Category: Landlord Guides

What Is the FARE Act and Why It Changed Everything for NYC Landlords

On February 1, 2024, New York City’s Fairness in Rental Housing Act (the “FARE Act”) took effect, fundamentally restructuring how broker fees work in residential leasing. Before this date, it was standard practice—and technically legal—for landlords to charge tenants broker fees, often ranging from 10% to 15% of the first year’s rent. That practice is now illegal.

The FARE Act, codified primarily in NYC Administrative Code § 20-711, shifted the cost burden away from tenants and onto landlords and brokers. The stated purpose: remove a hidden financial barrier that kept lower-income renters out of the market and reduced transparency in the leasing process.

For self-managing landlords, this change has direct operational and financial consequences. You must understand the new rules to avoid costly litigation, treble damage judgments, and regulatory enforcement actions. The statute is strictly enforced by both private tenant lawsuits and government agencies.

The Core Rule: Who Pays Broker Fees Under FARE Act

Landlords Must Bear the Cost (The Default)

Under § 20-711, the landlord is the party responsible for paying broker compensation. This applies to any rental unit in New York City—whether it’s a single-family home, an apartment in a multi-unit building, a co-op share, or a condo. Market-rate and rent-stabilized units are both covered.

If you use a broker to find and lease a tenant, the broker’s commission is your cost, not the tenant’s. This is the default legal position. There are no exceptions based on unit size, neighborhood, or lease term.

Voluntary Tenant Payment (Limited & Dangerous)

The statute is not absolute. Tenants may voluntarily agree to pay broker fees—but only if three strict conditions are met:

1. The agreement must be entirely voluntary — The tenant cannot be coerced, pressured, or required to pay as a condition of leasing. Any hint of duress, conditionality, or inducement to sign a lease voids the voluntary nature.
2. The agreement must be documented in writing — Verbal agreements or understanding don’t count. The voluntary fee arrangement must be clearly stated in the lease or a separate written addendum.
3. The tenant must understand the terms — The written agreement must disclose the fee amount, the broker’s identity, and that payment is entirely optional and not a prerequisite to tenancy.

In practice, most landlord attorneys and brokers avoid voluntary tenant payment agreements because they are litigation magnets. A tenant who later claims they felt pressured, didn’t understand the agreement, or were told “everyone pays it” can sue and potentially win treble damages. The burden of proving true voluntariness falls on you as the landlord.

Cooperating Broker Agreements (The Safe Middle Ground)

Many landlords use cooperating broker agreements to split the cost. For example:

• The landlord’s agent (your broker or the property manager’s broker) represents you and splits commission with the tenant’s agent (the broker who brings the applicant).
• The cooperating agreement is between brokers and their brokerages, not between the landlord and the tenant.
• The tenant pays nothing; all broker compensation flows from the landlord’s rental income or listing commission budget.

This structure is compliant because the tenant is not charged. The tenant-side broker is paid by the landlord’s side, which is permitted under the statute.

Specific Compliance Requirements

Lease Language & Disclosures

Your lease must include clear language about broker compensation. At minimum, it should state:

• Whether any broker is involved in the transaction
• Who is responsible for paying the broker (i.e., “Landlord” or “Tenant”)
• If a tenant is voluntarily paying (rarely recommended), the amount and written consent language
• Any cooperating broker arrangement, if applicable

Sample compliant language:

“Broker Compensation: Landlord is responsible for all broker fees and commissions in connection with this lease. Tenant is not obligated to pay any broker fee. Any broker compensation shall be paid solely by Landlord or through cooperating broker commission splits.”

Avoid vague language such as “broker fees TBD” or “to be negotiated.” Courts and regulators interpret ambiguous lease terms against the landlord.

Documentation Requirements for Audits & Disputes

If you use a broker, keep records of:

• The broker agreement or listing agreement signed by you and the broker, showing the commission percentage or flat fee
• Cooperating broker emails or MOUs detailing how commission is split
• Invoices and payment receipts showing you paid the broker (not the tenant)
• The signed lease with the broker fee disclosure clause
• Any written agreements with tenants regarding voluntary payment (if applicable)

In the event of a tenant lawsuit or government investigation, you’ll need to prove that the tenant was not charged. Clean documentation is your defense.

Penalties for Non-Compliance

Private Tenant Lawsuits

If you (or your broker) charge a tenant a broker fee in violation of § 20-711, the tenant can sue in civil court. The statute provides for:

• Treble damages — Three times the amount of the broker fee charged, plus
• Attorney fees and costs — The tenant’s legal fees and court costs
• Interest — As calculated by the court

Example: You charge a tenant a $15,000 broker fee. The tenant sues. The court awards treble damages: $45,000. Plus the tenant’s attorney fees ($10,000-$25,000) and court costs ($2,000-$5,000). Your total exposure: $57,000-$75,000 for a single violation.

These lawsuits are increasingly common. Tenant advocacy groups and legal aid organizations have publicized FARE Act rights, and many tenants now know to sue when charged illegally.

Regulatory Enforcement

The Department of Consumer and Worker Protection (DCWP) and the Department of Housing Preservation and Development (HPD) enforce the FARE Act. They can:

• Issue civil penalties — Up to $500 per violation (per § 20-711(h))
• Pursue administrative proceedings — Without a court trial, if the violation is found in an HPD/DCWP investigation
• Publish enforcement actions — Regulatory findings can damage your reputation and trigger more tenant lawsuits
• Require restitution — Return of all illegal fees charged to any tenant

Enforcement is not random. Tenants can file complaints with DCWP (311 complaint system) or HPD. Once a complaint is filed, you’ll be contacted for your response. Denying the fee was charged when evidence exists is dangerous; regulators take obstruction seriously.

Common Compliance Mistakes & How to Avoid Them

Mistake 1: Burying Broker Fee Terms in Boilerplate Lease Language

The Problem: You mention “broker fees subject to applicable law” in a dense 50-page lease and expect tenants to find and understand it. Courts have ruled that vague, hidden, or unclear fee disclosures don’t satisfy the FARE Act’s transparency requirement.

The Solution: Use a separate, clearly labeled “Broker Fee Addendum” or a prominent section in the lease marked “TENANT NOTICE — BROKER FEE POLICY.” Use plain language. Consider having the tenant initial this section separately.

Mistake 2: Allowing Your Broker to Collect Fees from Tenants

The Problem: You hire a broker and assume they handle “their own arrangements” with tenants. Later, you learn the broker charged a tenant a fee without your knowledge or authorization. You’re still liable; the broker’s actions bind you.

The Solution: Add explicit broker fee language to your broker agreement. Require the broker to indemnify you if they charge a tenant illegally. Include a clause stating: “Broker shall not collect any fee, commission, or payment from Tenant in connection with this lease. All Broker compensation shall be paid by Landlord.”

Mistake 3: “Voluntary” Fee Agreements That Aren’t Actually Voluntary

The Problem: You say the fee is “optional,” but you advertise the apartment at a lower rent on condition that the tenant pays a broker fee, or you make it clear that tenants who don’t pay fees are less desirable. Courts and regulators view this as de facto coercion.

The Solution: If you truly allow voluntary tenant payment, make it completely optional and never condition the lease, rent amount, or unit quality on whether the tenant pays. Better yet: don’t allow it. The litigation risk isn’t worth the savings.

