Evanston implements new landlord fee regulations starting January 1

The City Council of Evanston held a meeting on March 26, 2025, to discuss significant updates to tenant rights and landlord obligations under the Residential Landlord-Tenant Ordinance (RLTO). The meeting focused on new regulations that took effect on January 1, aimed at protecting tenants from excessive fees and ensuring transparency in rental agreements.

The first major change discussed was the limitation on late fees. Under the new ordinance, landlords can only charge a maximum late fee of $25 for rents of $1,600 or less. For rents exceeding $1,600, landlords may charge $25 plus an additional 5% of the amount over $1,600. For example, if the rent is $1,700, the maximum late fee would be $30.

Another important update pertains to fees associated with moving in. Landlords are now prohibited from charging application fees, credit check fees, and move-in fees that exceed the reasonable cost of the associated expenses. They are required to provide tenants with an itemized list of these costs, ensuring that charges are not inflated by routine maintenance expenses.

The meeting also addressed security deposits. Landlords are restricted to charging no more than one and a half times the monthly rent for security deposits. These deposits must be held in a federally insured bank in Illinois, separate from the landlord's personal funds. Upon a tenant's departure, landlords have 21 days to return the deposit, and they can only withhold funds for unpaid rent or damages beyond normal wear and tear. If any deductions are made, landlords must provide a detailed explanation within the same 21-day period.

Additionally, landlords can no longer circumvent these rules by labeling security deposits as nonrefundable fees or move-in fees. If a fee resembles a security deposit, it will be treated as such under the law. Furthermore, landlords are no longer required to pay interest on security deposits, a change that may affect tenants' expectations regarding their deposits.

The meeting concluded with a reminder for tenants to thoroughly read their leases and seek clarification on any unclear provisions. The City Council emphasized the importance of understanding rental agreements to avoid potential issues in the future. Overall, these updates reflect a commitment to enhancing tenant protections and promoting fair rental practices in Evanston.