amount of your move-in fee; the appellate court said that about half the monthly rent or less would be acceptable because generally a security deposit is at least one month’s rent, which is taken as security for nonpayment of that rent and to secure the tenant’s full performance of the lease. So, if you are only taking a small amount, it’s not going to be used to secure payment of rent because it’s just not enough to secure payment of rent. So, you can argue this is a move-in fee because we can’t even use it to secure rent Judge, it’s not even a full month’s rent. I would be careful if, you know, this is a penthouse and rent is $10,000, I don’t recommend that your move-in fee be $5,000 as half of the monthly rent. Usually, I recommend 500 or less for a reasonable move in fee. Above that, I think it’s very hard for any landlord or rental property manager to outline costs and expenses that they would’ve actually incurred over the amount of $500 directly related to that move-in.
It must be non-refundable. So, a move-in fee must be non-refundable. In the case that went before the appellate court, the notice described in writing that the move-in fee was non-refundable. So having written notice that it’s non-refundable is very important. I recommend that it be in the lease, on the face of the lease in nice big capital letters “NON-REFUNDABLE MOVE-IN FEE”. Timing of the payment as well. Security deposits are often paid with first month’s rent. A move-in fee might be paid at the time of move-in, at the time of lease signing. It looks like maybe there’s some other timing of it that coincides more with the move-in versus the tenancy itself. And then last but not lease, there is no requirement outside of Cook County that the lease refer to the move-in fee. However, like I said, I do recommend it since the non-refundable term should be in writing, it should be in your lease. So, you want to put that in, and you definitely do not want any language that says that that move-in fee was paid to secure performance of the lease. That’s going to get you in trouble and have it construed as a security deposit.
So, let’s talk about the Cook County RTLO really, really quickly. So, this is for most suburbs in Cook County, the move-in fee is defined as a fee that is reasonably related to the landlord’s cost for a tenant moving into the dwelling unit including but not limited to additional security costs or additional trash removal. Like I said, putting the pads up, having an extra security personnel or maintenance on staff for that day and the RTLO requires that the landlord disclose an itemized list of a reasonable estimate of costs for charging a move-in fee which cannot include routine maintenance or upkeep costs. So, this is not the fees and the costs you’re incurring for turning the unit to prepare it for a new tenant. These must be directly related to the move-in. So, if you are in the Cook County suburbs, Cook County RTLO applies to you with certain exceptions for just a few municipalities. But otherwise, generally Cook County suburbs, this applies to you, and you have to disclose the list of costs that make up your move-in fee. So, keep that in mind.
Q seven, can I charge fines for lease violations? So, I get this a lot. You must have authority in your lease to levy fines in most cases. Very, very rarely there might be an ordinance or a statute that allows you to charge a tenant a specific amount or charge a tenant for certain obligations but that is very, very rare. So, you are going to need some authority in your lease that allows you to levy fines and either that comes in the form of the lease outlining specific fines. You might have an addendum to your lease that lists violation fines, and it says smoking is this or first offense for any violation, second offense, third offense ongoing, here are the different amounts. So you might actually like a specific violation fine schedule in your lease or your lease might say that the landlord has the right to adopt reasonable rules for the building or the community and if the lease gives you the right to adopt rules, then you can adopt rules for violation fines. If you are going to adopt community rules for violation fines and please keep in mind our firm represents so many community associations, if I have any association board members or association property managers, there is a very different procedure for adopting rules in an association versus a landlord or rental property manager adopting community rules under a lease at a rental community. That’s what I’m talking about here.
So, if a landlord rental property manager is going to adopt community rules, make sure that that include a violation fine schedule or allow for violation fines for different offenses, different breaches of the lease, make sure those rules are in writing. The rules and the violation fines have to reasonably relate to the purpose and the violation for which they’re being adopted. That is a judge’s/in-court recommendation on my behalf because if I’m in court trying to enforce and collect violation fines under a rule and the judge is like, well I don’t really understand how a thousand dollars fine relates to a single cigarette butt on the sidewalk, I’m going to have trouble arguing that. So, make sure that your fines relate to the breach or the violation. The violation fines and the rules should apply to all tenants in a fair and uniform manner. You cannot have violation fines that are going to only be applied to some tenants and not other tenants. Just be very, very careful about that. You have to be very clear in your rules to inform the tenant what the violation would be and what it means to breach that provision. Like what they actually have to do to get in trouble and get this fine.
You also have to be careful that you are not violating public policy. That means you cannot have rules or assert fines that are going to infringe on the tenant’s freedom of speech or freedom to assemble and you cannot try to avoid your obligations under any ordinance or statute by adopting rules and fining tenants. You also cannot change substantive lease provisions. So, you cannot use your rules and violation fines to change provisions of the lease and make sure you are distributing your written rules and violation fines schedule to the tenants. I say at least 30 days before the date you begin enforcing. So violation fines, it is something clients want to use all the time as a method of deterring smaller lease breaches. These are, you know, where the dog or not picking up after the dog or if the property allows smoking but only in certain areas, smoking outside those areas and these might be lease violations that don’t really rise to the level of a 10 day notice and eviction, but you want some type of recourse and violation fines are a great recourse to curb the tenant’s behavior. But you can’t just willy-nilly levy fines against people. You have to have authority in the lease to levy fines or the lease should say that you are allowed to adopt rules and then you would adopt rules allowing you to levy fines and exactly what fines those would be.