Mistake 4: Not Updating Leases Created Before February 1, 2024

The Problem: Old lease templates from 2023 or earlier often included tenant broker fee language. If you’re renewing tenants or using these old forms, you may inadvertently trigger non-compliance.

The Solution: Audit all lease templates and renewal forms now. Remove any language charging tenants broker fees. Consult a NYC real estate attorney to confirm your updated language complies.

Practical Compliance Checklist for Self-Managing Landlords

How Broker Fee Structures Work Legally Under FARE Act

Structure 1: Landlord Pays Full Commission

How it works: You list the apartment with a broker and pay a 5-6% commission (or negotiated rate) to the broker’s brokerage. No tenant involvement. The broker recovers their cost from your rental budget or lease security deposit (if applicable).

Compliance status: Fully compliant. No tenant fee liability.

Common for: Self-managing landlords with higher rent budgets; corporate or institutional landlords.

Structure 2: Cooperating Broker Agreement (Split Commission)

How it works: Your listing broker (Broker A) agrees to split commission with the tenant’s broker (Broker B). For example:

• Listing commission to Broker A: 3%
• Broker A promises Broker B: 2.5% (from Broker A’s share)
• Net cost to you: 3% to Broker A, who pays out of their commission

Compliance status: Fully compliant if the agreement is broker-to-broker. Tenant pays $0.

Common for: Apartment buildings with professional brokers; competitive leasing markets.

Structure 3: Flat Fee Broker + No Cooperating Arrangement

How it works: You pay the broker a flat fee ($1,500-$3,000 per lease) regardless of rent amount. Tenant sourcing is the tenant’s responsibility or done via in-house agents.

Compliance status: Fully compliant. You bear the cost.

Common for: High-volume landlords; portfolio managers.

Structure 4: Voluntary Tenant Payment (Not Recommended)

How it works: The lease includes a written agreement stating the tenant may voluntarily pay a broker fee (typically 10-15% of first-year rent) if they choose. The payment is 100% optional and not tied to lease approval.

Compliance status: Technically compliant IF all three conditions (voluntariness, written agreement, clear disclosure) are met. However, litigation risk is extremely high. Tenants frequently claim they felt pressured or didn’t understand the terms. You’ll need to defend the lawsuit and prove voluntariness.

Common for: Very few landlords use this post-FARE Act; not recommended.

FAQ: New York FARE Act Broker Fees

Q: Does the FARE Act apply to my out-of-state properties or properties outside NYC?

A: No. The FARE Act is specific to New York City. It applies to any residential unit located within the five boroughs (Manhattan, Brooklyn, Queens, The Bronx, Staten Island). Properties in Westchester, Long Island, or upstate New York are not covered by § 20-711. However, always check local law; other jurisdictions may have their own broker fee restrictions. Consult an attorney in that jurisdiction.

Q: What if a tenant offers to pay the broker fee as a “gift” or “loan”?

A: Don’t accept it. The statute forbids you from accepting any payment from the tenant for broker fees, regardless of how it’s labeled. A “gift” is still payment. A “loan” the tenant will never repay is also payment. If the tenant insists on paying for some reason, document your refusal in writing and keep the email. This protects you from later claims that you demanded or coerced the payment.

Q: Can I reduce the advertised rent if the tenant agrees to pay a broker fee?

A: No. If you advertise an apartment at $3,000/month and then tell the tenant, “It’s $3,000 plus a $4,500 broker fee,” or “It’s $2,500/month if you pay a $4,500 broker fee,” you are effectively charging a broker fee disguised as a rent adjustment. Courts and regulators view this as circumventing the FARE Act. The advertised rent must be the actual rent, regardless of broker fee arrangements.

Q: I already charged a tenant a broker fee before I learned about the FARE Act. What do I do?

A: Contact the tenant immediately, apologize, and offer restitution. Return the full fee plus interest (typically 5-10% depending on how long you’ve held the money). Send a written letter acknowledging the violation. Do not wait for a lawsuit. Proactive restitution may reduce damages if the tenant sues anyway. Document the refund with a check or bank transfer. Consider consulting a real estate attorney about broader exposure if you’ve charged multiple tenants.

Q: What if the tenant and I verbally agree they’ll pay a broker fee?

A: A verbal agreement is not binding and does not satisfy the FARE Act’s requirement for written documentation. More importantly, verbal agreements are your worst defense in a lawsuit because you have no proof the tenant actually consented. A tenant can claim you pressured them or that no such conversation occurred. Never rely on verbal agreements for broker fee arrangements. If you allow tenant payment, it must be in a signed, written document separate from the lease.

Updating Your Systems to Ensure Compliance

If you use a property management platform or rent collection system, ensure your lease templates and admin workflows reflect FARE Act compliance. LeaseBase’s lease operations tools allow you to customize lease language, track broker agreements, and flag broker fee disclosures for audit. Automated compliance checks ensure no lease is signed without proper broker fee language.

The LeaseBase Compliance Engine continuously monitors your operations against NYC housing law, including FARE Act requirements. If a new regulation is enacted or guidance is updated, you’re alerted. This is especially important in NYC, where landlord-tenant law changes frequently.

For landlords managing multiple units, portfolio management tools help you track which leases were signed under which rules and which tenants may be owed restitution if you’ve had any past violations.

Real-World Scenario: FARE Act Compliance in Action

Scenario: You own a 12-unit apartment building in Williamsburg, Brooklyn. You hire Broker A to list and lease units at $2,500/month. Broker A has an agreement with a cooperating broker network. A tenant, Jane, applies through Broker B (the cooperating broker). You lease to Jane at $2,500/month for 12 months.

What should happen (compliant path):

1. You sign a listing agreement with Broker A stating a 5% commission ($1,500 per lease).
2. Broker A’s brokerage has a standing agreement to pay Broker B 2.5% ($750) from Broker A’s commission.
3. Jane receives a lease with clear language: “Landlord is responsible for all broker compensation. Tenant is not obligated to pay any broker fee.”
4. Jane signs the lease. Her rent is $2,500/month. She pays $0 for brokerage services.
5. You pay Broker A $1,500 at lease signing (from your leasing budget or from rent collected).
6. Broker A pays Broker B $750 out of the $1,500 received.
7. You keep records: the listing agreement, the broker-to-broker email or MOU confirming the split, the signed lease with the broker fee disclosure, and the receipt showing you paid Broker A.

Why this is compliant: Jane (the tenant) was charged $0. All broker fees came from you (the landlord). The arrangement was broker-to-broker, not landlord-to-tenant. The lease clearly disclosed the fee responsibility.

What would NOT be compliant: If you told Broker B to collect a $750 fee directly from Jane, or if your lease said “Tenant responsible for broker commission,” or if you advertised “$2,500/month + $1,500 broker fee paid by Tenant.”

Staying Current With FARE Act Enforcement Trends

As of August 2026, DCWP and HPD have handled hundreds of FARE Act complaints. Enforcement patterns to watch:

• Digital leasing platforms — Some online apartment listing platforms were charged with violating FARE Act because they automatically charged tenant broker fees. Check whether your listing website complies.
• Broker-side violations — Brokers charging tenants directly, even without landlord knowledge, generate complaints that can implicate the landlord. Your broker agreement indemnification clause is critical.
• Rebranding of fees — Some landlords try to hide broker fees as “leasing fees,” “agent fees,” or “application processing fees.” Regulators are alert to this and treat rebranded fees as illegal broker fees.
• Cooperating broker transparency — HPD expects clear documentation that cooperating broker agreements are in writing and that tenants were not charged. Verbal or informal broker splits generate suspicion.

