On April 8, 2026, the Illinois legislature officially passed House Bill 3564 with a vote of 60-40. The author of the bill, Representative Nabeela Syed of the 51st District (Hawthorne Woods, Long Grove, Lake Zurich, Deer Park, Kildeer, Palatine, Rolling Meadows, Hoffman Estates, Schaumburg) has introduced a trailer bill, HB5234 to move the effective date of the bill to January 1, 2027.
What does the bill say?
No landlord may charge both a security deposit and a move-in fee or move-out fee.
All non-optional fees, one-time or recurring, shall be explicitly contained on first page of lease agreement. If the fee is not listed on the first page of the lease, the tenant shall not be liable for payment.
Ban on junk fees:
Fee for rental application, including background checks, cannot exceed $50 unless the actual cost charged by the third party provider is greater than $50, the landlord pays the upfront cost, and landlord bills tenant within 14 days and provides receipt. If bill and receipt not provided in 14 days of the background check, the tenant is not liable to pay. Failure to pay may not be used as grounds for eviction.
Any fee or fine ancillary to the application fee intended to duplicate the costs of tenant screening or unrelated to screening.
A fee or fine for modification or renewal of lease.
A fee or fine for eviction notice or filing eviction action prior to court order. Does not limit court awarding fees at conclusion of case.
A fee or fine for after hours requests or maintenance.
A fee or fine for contacting building owner or property manager for maintenance or service requests, lease questions, or anything related to tenancy.
A fee or fine for travel to complete work or repairs to unit.
A fee or fin for hotline service for tenants to call.
A fee or fine for routine maintenance.
A fee or fine for pest removal.
A fee or fine for in-person inspection at move-in or move-out.
If you charge a move-in or move-out fee, you must provide an itemized list of the reasonable estimate of costs of services, including any bundled services, that make up the move-in or move-out fee.
The tenant may opt out of any bundled services on the itemized list.
The move-in or move-out fee shall not be in excess of the costs in the itemized list.
The landlord may NOT charge the tenant for costs associated with routine maintenance and upkeep of the unit or premises.
What does this mean?
Landlords in Chicago have avoided taking security deposits to avoid exposure to predatory legal action under the Chicago RLTO. The RLTO is notorious for containing several provisions that award tenants double, or triple, the amount of the security deposit in automatic damages for small infractions with no right to cure. It resulted in a field of lawyers that represent tenants by looking for any infraction in order to penalize the landlord and collect fees. HB3564 is a statewide bill that has little effect for downstate landlords but huge ramifications for Chicago landlords. Clients will have to weigh the risk of accepting security deposits.
Landlords often use move-in and move-out fees to cover the costs to prepare a unit for rent. Bob Floss II, as a member of the Illinois State Bar Association Real Estate Law Section Council, submitted commentary on the bill that handcuffing the costs landlords incur in turning over a unit will directly lead to further raising rents. Unfortunately, the legislature moved forward with the bill. This measure surely will be used by the 22 State Representatives and 12 State Senators as a campaign point in re-election. As the nation grapples with affordable housing, the Illinois legislature has put additional burden on landlords that will require passing along those costs through higher rents across the state.