Alright, so I hit everything, and we have a little bit of time. So, I have a question here on rent and this goes back I think to the electronic payments but it’s similar and it’s can I charge a fee if I’m picking up rent money from the tenant’s residence? I would say no. You are then creating different categories of tenants which could be construed as discriminatory. These might be tenants who are older. So you might end up with an age discrimination. It might be tenants who are in a poverty group who can’t afford a car. And so, I would be very, very concerned that by charging a fee only to the tenants to whom you have to go to to collect the rent, you could end up with a discrimination claim. I will also tell you if we ever tried to recoup that fee in court, the judges probably would never allow it. They would tell you that that is a cost of doing business as a landlord collecting the rent. So, I do not recommend that you charge another fee.
Does the landlord have to accept a self-employed applicant under the source of income law? That is a great question, and the answer would be yes because the income they are making from their own business being self-employed is the source of income with which they’re probably paying rent. So, if you are discriminating against all self-employed applicants, you are discriminating based on their source of income. So, I would be very, very careful with that. I agree it does not seem to be the purpose of the law. The purpose of the law is definitely to protect voucher holders and section eight tenants but if you have an ongoing policy where you deny or deny applications for all self-employed applicants, you definitely could be found in violation of that source of income law.
Would you recommend no longer taking security deposits based on the RLTO? That is an hour-long seminar. There are very, very many requirements relating to security deposits under the Chicago R L T O and the penalties are very steep. Usually, the penalty is possible return of the security deposit and definitely a penalty of two times the security deposit plus attorney’s fees. If this is something that does concern you, I would encourage you to reach out to us. We do provide all different services including review of leases, ordinance compliance to our clients and we can talk in a little bit more detail about what type of properties you have, how many security deposits you have, the extent of professional management and things like that that would help you comply with the security deposit requirements.
I do just want to take a minute to let everybody know about some of our podcasts. We have many, many, many podcasts that may be able to answer some of your questions. Just housing ordinance, criminal background screening. I hope everyone is aware who has properties in Cook County that there are strict requirements as to criminal background checks that you have to comply with, or you could end up with a discrimination complaint on your hands.
So that podcast is great for our Cook County clients and then just recently this spring I did a common mistake in an eviction seminar that we have turned into a podcast. So, if you are facing any eviction of your tenants, it kind of gives you a little bit more practical how to instead of just kind of blah, going through the entire eviction process. I tried to hit on the things our clients seem to have the most trouble with or most questions that we get asked in evictions. And last but not least there is my contact information if anybody needs it. Feel free to reach out if I was not able to answer your questions today and I appreciate everybody showing up and spending the last hour with me. I really like the FAQs cause I feel like we can cover so many different topics and hit a lot of really the most important ones that are hitting you guys on the front lines instead of what I think legally is important which sometimes does not always line up with the things that you guys get faced with every single day. So, I really enjoy this topic. Join us for part two of our FAQs and I look forward to it. Thanks so much. Have a great day.
Speaker 1: That was KSN attorney Jessica Ryan. KSN has provided landlords with affordable comprehensive legal services since 1983. We handle residential and commercial evictions, building code violations. We review leases, disclosures, and contracts. We can handle third party disputes with tenants. We can address rental property legal concerns including fair housing, section eight housing questions, landlord and tenants’ ordinances and we also provide property tax appeals for rental property owners. If you are a landlord or rental property manager experiencing any tenant issues or legal concerns, please call our office at (855) 537-0500. You can also visit our website, ksnlaw.com, and complete the contact form to send us a message. Thanks for listening.
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Please note the material contained on the KSN Podcast is for informational purposes only and does not constitute legal advice. No attorney-client relationship is established by your review or receipt of the information contained on the KSN Podcast. You should not act on the information discussed on the KSN Podcast without first obtaining legal advice from an attorney duly licensed to practice law in your State. While KSN has made every effort to include up-to-date information on The KSN podcast, the law can change quickly. Accordingly, please understand that information discussed on the podcast may not yet reflect the most recent legal developments. Material is not guaranteed to be correct, complete, or up to date. KSN reserves the right to revise or update the information and statements of law discussed on the podcast at any time, without notice, and disclaims any liability for your use of information or statements of law discussed on the podcast, or the performance of the podcast generally. The KSN Podcast may be considered advertising in some jurisdictions under applicable law/s and/or ethical rules/regulations. © 2023 Kovitz Shifrin Nesbit, A Professional Corporation.