Illinois Junk Fee Ban (SB 2979) — What Landlords Must Stop Charging by July 2026

What Changed: Illinois Junk Fee Ban Overview

On June 4, 2024, Illinois Governor J.B. Pritzker signed Senate Bill 2979 into law, making Illinois the second state after California to broadly prohibit "junk fees" in residential leasing. Effective July 1, 2026, landlords and property managers can no longer charge tenants for administrative, processing, or routine operational services that lack a direct, quantifiable cost or that represent standard business expenses.

This is not a minor technicality. For self-managing landlords accustomed to recovering small administrative costs through application fees, lease amendment processing charges, or move-in inspection fees, SB 2979 eliminates an entire revenue stream. The law applies statewide to all residential tenancies, regardless of unit count—meaning even mom-and-pop landlords with 2–3 units are in scope.

The statute also gives tenants a private right of action, meaning your tenant's attorney (or a tenants' rights organization) can sue you directly for damages without waiting for Attorney General enforcement. This creates dual enforcement: both government and tenant-initiated litigation.

The Statute: SB 2979 Text and Scope

SB 2979 amends the Illinois Residential Tenants' Rights Act (765 ILCS 710/0.01 et seq.) by adding Section 4-103.1, titled "Prohibition on Charging Junk Fees." The operative language is deliberately broad:

"A landlord shall not charge a tenant any fee, charge, or cost that is not directly related to a specific, quantifiable service or facility provided to the tenant. A landlord may not impose fees for processing, administrative, or other costs that are customarily included in the rent or constitute ordinary business expenses."

Key operative elements:

• Direct relation requirement: The fee must be tied to a specific, quantifiable service. Vague administrative recovery does not qualify.
• No processing/administrative pass-through: Costs you incur processing applications, preparing leases, or managing tenant communications cannot be charged separately.
• Ordinary business expense bar: If a cost is typically incurred in managing any rental property, it's an ordinary business expense and cannot be charged to tenants.
• Effective date: July 1, 2026. Leases executed before this date with junk fees remain lawful under the prior agreement, but landlords cannot enforce collection of junk fees accrued after July 1, 2026, and must disclose the change in writing upon lease renewal.

Prohibited Fees Under SB 2979

Illinois provides no official regulatory guidance yet (the Illinois Department of Housing & Community Development has not issued formal rulemaking), so compliance relies on statutory language and case law principles from California's similar SB 611 prohibition. The following fees are prohibited effective July 1, 2026:

Application Processing Fees

Application review, background check coordination, and credit check ordering cannot be charged to tenants. While credit bureaus and screening vendors charge landlords for reports, passing this cost to applicants is prohibited. The applicant has no choice whether to incur the cost and receives no direct service benefit—the screening is entirely for the landlord's underwriting decision.

Prohibited examples:

• $50 application fee
• $75 screening/background check fee
• $25 administrative review fee

Allowed alternative: Do not charge applicants. Screen tenants at your cost as an ordinary business expense. (This is the practical reality post-SB 2979.)

Lease Amendment and Modification Fees

Charging tenants to process lease amendments, early lease termination requests, or consent-to-assignment forms is prohibited. The landlord incurs minimal actual cost (printing, email communication), and the service is administrative overhead.

Prohibited examples:

• $150 lease amendment processing fee
• $100 early termination request fee
• $75 sublet/assignment approval fee

Move-In Inspection and Photo Documentation Fees

While landlords can require tenants to participate in move-in inspections (and should, to document pre-existing conditions), charging a fee for this inspection is prohibited. The inspection protects both parties and is a routine property management duty. Some landlords charge $50–$100 for "professional" photo documentation; this is prohibited under SB 2979 because photography is standard property management practice.

Prohibited examples:

• $100 move-in inspection fee
• $75 professional photo documentation fee
• $50 condition report preparation fee

Utility Setup and Coordination Fees

Charging tenants for facilitating utility transfers, coordinating with utility companies, or providing utility setup instructions is prohibited. While the landlord may incur time, this is ordinary business administration.

Prohibited examples:

• $50 utility setup coordination fee
• $25 utility transfer processing fee
• $35 internet/cable setup assistance fee

Lease Renewal/Extension Fees

Administrative costs of renewing a lease or preparing new lease documents cannot be charged as separate fees. The renewal is part of ongoing property management.