Monitor HPD’s website and DCWP’s enforcement actions for updates. Trade publications like Real Estate Board of New York (REBNY) alerts also cover new guidance.

Conclusion: Compliance as a Competitive Advantage

The FARE Act is not a loophole-riddled statute. It is a clear, enforceable rule: landlords pay broker fees, not tenants. For self-managing landlords, this means your leasing costs are higher than they were pre-2024, but your legal exposure is also lower if you follow the rule consistently.

The key to staying compliant:

• Use a FARE Act-compliant lease template with clear broker fee language.
• Keep documentation of all broker agreements and payments.
• Never allow tenants to be charged (except in rare, heavily documented voluntary arrangements).
• Train any agents or brokers you work with on the prohibition.
• Audit your past leases and offer restitution if violations exist.

Compliance with broker fee rules is not optional; it is a legal floor. Landlords who treat it as a negotiable or flexible rule expose themselves to treble damages, attorney fees, and regulatory enforcement. Landlords who treat it as non-negotiable avoid costly litigation and build tenant trust in the process.

What Is ORS 90.305 and Why Does It Matter?

Oregon Revised Statute 90.305 is one of the state’s foundational landlord-tenant laws, and it exists to solve a very real problem: tenants need to know who their landlord is and how to contact them. You might think this is obvious, but Oregon legislators saw enough cases of tenants unable to reach landlords or unsure whom to pay rent to that they codified the requirement.

The statute is short and direct:

“A landlord shall disclose to a tenant in writing, before or at the time the tenant is to begin occupancy of the dwelling unit, the name, address and telephone number of the person who is authorized to manage the premises and act as agent for service of process on behalf of the landlord.”

This isn’t a suggestion or best practice recommendation—it’s a legal requirement. Violations carry statutory damages, meaning a tenant can win a lawsuit even if they suffered no actual financial loss. For self-managing landlords with 2–75 units, this is a critical compliance box to check before handing over keys.

Who Must Comply With ORS 90.305?

Oregon’s landlord-tenant law applies broadly. If you own residential property and enter into a lease agreement with a tenant, you are a “landlord” under ORS 90.305. This includes:

• Individual property owners managing their own rental units
• LLCs and partnerships that own residential property
• Corporate landlords of any size
• Out-of-state landlords (the statute still applies if the property is in Oregon)
• Landlords using property managers or agents (you must still comply, though you’re identifying your manager)

The statute applies to all residential tenancies in Oregon, including:

• Single-family homes
• Multi-unit apartments
• Condominiums
• Townhouses
• Mobile home parks (with some additional requirements under ORS 90.485)

The only exemptions are for owner-occupied properties with four or fewer units where the owner lives on-site, and some public housing and subsidized rental situations. If you’re self-managing anything larger, you’re covered.

What Exactly Must You Disclose?

The Three Required Elements

ORS 90.305 requires disclosure of three pieces of information:

What About Email and Emergency Contact?

The statute does not explicitly require email or emergency contact information, but Oregon courts and the Oregon Department of Consumer and Business Services have indicated that providing these details strengthens compliance and demonstrates good faith. While technically not required, it’s a best practice that reduces dispute risk.

Many Oregon landlords now include:

• Email address for non-urgent maintenance requests and rent payment confirmations
• Emergency phone line or after-hours contact procedure
• Preferred method for submitting maintenance requests (phone, email, online portal)

These additions don’t replace the three required elements, but they show professionalism and reduce tenant complaints that they “couldn’t reach” the landlord.

When Must You Provide This Disclosure?

Timing is explicitly controlled by the statute:

“Before or at the time the tenant is to begin occupancy”

This means:

• Before occupancy begins (preferred) — Provide disclosure with the lease documents, in a separate addendum, or in writing during the application/approval process
• At the time of occupancy (acceptable but riskier) — Hand the disclosure to the tenant when you provide the keys or on move-in day
• After occupancy starts (VIOLATION) — Sending disclosure information weeks or months after the tenant moves in does not satisfy the statute

From a risk perspective, the safest approach is to include the disclosure in or with the lease agreement itself, so there’s a clear, dated record that the tenant received it before signing.

Example Disclosure Language

Here’s language you could include in your lease or as a separate addendum:

LANDLORD INFORMATION

Landlord/Owner Name: [Full Legal Name]
Mailing Address: [Street Address, City, State, ZIP]
Telephone Number: [Working Phone Number]

If applicable:
Property Manager Name: [Manager/Agent Name]
Manager Address: [Address]
Manager Phone: [Phone Number]

The above person(s) are authorized to manage the premises and receive service of legal process on behalf of the landlord per ORS 90.305.

LeaseBase’s lease operations tools can help you standardize this disclosure across all your leases, ensuring consistent compliance language and reducing the risk of omission.

Who Counts as Your “Agent” or “Authorized Manager”?

ORS 90.305 requires disclosure of “the person who is authorized to manage the premises and act as agent for service of process on behalf of the landlord.”

This person can be:

• You (the landlord) — If you self-manage, you disclose your own name, address, and phone
• A property manager or management company — If you hire a PM, disclose their name/company and contact info
• A leasing agent — If a licensed real estate agent handles lease signings and tenant communications, they may qualify
• An office manager or designated employee — If you have staff authorized to handle maintenance requests, rent issues, and tenant communications
• A family member — If you authorize a spouse, adult child, or relative to manage the property, they count

The key word is authorized. The person must actually have the authority to:

• Receive maintenance requests and coordinate repairs
• Discuss lease violations or rent issues with tenants
• Be served legal documents (notice to quit, eviction papers, lawsuits)

You cannot list someone who has no actual authority. For example, listing your attorney as the agent when your attorney doesn’t manage day-to-day tenant issues could be problematic.

Multiple Properties or Managers?

If you own multiple properties with different managers, each lease must disclose that specific property’s manager. You cannot provide a blanket disclosure for all properties or use a general company phone line without routing information to the correct manager.

How to Provide the Disclosure

Written Methods That Satisfy ORS 90.305

The statute requires written disclosure. Here are compliant methods:

Methods That Do NOT Satisfy ORS 90.305

• Verbal disclosure only — Telling the tenant your phone number at lease signing is not sufficient
• Posted on property — A sign in the office or on a bulletin board does not meet the written notice requirement
• Included in welcome packet after move-in — Too late; disclosure must happen before or at occupancy
• Available on a website — Tenants must receive it directly, not have to hunt for it online
• Provided only if tenant requests it — The disclosure is mandatory, not optional or on-demand

What Happens If You Don’t Comply?

Statutory Damages Under ORS 90.305

Oregon law provides specific remedies for non-compliance:

If a landlord violates ORS 90.305, the tenant may recover damages equal to one month’s rent and reasonable attorney’s fees and costs, even if the tenant suffered no actual economic harm.

This is a statutory damages provision, meaning:

• No proof of harm required — The tenant doesn’t need to prove they were harmed or that your failure caused them loss
• Amount is automatic — Damages equal one month’s rent, calculated based on the actual rent paid for the property
• Attorney’s fees are included — If a tenant sues and wins, you pay not only the damages but also the tenant’s attorney fees and court costs
• Cumulative with other claims — A disclosure violation might be combined with other violations (habitability, wrongful eviction, etc.), stacking damages

Real-Dollar Examples

*Attorney fees vary by region and case complexity. These are estimates based on 2024–2026 Oregon legal market data.

