Important Alert: New Illinois Rental Fee Transparency Law (Effective Jan 1, 2027)

If you own or manage residential apartment building in Illinois you need to be aware of an important legislative update. A new state law, 765 ILCS 705/35 (originating from House Bill 3564 / Public Act 104-479), introduces strict guidelines regarding rental fee transparency and limitations.

Commonly referred to as the “junk fee” law, this statute officially takes effect on January 1, 2027. Because it will fundamentally change how you market your units and structure your leases, you should begin reviewing your properties’ standard procedures well before the compliance deadline.

Key Requirements Under the New Law

• Upfront Fee Disclosures: You must clearly disclose all non-optional (mandatory) fees—whether one-time or recurring—in both the property listing and on the very first page of the lease agreement. If a mandatory fee is not properly disclosed, you legally cannot collect it.
• Application Fee Cap: Rental application fees, which include the cost of background and screening checks, are strictly capped at $50.
• Ban on Bundled Packages: Landlords can no longer force tenants to pay a mandatory “bundled services fee” or “resident benefit package” that mixes optional perks with non-optional services.
• Prohibited Fees: The statute explicitly bans charging tenants for certain operational costs, including:
  • Fees or fines for a maintenance hotline service or submitting standard service requests.
  • Fees for conducting in-person move-in or move-out walk-throughs.
  • Pest abatement or removal fees, unless the tenant is explicitly at fault for the infestation.

Exceptions and Penalties

These restrictions apply to standard residential apartment buildings, but do not apply to owner-occupied buildings that contain six units or fewer. Non-compliance carries high risks, as the law grants tenants the right to sue for monetary damages, legal costs, and attorney fees.

Next Steps for Your Portfolio 

To ensure your properties are fully compliant before January 1, 2027, we highly recommend taking the following actions now:

1. 1. Audit Your Listings: Review your online advertisements and marketing materials to ensure all mandatory utility bills or ancillary charges are clearly displayed upfront.
   2. Update Your Lease Templates: Work with your legal counsel to revise the first page of your standard residential lease so that it explicitly itemizes every non-optional tenant charge.
   3. Adjust Management Software: Update any property management portals or third-party applicant screening software to guarantee application fees do not cross the $50 threshold.