Prohibited examples:

• $75 lease renewal processing fee
• $50 lease extension fee

Returned Check/NSF Processing (Partial Prohibition)

NSF fees are still permitted under Illinois law (generally capped at the NSF charge the bank imposes plus reasonable processing cost, typically $25–$35), but only for actual returned checks—not for convenience fees or third-party payment processing charges disguised as NSF fees. Charging an NSF fee on a legitimate ACH or credit card payment that does not bounce is prohibited.

Parking, Keys, and Mailbox Replacement Fees (Context-Dependent)

These are contextually permitted only if:

• The charge represents actual, direct replacement cost (e.g., $15 for a lost key if the tenant's lease requires them to return keys and they don't)
• The charge is disclosed in the lease as a conditional fee, not a routine administrative charge
• The cost is reasonable and tied to actual damage/loss by the tenant, not a flat processing fee

Charging a flat $50 "mailbox replacement fee" upon move-out for routine wear and tear is prohibited. Charging $30 to replace a lock core that a tenant damaged or lost the key to may be permitted if the lease specifies this and the cost is actual replacement.

Fees That Remain Lawful Under SB 2979

The following charges are NOT prohibited by SB 2979, provided they comply with prior Illinois law:

Fee Type	Permitted Amount (IL Law)	Conditions
Rent	As agreed in lease	Must be clearly stated; subject to any local rent control (rare in IL)
Security Deposit	Up to one month's rent	Per 765 ILCS 710/1.4; must be held in trust account; returned within 45 days with itemized deductions
Pet Deposit	Up to one month's rent	Treated as security deposit; refundable only for actual pet damage
Pet Fee (Non-Refundable)	Reasonable amount (no statutory cap)	Must be disclosed in lease; covers ongoing pet policy administration
Late Rent Fee	5% of monthly rent	Per 765 ILCS 710/1.5; only if rent is 5+ days late; lease must disclose
NSF/Returned Check Fee	Bank's NSF charge + reasonable processing (typically $25–$35)	Only for actually returned checks; lease must disclose
Actual Damage/Loss Replacement	Actual cost of replacement (e.g., lock rekeying)	Must be directly caused by tenant; documented with receipts; lease should disclose policy
Utilities (If Tenant-Paid)	Actual utility cost	Per lease agreement; landlord cannot mark up or add processing fee

Penalties for Violations

SB 2979 creates significant financial exposure. Violations are enforced in two ways:

Attorney General Enforcement

The Illinois Attorney General's Consumer Fraud Act provides for civil penalties of up to $1,000 per violation. The statute defines each charge to each tenant as a separate violation. A landlord charging 10 tenants a $50 application fee faces potential penalties of $10,000 (10 violations × $1,000 max). Additionally:

• Attorney General can seek injunctive relief (cease and desist orders)
• Attorney General can recover costs of investigation and litigation
• Violations are reported to the Illinois Secretary of State and may affect license status for property managers

Private Right of Action

Individual tenants or tenant advocacy groups can sue landlords directly for:

• Actual damages: Refund of junk fees charged, plus interest
• Statutory damages: $500–$1,000 per violation (tenant's choice of remedy)
• Attorney fees and court costs: Landlord pays tenant's legal fees if tenant prevails
• Class action exposure: Multiple tenants can band together; one tenant's attorney fee award covers the entire class

A single landlord charging 20 tenants a $75 lease amendment fee over two years could face $20,000–$40,000 in statutory damages plus attorney fees ($5,000–$15,000) and refunds ($1,500). Attorney fees are the real threat: tenants' rights organizations routinely take these cases on contingency.

