Recent Changes to Illinois Law Affecting Residential Landlords and Property Managers, Pt 1

2024 brought several changes that affect Chicago-area residential property owners and property managers. We will run through some of those changes in order to provide insights into how they affect obligations moving forward. As with all shifts in responsibility, it’s important to connect with a professional who can properly assist managers and owners in complying. The overview will come out in two parts; this first piece covers the Illinois Landlord and Tenant Act, along with the Radon Awareness, and Human Rights Act. The follow-up will go over the Electric Vehicle Charging Act.

Illinois Landlord and Tenant Act

Electronic Funds Transfer

The Illinois Landlord and Tenant Act was amended to add a new section entitled “Ban on Electronic Funds Transfers as Exclusive Method Payment.” This new section bars Illinois residential landlords from requiring tenants to use electronic funds transfers (such as wire transfers or ACH payments) for payment of rent or any other amounts due to landlord under the lease. This section applies to leases, renewals, and extension agreements executed after January 1, 2024, but provides a grace period for compliance through March 31, 2024.

Under this new section, residential landlords should not provide any incentive (such as rent savings) for a tenant to use electronic funds transfers or charge a tenant for using payments besides electronic funds transfers. Landlords can continue to require that its tenants pay by hard copy check (outside of allowing electronic payments as one method of payment).

A violation of the Act will be considered a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, which authorizes a successful consumer to receive damages, attorney’s fees, and costs.

Heating and Cooling Standards

The Illinois Landlord and Tenant Act was further amended to provide that when a residential rental property in which rental or occupancy is limited to residents 55 years and older has a cooling system or heating system (or both) serving the entire premises, the landlord shall (1) from June 1 through September 30 have a cooling system that must operate when the heat index exceeds 80 degrees, (2) from October 1 through May 31, between 6 a.m. and 10 p.m., heat must register at least 68 degrees when the outside temperature is below 55 degrees and between 10 p.m. and 6 a.m. must register at least 62 degrees.

If the residential rental property does not have a premises-wide cooling system that serves individual dwelling units, then the landlord shall provide at least one indoor common space (lobby, lounge, conference room, party room, or other room that can accommodate multiple people) for free for which the cooling system operates when the heat index exceeds 80 degrees. However, if the residential rental property does not have an indoor common gathering space, it is exempt from providing such an indoor common gathering space.

Illinois Radon Awareness Act

This Act addresses the issue of radon in residential properties throughout Illinois. Like the Illinois Landlord and Tenant Act, this change in law applies to leases, renewals, and extension agreements executed after January 1, 2024. A landlord is required to provide each tenant in a unit on the second floor or lower at the time of application, before signing a lease, or any time at a tenant’s request: (a) findings or other documents related to radon levels in the unit that evidence the presence of radon risk; (b) a copy of the “Radon Guide for Tenants” brochure published by the Illinois Emergency Management Agency; and (c) a complete radon hazard disclosure form.

Moreover, if a tenant conducts a radon test and requests radon remediation as a result, the tenant must share the results of such test within 10 days of receiving them. Under the Act, a landlord or tenant is not required to perform radon testing.  Furthermore, a landlord is not required to install reduction measures even if there is a positive radon test. However, if after receiving results of a positive radon test at certain levels, the landlord does not take any steps to mitigate the radon levels within 60 days, the tenant can choose to terminate the lease or tenant has the right to hire a radon contractor at tenant’s own expense, upon prior consent by landlord.  Landlord is thereafter required to provide the test results to subsequent tenants that apply to lease units at the particular property.  Tenants have a continuing right to conduct a radon test on the unit if they do not do so within the initial 90 days of the commencement of the lease term, but upon a positive radon test do not have the right to terminate the lease. However, if the Landlord fails to provide the required documentation prior to entering into a Lease after the January 1, 2024 effective date, or fails to provide the required documentation upon tenant’s request, then tenant would have the right to terminate the lease or undertake mitigation activities at tenant’s expense after landlord’s consent.  It is important to note that if a tenant provides a positive radon test to landlord during the 90 day testing period, landlord has the option within 30 days to hire a radon contractor to conduct another test. If the result of the landlord’s testing is negative, this serves as proof of no hazard for two years.

Illinois Human Rights Act

A new section has been added to the Illinois Human Rights Act effective January 1, 2024. This section adds immigration status to its list of protected classes (race, color, religion, national origin, age, sex, etc.), which will now prohibit discrimination in any housing-related activity (including renting or selling) based upon an individual’s real or perceived citizenship or immigration status, unless the inquiry or use is in compliance with state or federal law.

Consequently, landlords should not request immigration documents if other forms of identification are available to verify a prospective tenant’s identity and conduct a credit or background check or inquire as to immigration status in landlord’s lease applications.

Illinois Security Deposit Return Act

The Act now applies to all landlords, including landlords of residential properties with fewer than five units (previously the Act only applied to landlords of residential properties with five or more units). Consequently, all Illinois residential landlords must provide tenants with itemized statements of damage within 30 days after the tenant vacates the property or the date of the right of possession ends (whichever is later) and return all or a portion of the deposit within 45 days.

Note that local laws like the Chicago Residential Landlord and Tenant Ordinance may provide additional obligations on landlords and property managers. Feel free to reach out to Chad, Tim or Thomas with questions on these changes and assistance with implementing the same.