How Tenants Use This Claim

In practice, ORS 90.305 violations are often discovered:

• As a counterclaim in eviction — A tenant facing eviction for non-payment counters with a disclosure violation claim, potentially defeating or delaying the eviction
• In a separate lawsuit — A tenant sues for damages after move-out or during tenancy
• Combined with habitability claims — A tenant who discovered mold or maintenance issues files a suit including both a habitability violation (ORS 90.320) and a disclosure violation
• As leverage in settlement — A tenant’s attorney uses the disclosure violation as a bargaining chip to negotiate reduced rent or repairs

Disclosure Changes: What If Your Contact Info Changes?

Do You Need to Update Tenants?

The statute requires disclosure “before or at the time the tenant is to begin occupancy.” It doesn’t explicitly require you to notify tenants of changes after the lease begins. However, Oregon courts have suggested that material changes (like changing property managers mid-lease) should be communicated in writing.

Best practice:

• If you change your phone number — Email or mail notice to all current tenants with your new number
• If you change your mailing address — Provide written notice; this is important for legal service of documents
• If you hire a new property manager — Send written notice introducing the manager and providing their contact info, so tenants know whom to call
• If you change managers mid-lease — This is strongly recommended; failing to do so can create tenant confusion and disputes about who is authorized to make decisions

A simple email or letter saying “Please note: As of [Date], your property manager is now [Name] at [Phone/Email]” takes 5 minutes and prevents months of tenant frustration.

ORS 90.305 and Mobile Home Parks

Mobile home parks in Oregon are covered by ORS 90.305, but they have an additional overlay under ORS 90.485 (park rules). A park owner or manager must disclose identity information to every resident, and the park must also maintain and post rules in a common area. If you manage a mobile home park, ensure you comply with both statutes.

Landlord Identity Disclosure Compliance Checklist

Use this checklist for each lease before signing and providing keys:

• ☐ My full legal name (or LLC/entity name) is disclosed in writing
• ☐ My mailing address is included and is a place I actually receive mail
• ☐ My working phone number is provided (not disconnected or outdated)
• ☐ If I use a property manager, their name, address, and phone are disclosed
• ☐ The disclosure is in writing (in the lease, addendum, or email before move-in)
• ☐ The disclosure was provided before or on the move-in date (not after)
• ☐ I have a copy of the disclosure in my lease file with the date it was provided
• ☐ If my contact info changed mid-lease, I notified all current tenants in writing
• ☐ If I changed property managers, I provided written notice to existing tenants

Practical Tips for Self-Managing Landlords

Keep Your Contact Information Current

The simplest way to avoid disputes is to ensure your phone and mailing address are actively monitored. If you change your number, update your lease template immediately and notify all current tenants.

Use a Dedicated Business Phone

Many self-managing landlords use their personal cell phone as the landlord contact number. This is legal and compliant, but it can create boundary issues. Consider a Google Voice number or second line to separate landlord business from personal calls. Make sure you check it regularly.

Standardize Your Disclosure Language

Create one version of the disclosure and use it on every lease. Store a template in your system (whether paper or digital). This consistency prevents omissions and ensures every tenant gets the same information.

Document Your Lease Delivery

When you hand a lease to a tenant, print a copy and have them date and initial it, or send it via email with a read receipt. This creates evidence that the disclosure was provided before occupancy.

Respond Quickly to Tenant Contacts

Disclosing your contact information is meaningless if you don’t answer. Oregon courts expect landlords to respond to reasonable inquiries within 24–48 hours. A tenant who calls repeatedly and reaches voicemail may have a legitimate complaint.

If you’re handling maintenance or tenant issues through LeaseBase’s maintenance vendor network, ensure your lease clearly explains that tenants can contact you directly or through the platform.

ORS 90.305 and Service of Legal Process

An important secondary purpose of the disclosure is to ensure tenants (and their attorneys) know where to serve legal documents on the landlord. The person disclosed must be “authorized to act as agent for service of process.”

This means:

• If a tenant sues you, they can serve papers at the address you disclosed
• If a court orders an eviction, the notice can be delivered to your disclosed agent
• If an attorney sends a demand letter, they will use the contact information from your lease

If you provide an address but never check mail there, you might miss critical legal documents. Use an address where you or your agent reliably receive mail.

Comparison: Oregon vs. Other States

Many states require landlord disclosure, but Oregon’s approach is distinctive:

Oregon’s one-month rent penalty is on the higher end, so compliance is important.

Technology and Compliance

If you use a property management platform to organize leases, maintenance, and tenant communications, ensure:

• Your lease template includes the disclosure language — Don’t rely on users to remember to add it
• The disclosure is generated with every new lease — Automation prevents accidental omissions
• Your contact information can be updated globally — If you change your phone number, update it once in the system and it applies to all future leases
• There’s a record of when the lease was signed and delivered — Timestamps prove pre-occupancy disclosure

LeaseBase’s lease operations suite includes templated compliance language and automated record-keeping, so you’re never guessing whether your disclosure was included. The compliance engine flags missing disclosures before you sign a lease.

FAQ

Q: Can I disclose my property manager’s information instead of my own?

A: Yes. The statute requires disclosure of “the person who is authorized to manage the premises.” If your property manager handles all tenant interactions, maintenance, and rent collection, disclosing them satisfies the statute. However, you should still be listed on the lease as the “Landlord” and the manager as the “Authorized Agent.” Tenants should know the chain of authority.

Q: If I update my phone number mid-lease, do I have to tell all my tenants?

A: The statute doesn’t explicitly require mid-lease notification, but Oregon courts expect you to keep your contact information current. If a tenant tries to reach the number on their lease and it’s disconnected, they have grounds for a complaint. Send written notice (email or letter) to all tenants with your new number. This also protects you if a legal document is served and someone claims they couldn’t reach you.

Q: Does ORS 90.305 apply to roommate situations where one tenant is the leaseholder?

A: ORS 90.305 applies between the landlord and every occupant who is party to the lease. If the lease is signed by one person but they have roommates, the leaseholder received the disclosure. If roommates are on the lease, they each must receive it. However, all occupants (including those not on the lease) should be able to access the disclosure posted in a common area or provided on request.

Q: What if my lease was signed verbally before I drafted a written one? Do I need to provide written disclosure later?

A: Yes, but late disclosure does not cure the violation. If the tenant has already moved in, you have technically violated ORS 90.305. However, providing written disclosure immediately (and a written lease) shows good faith and may reduce exposure if a dispute later arises. Going forward, always have a written lease before occupancy.

Q: If my property manager manages multiple properties, can they use one contact number for all of them?

A: A property manager can use a main office phone number if calls are routed to the correct person for each property. However, best practice is to provide a phone line, extension, or email specific to each property or manager so tenants reach the right person. A generic “call property management” line can cause confusion, missed maintenance requests, and tenant complaints.

Key Compliance Dates and Triggers (2026)

• Effective immediately for all new leases — ORS 90.305 has been in effect for decades and has no planned changes in 2026
• Before occupancy starts — The deadline for disclosure is the moment the tenant moves in; plan to provide it with the signed lease
• No annual renewal requirement — You don’t need to re-disclose annually, but you should update tenants if your contact info changes

Why Illinois Landlords Get This Wrong — And What It Costs

You’ve sent a notice telling a month-to-month tenant to leave. You counted 30 days. You filed for eviction. Then the judge dismisses it because your notice was defective.

