Recent Changes to Illinois Real Estate Law Affecting Landlords, Tenants in 2025

2025 brought over 300 changes to the laws of the State of Illinois. Some of these new laws impact the relationship between landlords and tenants and also impose further restrictions on condominium associations. At the start of each new year, it is important that landlords stay up to date on the most recent laws. If any questions arise, landlords and tenants should seek legal counsel to determine how the changes affect their particular circumstances. The most prominent piece of legislation in real estate is the updated “Landlord Retaliation Act” but landlords and tenants should be aware of the other statutes being added to the books.

The Landlord Retaliation Act

The Landlord Retaliation Act (“Retaliation Act”), effective as of Jan. 1, prohibits landlords from taking retaliatory action against a tenant. This legislation repeals the Retaliatory Eviction Act of 1963, which was a narrower declaration that landlords who refuse to renew tenancy for retaliatory purposes were acting against public policy. Landlords are now prohibited from knowingly terminating a tenancy, increasing rent, or decreasing services in response to these complaints, as this would count as retaliation under the Retaliation Act.

Under this new legislation, tenants are protected from retaliation by a landlord when bringing complaints of code violations (which can include premises or other housing, health, or landlord practice violations) to landlords, governmental entities, or the news media in good faith. Additionally, the new legislation adds a rebuttable presumption that if the landlord’s conduct occurred within one year of the complaint being raised by the tenant, the landlord’s conduct was retaliatory.

Tenants are provided remedies for any violation of the Retaliation Act, which includes the right to terminate a lease. If a tenant sues under the Retaliation Act, the tenant can potentially recover the greater of three times the amount of damages sustained by the tenant or three months’ rent, along with reasonable attorney’s fees and punitive damages of up to $2,000.

Other Legislative Changes

Additional Means to Pay Rent

Section 3.5 was added to the Landlord and Tenant Act (“LAT Act”) to provide tenants an alternative means to pay rent if additional fees result from the use of electronic payment methods requested by landlords. While third-party payment portals can be convenient for many tenants and landlords, they often impose transaction fees or other charges with their services. Furthermore, for tenants with difficulties accessing the internet or traditional banking, these payment portals can act as a barrier to paying rent. With this new legislation, landlords can no longer require tenants to pay through electronic methods and must allow tenants to make their rental payments by delivering either a paper check or cash to the landlord. Section 3.5 of the LAT Act will apply to leases or agreements executed after January 1, 2025.

Disclosure of Potential Flooding

The newly added Section 25 of the LAT Act gives landlords an obligation to disclose to tenants in writing any risk of flooding prior to the signing of a lease. The LAT Act defines flooding as a “general or temporary condition of partial or complete inundation” of a property by water, such as “the unusual and rapid accumulation of runoff or surface waters from any established water source such as a river, stream, or drainage ditch.”

Disclosure must be made prior to the signing of the lease if any portion of the property is located in a FEMA Special Flood Hazard Area (“SFHA”), and if the landlord has actual knowledge of flooding of the rental property or surrounding parking areas. FEMA designates an SFHA as any high-risk flood zone specified on flood maps with the letters “A” or “V” that have a 1 in 4 chance of flooding during a 30-year mortgage.

In addition to SFHAs, the LAT Act also designates that disclosure must be made prior to the signing of a lease if a lower-level unit experienced flooding in the last 10 years. “Lower-level unit” is defined by the statute to include basement, garden level, and first-floor units. There is no knowledge limitation when making this disclosure, so landlords should be advised to look for signs or history of flooding on recently purchased properties.

In both cases, this disclosure must also be included in the written lease or renewal of a lease, and be signed by both landlord and tenant. The statute provides specific language that can serve as a model for these disclosures. Failure to comply with Section 25 of the LAT Act provides tenants the ability to terminate the lease by written notice. In the event that flooding affects the habitability of the property, in addition to any traditional rights that a tenant might have under tort law, the LAT Act specifically contemplates that tenants also have a right of action against the landlord to recover damages for personal property loss or damage as a result of the flooding.

Landlord – Tenant Credit Report

Prospective tenants can now sidestep fees associated with running credit checks. Effective Jan. 1, prospective tenants may provide landlords with a “reusable tenant screening report.” These reports must be in writing and prepared by a consumer credit reporting agency at the expense and request of a prospective tenant within the previous 30 days.

This amendment to the LAT Act also requires prospective tenants to provide their own report to make it available to the landlord at no additional cost. This does not prohibit landlords from collecting their own, separate reports at the landlord’s own expense, but prospective tenants may not be charged a fee if landlords choose to obtain a separate report. This amendment to the LAT Act will save tenants in the midst of an apartment search from repeated fees. If tenants do not provide this report, landlords are not prohibited by the LAT Act from charging a fee for obtaining a credit report.

Real Estate Resale Approval

Section 22.2 of the Condominium Property Act was amended to include broader protections for those purchasing and selling properties. The law was previously drafted to prohibit condominium associations from exercising a right of refusal or disapproval of a sale on the basis of a purchaser’s financing by the Federal Housing Administration, which distributes loans most commonly to lower-income homebuyers. Effective as of Jan. 1, this shield also covers sellers from any “discriminatory or otherwise unlawful purpose” used by condominium associations in blocking a sale, a term which is left undefined in the statute. Additionally, sellers and purchasers are granted a right of action in a State of Illinois circuit court against the condominium association if they are in violation of Section 22.2.

Note that the above laws may provide additional obligations on landlords and property managers. Feel free to reach out to Chad Poznansky or Thomas Ball with questions on these changes and assistance with implementing the same.”

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