Illinois limits landlord fees and outlines security deposit regulations

The City Council of Evanston, Illinois, recently held a webinar to discuss significant updates to the Landlord-Tenant Ordinance, aimed at enhancing tenant protections and clarifying landlord responsibilities. These changes, effective immediately, are designed to address concerns about excessive fees and improve transparency in rental agreements.

One of the most notable updates is the introduction of limits on late fees. Previously, landlords could impose any amount as a late fee, but under the new ordinance, the maximum late fee is capped at $25 for rents below $1,600. For rents above this threshold, landlords can charge $25 plus an additional 5% of the amount exceeding $1,600. For instance, if rent is set at $1,700, the maximum late fee would be $30. This change aims to protect tenants from exorbitant late fees that can exacerbate financial strain.

Additionally, the ordinance now restricts landlords from charging application fees, credit check fees, and move-in fees that exceed the actual costs incurred. Landlords must provide tenants with an itemized list detailing these costs, ensuring transparency and accountability. This measure is particularly significant as it prevents landlords from imposing arbitrary fees that do not reflect the true expenses associated with the rental process.

The ordinance also clarifies that landlords cannot charge tenants for routine maintenance costs as part of move-in fees. For example, costs related to repainting or general upkeep cannot be passed on to new tenants, reinforcing the principle that such expenses should be covered by landlords as part of their property management responsibilities.

Another key aspect of the updated ordinance is the handling of security deposits. While the existing rules remain largely unchanged, they continue to stipulate that landlords cannot charge more than 1.5 times the monthly rent for a security deposit. Furthermore, landlords are required to hold these deposits in a separate, federally insured bank account and return them within 21 days after a tenant moves out, unless deductions for damages or unpaid rent are warranted.

These updates reflect a growing recognition of the need for fair rental practices in Evanston, particularly as housing demands increase. By implementing these changes, the City Council aims to foster a more equitable rental market, ensuring that tenants are treated fairly and that landlords adhere to clear guidelines. As these new regulations take effect, both landlords and tenants will need to adjust their practices to comply with the updated ordinance, marking a significant shift in the landlord-tenant relationship in Evanston.