This happens regularly in Illinois courtrooms, and it’s entirely preventable.

Under 735 ILCS 5/9-207, terminating a month-to-month tenancy in Illinois requires strict compliance with both notice period and termination date requirements. Small errors—serving notice on the wrong day, failing to terminate on the last day of the rental period, or using an improper delivery method—render the entire notice legally ineffective. When that happens, your tenant remains in lawful occupancy, and an eviction filing based on that defective notice gets thrown out by the court at the tenant’s first objection.

Beyond dismissal, non-compliance creates exposure: tenants and their attorneys can argue bad-faith termination, discriminatory intent, or retaliatory conduct. Illinois landlords also face penalties under the Illinois Human Rights Act (775 ILCS 5/7-101 et seq.) if the termination is motivated by protected class status.

This guide walks you through the exact requirements, timelines, and execution steps to ensure your 30-day notice is legally airtight.

The Statutory Framework: 735 ILCS 5/9-207

Illinois Compiled Statutes Section 9-207 governs termination of tenancies at will (month-to-month arrangements). The statute is brief but unforgiving:

“A tenancy at the will of the landlord for a period of less than one year shall not be terminated by the landlord except by a notice in writing, given to the tenant, which shall require the tenant to quit the premises at the end of one calendar month next ensuing the service of the notice.”

Break this down:

• “Notice in writing” — oral notice has zero legal force
• “Given to the tenant” — you must follow proper service rules (see below)
• “Quit the premises at the end of one calendar month” — the termination date must fall on the last day of a calendar month
• “Next ensuing the service of the notice” — the 30-day clock starts when service occurs, not when the tenant acknowledges it

The statute applies to:

• Month-to-month tenancies (most common)
• Tenancies for periods less than one year
• Situations where no lease specifies a different termination procedure

It does not apply to:

• Fixed-term leases (use lease expiration date instead)
• Tenancies for one year or longer (different notice rules may apply)
• Evictions for cause (non-payment, lease violation, criminal activity)

Step 1: Calculate the Correct Termination Date

This is where most landlords make mistakes.

The notice must require the tenant to quit “at the end of one calendar month” next ensuing service. This means:

• If you serve notice on August 15, 2026, the 30-day period extends through September 14, 2026
• The tenant cannot be required to vacate until September 30, 2026 (the end of that calendar month)
• If you serve notice on August 31, 2026, the termination date is September 30, 2026
• If you serve notice on September 15, 2026, the termination date is October 31, 2026

The key rule: The notice period must span at least 30 calendar days AND terminate on the last day of a calendar month.

Termination Date Quick Reference Table

Practice tip: If the tenant’s rent is due on the 1st of each month, serving notice on or before the 1st gives you the cleanest timeline. Serving on the last day of the month also works cleanly.

Step 2: Draft a Compliant Notice Document

Your notice must contain specific language to meet statutory requirements. Here’s what must appear:

Required Elements in Your Notice

• Date of service — the actual date you deliver/mail the notice
• Tenant’s full legal name(s) — as they appear in the lease
• Property address — the exact address of the unit/premises
• Specific termination date — last day of the calendar month, at least 30 days away
• Clear language that tenant must vacate — “You are required to vacate the premises on [DATE]” or similar
• Your name and contact information — where tenant should return keys/contact you
• Statement that this is a termination, not a cure opportunity — optional but protective, clarifies tenant has no right to fix anything and stay

Sample Compliant Notice Language

TO: [Tenant Full Name]
    [Property Address]
    [City, State, ZIP]

Date of Service: [Date]

NOTICE TO TERMINATE TENANCY AT WILL

Dear [Tenant Name]:

This letter is to notify you that your tenancy at the above-referenced premises is hereby terminated. You are required to vacate the premises on or before [TERMINATION DATE, last day of calendar month].

This is a notice to terminate your month-to-month tenancy under Illinois law (735 ILCS 5/9-207). This is not a notice to cure a lease violation. You have no option to remain in the premises by remedying any condition.

Please ensure the premises are clean and in good condition upon departure. All keys must be returned to [Your Name/Address]. Any property left behind will be removed at your expense.

If you have questions, contact: [Your Phone Number] or [Your Email]

Dated this [Date]

[Your Signature]
[Your Printed Name]
[Your Address]

Critical: Do not use language suggesting the tenant has a right to cure (“Fix the [issue] by [date]”). Termination for at-will tenancy is not conditional—it’s unconditional.

Step 3: Proper Service Methods Under Illinois Law

How you deliver the notice is as important as what the notice says. 735 ILCS 5/9-207 requires the notice be “given to the tenant.” Illinois case law and the Forcible Entry and Detainer Act (735 ILCS 5/9-101 et seq.) establish valid service methods.

Valid Service Methods (In Priority Order)

Recommended: Certified Mail + Email Trail

The safest approach combines methods:

1. Send via USPS certified mail, return receipt requested (get the green card back)
2. Email the same notice to tenant at email on file (if available)
3. Keep all originals: certified mail receipt, green card, email confirmation
4. Do NOT rely on email alone unless your lease explicitly permits it

This creates a paper trail that’s difficult for tenant’s attorney to challenge in court.

What Doesn’t Count as Valid Service

• Taped to door (insufficient under Illinois law)
• Text message only
• Verbal notice or conversation
• Posted to social media
• Email without explicit lease authorization
• Notice left with someone under 18 or of unclear authority

Pitfall: Many Illinois landlords assume “notice left at the property” satisfies service. It doesn’t. The tenant must receive actual notice or be served through an authorized method.

Step 4: Documentation and Record-Keeping

If your notice is challenged in court (either by tenant objection or during eviction proceedings), you must prove:

• The notice was properly drafted
• It was served on the correct date
• Service was by an approved method
• The termination date complies with 30-day requirement

Create a compliance file for each notice that includes:

• Copy of the notice with date and your signature
• USPS certified mail receipt (the white slip you get back immediately)
• Return receipt green card (when it comes back signed)
• Any emails sent (with read receipts if available)
• Calendar notation of service date and required termination date
• Dated entry in your property management system (LeaseBase or similar)

Store these documents for at least 3 years. Illinois doesn’t have a specific record retention statute for landlords, but federal tax law and potential litigation exposure require it.

What Happens If Your Notice Is Defective

Scenario 1: Notice Served on Wrong Date or with Wrong Termination Date

Outcome: Notice is void. Tenant remains in lawful occupancy. If you file for eviction, tenant’s attorney will raise the defect, and the judge will dismiss the case. You must start over with a new, properly-served notice.

Timeline setback: 30+ days (the full notice period again).

Scenario 2: Improper Service Method

Outcome: Tenant can argue they never received legal notice. In eviction court, if tenant testifies they didn’t receive the notice and you cannot produce certified mail receipt or signed acknowledgment, the judge may find service defective and dismiss.

Legal consequence: Case dismissed. Tenant stays. You pay court costs and possibly tenant’s attorney fees if they were represented.

Scenario 3: Discriminatory Termination (Protected Class)

Statute: Illinois Human Rights Act (775 ILCS 5/7-101).

Protected bases: Race, color, religion, national origin, ancestry, sex, sexual orientation, gender identity, marital status, familial status, disability, military status, unfavorable military discharge, source of income, or arrest record.

