Chicago Landlords: Navigating Proposed Renter Protection Laws and 'Junk Fee' Bans
Upcoming Changes in Chicago's Rental Market
The Chicago City Council is currently debating legislative changes that would affect landlords, property managers, and tenants across the city. The proposals include a ban or cap on certain "junk fees" and the adoption of a "Tenant Bill of Rights." Whether these measures ultimately help or hurt either side is a matter of real debate, and this article does not take a position. Our goal is to help property owners understand what is being proposed, where the open questions are, and how to prepare.
The Chicago Residential Landlord and Tenant Ordinance (RLTO) already establishes extensive tenant protections. The current proposals would modify parts of that framework, adding some restrictions while changing or removing others.
The 'Junk Fee' Ban: What Landlords Need to Know
A central component of the proposed legislation is a ban or cap on fees often described as "junk fees." The precise definitions and scope are still being finalized, but landlords should be prepared for possible restrictions on:
- Application fees: Limits on the amount charged, or a complete prohibition.
- Move-in/move-out fees: Charges separate from security deposits.
- Amenity fees: Fees for amenities that are not clearly optional or are already included in rent.
- Convenience fees: Charges for paying rent online or for other standard services.
- Late fees: Possible caps on the amount and frequency of late fees.
The stated goal is to increase transparency and reduce upfront and hidden costs for renters. However, it is not yet clear that tenants will have any practical way to enforce these protections. The proposal does not appear to spell out a clear mechanism for a tenant to challenge a prohibited fee or recover it. Even so, landlords should review their current fee structures now so they are positioned to comply if and when the ordinance is enacted.
The 'Tenant Bill of Rights': What It Does and Doesn't Change
The proposal describes itself as a "Tenant Bill of Rights." It addresses topics such as:
- Eviction protections: Notice requirements and grounds for eviction.
- Security deposit handling: How deposits are held, deducted from, and returned.
- Application screening: The use of credit and criminal background checks.
- Right to organize: Protection for tenants who form unions or associations.
Despite its name, the "bill of rights" largely restates rights tenants already have under existing law. It does not appear to create or establish meaningful new rights for tenants. For landlords, this means the day-to-day compliance picture may change less than the title suggests, though any revised procedures, notices, or deposit rules in the final ordinance will still need careful review.
Preparing for Changes: Compliance Strategies
Regardless of how the debate is resolved, landlords can take practical steps now:
- Review all fees: Inventory every charge beyond base rent and assess whether it could fall under the proposed "junk fee" definitions.
- Update lease agreements: Be ready to revise lease templates to remove prohibited fees and add any new required disclosures.
- Educate staff: Make sure property managers understand any changes affecting fees, tenant communications, and screening.
- Seek legal counsel: Consult an attorney experienced in landlord-tenant law to interpret the final ordinance as it applies to your properties.
Stay Informed
The legislative picture is still developing. Monitor updates from the Chicago City Council and consult legal counsel as the proposals move forward.
Enforcement and Consequences of Non-Compliance
One of the biggest open questions is who will have the right to enforce the new law. It is currently unclear whether enforcement will rest with the City, with individual tenants, or with both. That uncertainty makes it difficult to predict the practical consequences of a violation, which could include:
- Fines or penalties if the City is given enforcement authority.
- Tenant disputes or litigation if tenants are given a private right of action.
- Class action exposure if widespread violations are actionable by groups of tenants.
Even with enforcement unsettled, getting ahead on compliance is a sensible approach. Adjusting fee structures and lease documents early is generally less disruptive and less costly than reacting after the law takes effect.
Counterarguments from Property Owners
Landlord associations and property owner groups have raised several concerns:
- Increased operating costs: Banning or capping fees may reduce landlords' ability to cover legitimate administrative and maintenance expenses.
- Higher base rents: Landlords may raise rents to offset lost fee income, affecting affordability in a different way.
- Reduced housing supply: Stricter regulation could discourage investment in rental housing.
- Administrative burden: New requirements may be especially difficult for small property owners to manage.
Counterarguments from Tenants and Tenant Advocates
Critics on the tenant side argue that the proposal could leave renters worse off than current law:
- Weaker disclosure rights: The proposal appears to weaken a tenant's right to receive a disclosure of their rights before becoming bound by a lease.
- Loss of security deposit protections: It would eliminate long-standing protections over security deposits, which critics say makes it more likely that landlords will keep or spend deposits rather than return them.
- Unresolved ambiguities: It does not fix existing ambiguities in the law that have made tenant rights complicated to enforce.
A Competing Proposal
A separate, more landlord-friendly proposal is also being advanced as a counter to this ordinance. Tenant advocates contend that it would be even less favorable to renters than the current proposal. Landlords should follow both measures, since the final law could draw from either.
Understand How Chicago's Proposed Rental Laws Affect Your Properties
Contact CTM Legal Group for guidance on Chicago's proposed renter protection laws and "junk fee" regulations, and on preparing your leases and fee structures for what comes next.
LEGAL DISCLAIMER: This blog post is for informational purposes only and does not constitute legal advice. Do not rely on this information for legal decisions. CTM Legal Group is not your attorney unless we have a signed, written retainer agreement in place. For specific legal advice regarding your situation, please consult with a qualified attorney.