New Legislation Affecting Housing Providers in 2025

Our team at Costello Sury & Rooney is dedicated to keeping our real estate clients up-to-date and well-informed of changes in legislation that could affect their businesses and real property. Additionally, although our attorneys are highly skilled in litigation, we also have the expertise to help our clients establish compliant practices, policies and procedures to minimize the risk of litigation at the outset. Below is a synopsis of important legislative amendments that take effect on January 1, 2025, which will affect the leasing of real property in Illinois with links to the full text of each new State law.

 

Amendments to the Illinois Landlord-Tenant Act

Additional Fee. Public Act 103-809 (720 ILCS 705/3.5). Establishes that if a landlord uses a third-party service to collect rent that incurs a transaction fee, landlord must also allow the tenant to make rental payments by delivering a paper check or cash to the landlord/their office or by means that do not require the tenant to pay an additional transaction fee. Applies to leases/agreements executed after the effective date of January 1, 2025.

Flood Disclosure. Public Act 103-075 (720 ILCS 705/25). Requires landlords to disclose potential flooding in rental and lease agreements prior to signing of the lease. The disclosure must be in writing. Defines flooding as overflow of inland or tidal waves, the unusual and rapid accumulation of runoff or surface waters from any established water source (such as a river, stream, or drainage ditch, or rainfall. This amendment is applicable to any lower-level unit that has experienced flooding in the last 10 years, if the property is located in a FEMA special hazard flood zone, or if the landlord has any actual knowledge of flooding of the property or parking areas. By failing to disclose of potential future flooding, a tenant may terminate their lease and if any damage occurs, they can sue the landlord for the damages suffered.

Please contact Amy Olson at aolson@csrlawfirm.com for assistance with the drafting of a written flood disclosure that complies with this new amendment.

Landlord-Tenant Credit Report. Public Act 103-0840 (720 ILCS 705/25). Note: citation to the Act is the same as the flood disclosure amendment. This is not a typographical error, but we do expect the citations to be updated once the amendments take effect. Allows tenants to use a “reusable tenant screening report” if the report contains current information, including, but not limited to:

• The prospective tenant’s name, contact information and last known address;
• A verification of source of income for the prospective tenant; and
• The results of an eviction history background check.

Further, a landlord cannot charge the prospective tenant a fee to access the report or an application screening fee if the tenant’s reusable screening report also contains the following criteria:

• A consumer credit reporting agency prepared the report within 30 days;
• The report is directly available to the landlord or via a third-party website that complies with state and federal laws;
• The report is accessible at no cost to the landlord to be used in the rental application process; and
• The report includes all the criteria which landlord consistently uses to screen prospective tenants.

Landlords can require a statement from the prospective tenant that no material change has occurred since the creation of the reusable tenant screening report.

 

Amendment to the Illinois Eviction Act

Landlord Retaliation Act. Public Act 103-0831 (735 ILCS 5/9-106.4). States that landlords are not able to take retaliatory action against a tenant who is making good faith requests or exercising any rights or remedies provided by law (referred to as “Protected Activity”). For example, a landlord may not terminate a tenancy or non-renew a lease if a tenant has, in good faith:

• complained of health, building, housing or a similar code violation or sought community assistance relating to same;
• organized or joined a tenants’ union or similar organization; or
• testified as to the condition of the premises.

Provides tenants a defense to retaliatory action and other such relief as:

• termination of the rental or lease agreement;
• return of all security deposit(s), interest, as applicable, and prepaid rent;
• recovery of possession of the premises if landlord has dispossessed tenant or in the process of dispossessing tenant; and/or
• damages the greater of two (2) months’ rent or double the actual damages tenant sustained plus reasonable attorney’s fees.

Landlord’s actions are presumed retaliatory if the conduct occurred within one year of a tenant’s Protected Activity. However, if Landlord can prove a legitimate, non-retaliatory basis for the action or that the landlord began the action taken prior to tenant engaging in the Protected Activity.

 

Lease Requirements for Multi-Family Properties with Freddie Mac/Fannie Mae Loans

Lastly, the Federal Housing Finance Agency (FHFA) has announced a new set of tenant protections for multi-family properties* that receive financing through Freddie Mac and Fannie Mae. The protections apply to all new loans signed on or after February 28, 2025, and require multifamily properties to include the following three (3) new, minimum standards in their lease agreements:

• 30-day written notice of a rent increase;
• 30-day written notice of a lease expiration; and
• 5-day grace period for rent payments.

Failure to comply with this amendment may result in penalties under the loan agreement.

*Exceptions: Manufactured Housing Communities; existing credit facilities including loans funded through credit facility agreements pre-dating February 28, 2025; loans for cooperative housing corporations; and loans originated using third-party form loan documents.