Outcome: If tenant proves termination was motivated by protected class status, you face:

• Civil rights complaint with Illinois Department of Human Rights (IDHR)
• Compensatory damages (attorney fees, court costs, emotional distress)
• Punitive damages up to $1,000 per violation
• Actual damages (unpaid rent, relocation costs)
• Injunctive relief (court order restoring tenancy)

Example: You terminate the lease of one tenant with children but renew the lease of a similar tenant without children. Tenant files IDHR complaint alleging discriminatory termination based on familial status. Burden shifts to you to prove business justification.

Scenario 4: Retaliatory Termination

Illinois Retaliatory Conduct Statute: 735 ILCS 5/9-220.

A termination is presumed retaliatory if it occurs within 6 months after the tenant:

• Filed a repair or maintenance complaint with the local housing authority
• Contacted the landlord regarding serious habitability issues
• Asserted a legal right (e.g., demanded essential services)
• Participated in a tenant organization
• Contacted law enforcement to report a crime

Outcome: If tenant proves retaliatory motive, termination is void. Tenant can remain in possession, and you may owe damages. The burden is on the landlord to prove the termination was for legitimate, non-retaliatory reasons (e.g., owner moving into the unit, significant property rehabilitation, legitimate business decision documented before tenant’s complaint).

Interaction with Lease Provisions

What If Your Lease Specifies Different Notice Requirements?

Lease terms can require more notice than 30 days, but they cannot require less. If your lease says “60 days’ notice required,” you must give 60 days. If your lease is silent, the statutory 30-day minimum applies.

Best practice: Review your lease template to ensure termination notice language is consistent with 735 ILCS 5/9-207. If your lease requires less than 30 days, it’s unenforceable, and a court will apply the statute.

What If the Lease Renews or Rolls Over After Notice?

If your notice doesn’t clearly terminate on the last day of the rental period, or if the termination date has already passed and you haven’t enforced it, courts may find the lease has renewed (auto-renewed into another month-to-month term). You cannot retroactively “fix” this. You must serve a new notice.

Example: You serve notice on August 15, 2026, stating termination “on or about September 1, 2026.” This fails the “end of calendar month” requirement. Tenant stays. On September 1, even though your notice says tenant should leave, you do nothing. Lease auto-renews for October. You now cannot claim tenant was required to leave on September 1—you’ve accepted September rent, implying renewal.

Compliance Checklist: 30-Day Notice Execution

Use this checklist before serving notice:

• Confirm tenancy is month-to-month (not fixed-term lease)
• Calculate correct termination date (at least 30 days out, ending on last day of calendar month)
• Verify no pending repair requests or habitability complaints (retaliatory conduct risk)
• Confirm termination is not based on protected class (race, disability, familial status, etc.)
• Draft notice with all required elements (date, tenant name, property address, termination date, signature)
• Review lease for any enhanced notice requirements (more than 30 days)
• Prepare certified mail with return receipt or arrange personal service
• Serve notice via one of these methods: (1) personal service with acknowledgment, (2) certified mail with green card, or (3) certified mail + email if lease permits
• Document service date, method, and all receipts
• Enter notice in property management system with termination date flagged
• Do not accept rent for the termination month (creates ambiguity about renewal)

Recent Changes and 2026 Considerations

As of August 2026, Illinois has not amended 735 ILCS 5/9-207 substantively, but landlords should track:

• Local ordinances: Chicago and other municipalities have enacted additional protections (e.g., “just cause” eviction rules). Check your city/county website for local requirements that may override state law.
• Federal law: Fair Housing Act protections and Equal Credit Opportunity Act continue to evolve in case law. Ensure your termination reasons are facially neutral and documented.
• Case law developments: Illinois courts periodically clarify service requirements and termination date calculations. Subscribe to state bar association updates or consult an attorney annually.

FAQ: Illinois 30-Day Notice to Terminate

Q1: Can I terminate a month-to-month tenancy without stating a reason?

A: Yes. Under 735 ILCS 5/9-207, Illinois law allows at-will termination of month-to-month tenancies without cause. You need not give a reason in the notice. However, the reason matters if challenged: if the tenant can prove the termination was motivated by protected class status (race, disability, familial status, etc.), it is illegal under the Fair Housing Act and the Illinois Human Rights Act, regardless of at-will status.

Q2: What if the tenant doesn’t accept the certified mail?

A: If the USPS attempts delivery and the tenant refuses or is unavailable, the USPS will attempt re-delivery and eventually return the mail to you marked “Refused” or “Attempted—Not Delivered.” This still constitutes valid service in Illinois. Save the returned envelope. You can then proceed with eviction if the tenant doesn’t vacate by the termination date. If you cannot get the tenant served via mail, you may arrange for a professional process server to perform personal service.

Q3: If I serve notice on September 15, and rent is due on the 1st of each month, when is the actual move-out date?

A: If you serve notice on September 15, 2026, the tenant must vacate on October 31, 2026. The 30-day minimum expires October 15, but the statute requires termination on the last day of a calendar month, so the required date is October 31. This means the tenant owes rent through October 31 and may occupy the property through that date.

Q4: Can I email the notice instead of mailing it?

A: Only if your lease explicitly authorizes notice by email. The statute requires the notice be “given to the tenant,” which Illinois courts interpret to mean reliable, verifiable delivery. Email alone (without lease authorization) is risky because you cannot prove actual receipt. If your lease says “notice may be served by email,” then email with read receipt is acceptable. Otherwise, use certified mail or personal service.

Q5: If I gave a defective notice and the tenant didn’t move out, can I just serve a new notice and evict?

A: Yes, but you must start the 30-day period fresh. The first notice is void and has no legal effect. Serve a new, compliant notice with the correct termination date (30+ days in the future, ending on the last day of a calendar month). Once the new termination date passes and tenant doesn’t vacate, you can file for eviction based on the second notice. Do not file eviction based on the first defective notice—it will be dismissed.

Using Technology to Stay Compliant

Managing 30-day notice deadlines manually—especially if you have multiple units—invites errors. A platform like LeaseBase Lease Operations automates notice scheduling, flags termination dates, and stores service documentation in a centralized system. You can generate compliant notice templates, log service dates, and receive alerts before deadlines pass.

For portfolio landlords managing 10+ units, portfolio management tools track lease renewal dates and send reminders when to serve termination notices, reducing the risk of accidental lease auto-renewal.

Additionally, compliance engine features can flag potential retaliatory conduct (e.g., recent repair complaints) before you serve a termination notice, protecting you from legal exposure.

When to Consult an Attorney

Self-managing landlords can handle straightforward month-to-month terminations using the framework above. However, consult a licensed Illinois real estate attorney if:

• The tenant has recently filed a repair complaint with the city (retaliatory conduct risk)
• The tenant is a member of a protected class and you’re concerned about perception of discrimination
• The lease contains unusual termination language or requires more than 30 days’ notice
• The tenant has indicated they will fight the termination
• You’re terminating multiple tenants in a building (pattern analysis for discriminatory intent)
• Your city has enacted “just cause” eviction ordinances that may override state law

An attorney typically charges $200–$400 for a lease review and notice review—a small cost relative to a dismissed eviction case or discrimination settlement.

Conclusion: Precision

What Is SB 2979 and Why It Matters Now

On June 12, 2024, Illinois Governor J.B. Pritzker signed Senate Bill 2979 into law, creating the most restrictive junk fee prohibition in the Midwest. Effective July 1, 2026, this statute fundamentally changes how Illinois landlords can structure their lease fees and upfront charges.

