Illinois enacts new rules on rental fees and security deposits

In a recent meeting held on March 7, 2025, the City Council of Evanston discussed significant updates to the Rental Ordinance, focusing on the rights and responsibilities of landlords and tenants. This revision aims to enhance transparency and fairness in rental agreements, addressing common concerns about fees and security deposits.

One of the key changes involves the regulation of late fees. Under the new ordinance, landlords can charge a maximum late fee of $25 for rent amounts up to $1,600. For rents exceeding this threshold, the late fee can increase to $55 plus an additional 5% of the rent amount above $1,600. This structured approach seeks to prevent excessive charges that could burden tenants facing financial difficulties.

The ordinance also introduces stricter guidelines regarding various fees that landlords may impose. Landlords are now required to provide detailed explanations for any charges related to application fees, credit checks, and moving expenses, ensuring that these costs are reasonable and justifiable. This change aims to protect tenants from unexpected or inflated fees that do not reflect actual expenses incurred by the landlord.

Additionally, the ordinance sets clear limits on security deposits. Landlords cannot charge more than 1.5 times the monthly rent as a security deposit. For instance, if the monthly rent is $1,000, the maximum security deposit would be $1,500. This regulation is designed to prevent landlords from demanding excessive upfront payments that could hinder tenants' ability to secure housing.

The ordinance also mandates that security deposits be held in a separate, interest-bearing account, ensuring that tenants' funds are protected and not mixed with the landlord's personal finances. Upon a tenant's departure, landlords are required to return the security deposit within 21 days, provided there are no outstanding rent payments or damages beyond normal wear and tear.

These updates reflect a growing recognition of the need for fair housing practices in Evanston, particularly as the community grapples with rising housing costs. By establishing clearer rules and protections for tenants, the City Council aims to foster a more equitable rental market.

As the ordinance moves forward, stakeholders will be watching closely to see how these changes impact both landlords and tenants in Evanston. The council's commitment to addressing housing issues signals a proactive approach to ensuring that all residents have access to fair and affordable housing options.