Unlike previous state-level fee caps (which typically limited late fees or security deposits), SB 2979 takes a categorical approach: it bans entire classes of charges the legislature deemed non-essential to landlord operations. This matters because landlords operating without updated compliance procedures will face tenant lawsuits, Department of Financial and Professional Regulation (DFPR) enforcement actions, and potential triple damages under Illinois consumer protection law.

As of August 2026, we are in the active enforcement period. Any lease signed on or after July 1, 2026, must comply immediately. Landlords managing month-to-month renewals or lease renegotiations are already subject to this law.

Which Fees Are Now Illegal Under SB 2979

SB 2979 modifies 815 ILCS 5/2-501 to explicitly prohibit landlords from charging tenants for:

Application and Screening-Related Fees

Landlords may charge an application fee, but only to recover the actual cost of obtaining a credit report and criminal background check from third-party vendors. The statute states: “an application fee may not exceed the reasonable cost incurred by the landlord in obtaining a consumer credit report or criminal background check report.”

Prohibited under this category:

• Administrative or processing fees added to application screening costs
• Non-refundable application fees that exceed vendor charges
• “Convenience fees” for online application submission
• Flat-rate application fees not tied to actual screening vendor invoices
• Duplicate screening fees if tenant resubmits application or information

If your vendor charges $35 for a credit report and $25 for a background check, your maximum application fee is $60. Any amount above that is a junk fee violation.

Move-In and Move-Out Inspection/Processing Fees

Completely prohibited. This includes:

• Move-in inspection fees (even if landlord conducts formal walkthrough with tenant)
• Move-in photographic documentation fees
• Move-out inspection or walkthrough charges
• Move-out cleaning inspection fees
• Unit preparation or turnover fees charged to incoming tenant
• “Administrative processing” fees for lease initiation

The cost of move-in and move-out inspections must be absorbed by the landlord or recovered through damage deductions from the security deposit (subject to 815 ILCS 5/2-504 security deposit return requirements).

Lease Renewal or Extension Fees

Landlords cannot charge tenants to renew or extend an existing lease agreement. Prohibited charges include:

• Flat “lease renewal fees” ($50, $100, etc.)
• Administrative fees for processing a new lease agreement
• “Renewal processing” or “re-documentation” charges
• Fees for updating lease terms or addendums

If a tenant wishes to renew their lease for an additional term, the only charges that may be imposed are increased rent (if permitted under local ordinances) and any legitimate re-screening fees (limited to actual credit/background check costs).

Holding Fees

Prohibited entirely. A “holding fee” is any charge imposed to reserve a unit pending lease execution or while an application is pending approval. This includes:

• Deposits to hold unit for prospective tenant
• “Reservation fees” pending application approval
• Charges to remove unit from active marketing

If a prospective tenant wants to hold a unit, that amount must either be credited toward the security deposit and first month’s rent at lease execution, or returned in full if lease is not executed.

Early Lease Termination Facilitation Fees

While landlords may charge early termination fees as stipulated in the lease (within reason), SB 2979 prohibits charging fees for the administrative act of processing early termination, including:

• Fees for re-leasing the unit
• Administrative charges for processing an early termination request
• “Lease break” processing fees separate from liquidated damages

However, liquidated damages for breach of lease term (actual early termination penalties) remain enforceable if they represent reasonable pre-estimate of harm and comply with Illinois common law on penalty clauses.

Rent Payment Processing Fees (With Exception)

Landlords cannot charge a general rent processing fee. However, if a tenant elects a specific payment method that incurs third-party fees (e.g., credit card payment through a processor that charges 2.5%), the landlord may pass that fee to the tenant only if:

• An alternative payment method with no fee is available (e.g., bank transfer, check, ACH)
• The fee exactly matches the third-party processor charge
• The fee is disclosed before the tenant elects that payment method

Flat rent processing fees (e.g., “$5 per rent payment”) are violations, as are fees for standard payment methods like check or ACH transfer.

Which Fees Remain Legal Under SB 2979

Not all fees are banned. Landlords may still charge the following, provided they meet statutory requirements:

Timeline: What Landlords Must Do Before July 1, 2026

Since we are now in August 2026 (the effective date has passed), compliance is immediate. However, landlords with existing leases have specific transition rules:

Leases Signed or Renewed On/After July 1, 2026

• Immediate action required: All new leases and renewals must comply with SB 2979 restrictions
• No grace period: Non-compliant clauses are void and unenforceable
• Disclosure requirement: Any permitted fees (application screening, payment processing) must be itemized and disclosed in lease or separate fee addendum

Existing Leases (Signed Before July 1, 2026)

• Grandfathered status through lease term: Prohibited fees in existing leases are technically unenforceable as of July 1, but tenants may not have immediate cause to challenge them if charges have not yet been collected
• Upon lease renewal: All renewal leases must be compliant
• Practical guidance: Landlords should proactively notify tenants that fee structures will change at lease renewal to avoid disputes

Penalties and Enforcement for SB 2979 Violations

Tenant Private Right of Action

815 ILCS 5/2-501 creates a private right of action for tenants. Enforcement is NOT limited to government agencies. A tenant may:

• Sue in small claims court (up to $10,000) without attorney requirement
• Recover the prohibited fee charged plus court costs and filing fees
• Claim violation of Illinois Consumer Fraud Act (815 ILCS 505/2), enabling recovery of treble damages (3x the prohibited fee amount) if violation is deemed “deceptive” or “unfair”

Example: If a landlord charged a $200 move-in inspection fee, a tenant could recover:

• Base violation: $200 (the prohibited fee)
• Under Consumer Fraud Act: up to $600 (treble damages)
• Plus attorney fees (if claim proceeds beyond small claims)
• Plus court costs

Government Enforcement

Illinois Department of Financial and Professional Regulation (DFPR) and county State’s Attorney offices can pursue violations under consumer protection statutes. Penalties include:

• Up to $500 per violation
• Mandatory restitution to affected tenants
• Civil penalties and injunctions
• Potential criminal charges if pattern of fraud is established (815 ILCS 505/7)

Practical Consequence: Lease Enforceability

Any lease clause attempting to charge a prohibited fee is void and unenforceable. A tenant can:

• Refuse to pay a prohibited fee
• Deduct the fee from rent (though this creates other compliance issues)
• Use the fee violation as a defense in an eviction proceeding (claiming retaliatory intent if landlord attempts to evict for non-payment after fee refusal)
• Sue for return of fees already paid

How to Audit Your Current Leases and Fees for Compliance

Step 1: Review All Lease Addendums and Fee Schedules

Pull every version of your lease template currently in use, including:

• Main lease agreement
• Pet addendums
• Separate fee schedules or disclosures
• Move-in/move-out inspection forms
• Application materials
• Parking or utility addendums

Search for language including “fee,” “charge,” “cost,” “deposit” (if not security deposit), and “processing.”

Step 2: Flag Potentially Non-Compliant Language

Create a spreadsheet with these columns:

Step 3: Update All Lease Templates

For any lease signed or renewed on or after July 1, 2026, remove all non-compliant fee language. Replace with compliant alternatives:

Non-compliant version:

“Application Fee: $100 (non-refundable)”

Compliant version:

“Application Fee: Tenant agrees to reimburse Landlord for the actual cost of obtaining a consumer credit report and criminal background check, not to exceed $[actual vendor cost]. Landlord will provide itemized receipt. [REMOVE ANY ADMINISTRATIVE OR PROCESSING FEE COMPONENT].”

Non-compliant version:

“Move-In Inspection Fee: $75. This fee covers Landlord’s cost to photograph unit condition and document existing damage.”

Compliant version:

“[REMOVE THIS CLAUSE ENTIRELY. Move-in inspection is a landlord obligation. Cost is recovered through damage deductions from security deposit if applicable.]”

Step 4: Notify Current Tenants (Discretionary, but Recommended)

For tenants with leases signed before July 1, 2026, consider sending a notice:

“Effective July 1, 2026, under Illinois SB 2979, certain fees previously permitted are no longer allowed. If you are charged any of the following fees in the future, they are invalid and unenforceable: [list]. Upon lease renewal, your lease will reflect these changes. We have removed these fees from our lease template. For questions, contact [contact info].”

This reduces tenant litigation risk and demonstrates good faith compliance.

Step 5: Train Your Team (If Applicable)

If you use property management software, work with your vendor to update:

• Lease templates in your system
• Automated fee collection rules
• Application processing workflows (to ensure fees charged reflect actual vendor costs, not flat rates)

LeaseBase’s compliance engine automatically flags leases with prohibited clauses and surfaces necessary updates before lease execution. Lease operations features ensure that only permissible fees are charged and documented correctly.

Common Compliance Mistakes to Avoid

Mistake 1: Bundling Junk Fees Into a Single “Administrative Fee”

Some landlords attempt to circumvent SB 2979 by renaming prohibited charges as a single “administrative fee” or “lease processing fee.” This does not work. The statute prohibits the underlying categories of fees, regardless of what they’re called. If a fee compensates the landlord for non-essential services (e.g., handling paperwork, inspections, renewals), it’s prohibited.

Mistake 2: Charging Application Fees Without Vendor Documentation

Landlords must retain receipts or vendor invoices proving that application fees match actual credit report and background check costs. Charging a $100 flat application fee without vendor documentation is a violation, even if vendor costs are sometimes $100. You must verify costs on a per-application basis or use average documented costs.

Mistake 3: Hiding Prohibited Fees in Lease “Disclosures”

Disclosing prohibited fees does not make them legal. Even if a lease states, “Tenant agrees to the following prohibited fees,” the clause remains unenforceable.

Mistake 4: Allowing Property Management Companies to Charge Junk Fees on Your Behalf

If you hire a property manager or use a platform that charges fees to tenants on your behalf, you remain liable for SB 2979 violations. Ensure your property management agreement explicitly prohibits junk fees and that all charges comply with Illinois law.

Mistake 5: Enforcing Old Lease Clauses on New Lease Terms

Even if your old lease (signed before July 1, 2026) contained a prohibited fee, you cannot enforce it against a tenant in a new lease term or renewal. Transition proactively to compliant language.

Frequently Asked Questions About SB 2979

Q: Can I charge a “documentation fee” for preparing and printing the lease agreement?

A: No. This is a prohibited administrative/processing fee. The cost of creating lease documents is a landlord business expense, not a tenant cost. You cannot charge tenants for preparing their lease.

Q: What if a tenant requests an expedited background check that costs more than a standard check?

A: You may charge the actual difference in vendor cost for expedited service only if the tenant requests it and you disclose the cost before charging. However, “expedited fee” cannot be a markup; it must reflect the actual additional vendor charge. The statute requires you to pass through “reasonable costs incurred,” not markup or convenience charges.

Q: Can I charge a fee to process an early lease termination if the tenant initiates it?

A: No. SB 2979 prohibits fees for processing early termination. However, you may include an early termination clause in the lease that imposes liquidated damages (a penalty fee) if the tenant breaks the lease early. The key distinction: a termination fee for violating lease terms is allowed; an administrative fee for paperwork is not.

Q: My lease has a “non-refundable application fee.” Is this still legal?

A: Only if the fee is limited to actual credit and background check costs. If any portion is non-refundable administrative fee, it’s prohibited. If vendor costs are $50 total, your fee must be $50 (refundable if application is rejected, or creditable toward rent if tenant is approved).

Q: Can I charge a separate fee for processing online rental applications versus in-person applications?

A: No. SB 2979 doesn’t allow a “convenience fee” or platform fee for online submission. If you charge for processing method, it violates the statute. Offer online applications at no additional cost, or charge only actual vendor screening costs regardless of submission method.

Q: What about holding a unit for a tenant pending lease approval—can I charge for that?

A: Holding fees are explicitly prohibited. If a prospective tenant wants to hold a unit while their application is reviewed, any payment must either (a) be credited toward the security deposit and first month’s rent if lease is executed, or (b) be refunded in full if lease is not executed. You cannot keep a “holding fee.”

Staying Compliant: Documentation and Record-Keeping

Protect yourself by maintaining clear records of all fees charged and their justification:

• Application fees: Keep vendor invoices for credit reports and background checks. Document that fees charged to tenants match invoiced amounts. Use these records to defend against complaints.
• Late fees: Maintain lease copies showing the late fee clause (compliant with 815 ILCS 5/2-502). Document each instance a late fee is assessed, including date and amount of rent paid late.
• NSF fees: Retain bank statements or canceled check images showing that a check was returned. Keep evidence of bank fees charged to you (typically $15-$35) to support NSF fees you charge tenants.
• Lease compliance: For every lease signed after July 1, 2026, maintain a copy in your records with the effective date clearly marked. This proves compliance during the effective period.

If a tenant sues for junk fees or a government agency investigates, your documentation will either protect you (if compliant) or become evidence against you (if not). Document thoroughly.

Leveraging Compliance Software to Prevent Violations

Manual compliance audits are error-prone and time-consuming. Consider using a platform that enforces compliance rules:

• Compliance engine: Automatically reviews all lease clauses before execution and flags non-compliant language based on current Illinois law, including SB 2979 restrictions.
• Lease operations: Manages lease renewals and automatically applies compliant templates to new terms, preventing unintentional violations when renewing existing tenants.
• Rent payments: Processes rent and late fees with built-in compliance rules, ensuring only permissible fees are charged and only when lease-compliant circumstances exist.
• Portfolio management: Tracks lease versions and effective dates across your portfolio, ensuring you know which leases are subject to SB 2979 and which are grandfathered.

Landlords managing 2-75 units often lack the resources of large property management companies, but they face the same legal liability. Compliance automation removes the guesswork.

Final Takeaway: Compliance Is Your Defense

SB 2979 is now in active enforcement. As of August 2026, any lease signed or renewed must comply. Violations expose you to treble damages under Illinois Consumer Fraud Act, private tenant lawsuits in small claims court, and government enforcement actions.

The solution is straightforward: audit your current lease templates, remove prohibited fee clauses, document legitimate fees with vendor receipts, and implement processes that prevent future violations. Proactive compliance costs far less than defending lawsuits or paying damages.

If you manage a portfolio of leases, prioritize updating templates immediately for all new leases and renewals. For existing leases signed before the effective date, plan a transition strategy to compliant fee structures at next renewal.

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Disclaimer

This article is for informational purposes only and does not constitute legal advice. Consult a qualified Illinois attorney for guidance specific to your situation, leases, or circumstances. Compliance with SB 2979 depends on individualized facts; this content provides general guidance based on statute language and does not address all potential scenarios or local ordinance interactions.