Other Consequences

• Eviction court counterclaims: If you file for eviction and the tenant owes little or nothing in back rent, but you charged junk fees, the tenant countersues and may offset your judgment
• Rental history damage: Violations noted in screening reports and rental history databases
• Local enforcement: Some Illinois municipalities (e.g., Chicago) may add local penalties or license suspension

Timeline: What You Must Do Before July 1, 2026

As of October 2026, we are three months past the effective date. If you have not yet audited and reformed your fee practices, you are likely in violation and accruing liability. Here is the compliance roadmap:

Immediate Actions (October–December 2026)

1. Audit All Current Lease Documents

• Review every lease template, addendum, and rider you use or have used since January 2024
• Flag any fee language: application fees, processing charges, move-in fees, utility coordination, lease amendment charges, renewal fees
• Document what you've charged tenants for these fees over the past 24 months (this determines liability exposure)

2. Cease Collection of Junk Fees Immediately

• Stop collecting any junk fees effective immediately, even if tenant leases pre-date July 1, 2026
• Do not attempt to collect outstanding balances from previous tenants for junk fees
• Refund any junk fees collected between July 1 and October 2026 voluntarily (demonstrates good faith to Attorney General and mitigates class action exposure)

3. Revise All Lease Templates

• Remove all junk fee language from master lease templates
• Update application documents to clarify: "No application fee will be charged"
• If you conduct background checks, disclose that the cost is borne by the landlord
• Have an attorney review revised templates (LeaseBase lease operations tools include templates, but always verify compliance)

4. Notify All Current Tenants in Writing

• Send written notice to all tenants currently subject to junk fees (even if their lease pre-dates July 1)
• Clearly state that as of July 1, 2026, junk fees are no longer required and no further such fees will be collected
• Offer proactive refunds of junk fees collected since July 1, 2026
• Keep copies of these notices (evidence of compliance for your defense if sued)

Ongoing Compliance (2026 Forward)

Lease Renewal Disclosures

When renewing leases with tenants, include explicit language: "Effective July 1, 2026, Illinois law prohibits the following charges that may have appeared on prior leases: [list any fees previously charged]. These fees will not be imposed under this renewed lease."

Payment Processing Systems

If you use third-party payment processors (Stripe, PayPal, Venmo, property management software), verify that they are not charging "convenience fees" to tenants on your behalf. Some processors embed automatic surcharges. Illinois law does not permit these surcharges to be passed to tenants.

Application Form Reform

Revise all application forms to include:

• "Application Submitted Without Fee" checkbox or confirmation
• Disclosure: "Screening costs are borne by the landlord. No fee is charged to applicants."
• Remove all fee disclosures, consent-to-fee language, or payment instructions for application processing

Practical Compliance Checklist for Self-Managing Landlords

By December 31, 2026:

• ☐ Review all leases executed or renewed since January 1, 2024
• ☐ List all junk fees charged (amount, dates, number of tenants affected)
• ☐ Calculate total potential liability (fees × number of tenants × penalty range)
• ☐ Revise master lease template; remove all junk fee language
• ☐ Revise application form; remove all fee language
• ☐ Update lease amendment, renewal, and modification procedures to cost-free processes
• ☐ Send written notice to all current tenants explaining SB 2979 and confirming cessation of junk fees
• ☐ Process refunds for junk fees collected between July 1 and October 2026 (voluntary compliance)
• ☐ Train yourself (or property manager) on prohibited vs. permitted fees
• ☐ Document all compliance efforts (notices, lease revisions, refunds) in a compliance folder
• ☐ Set calendar reminders to review fee structure annually

How SB 2979 Differs from California's SB 611

Illinois adopted similar junk fee prohibitions to California's SB 611 (effective January 1, 2022), but with key differences:

Aspect	California SB 611	Illinois SB 2979
Effective Date	January 1, 2022	July 1, 2026
Application Fees	Prohibited	Prohibited
Late Fees Capped	5–10% of rent (varies by jurisdiction)	5% of monthly rent (statewide)
Private Right of Action	Yes; $500–$1,000 per violation	Yes; $500–$1,000 per violation
Attorney Fees	Prevailing tenant recovers	Prevailing tenant recovers
Local Variations	Local ordinances add stricter rules	Statewide; limited local variation

Illinois's later effective date (July 1, 2026 vs. January 1, 2022) gave landlords four additional years to comply, but also created a window of uncertainty. Landlords cannot look to four years of California case law to interpret the Illinois statute exactly; however, California's holdings on what constitutes a "junk fee" (e.g., *Schmitz v. Smentowski*, 2024) provide persuasive authority in Illinois courts.

Interaction with Other Illinois Landlord-Tenant Laws

SB 2979 does not replace or supersede other fee restrictions in Illinois law. Compliance requires knowledge of overlapping rules:

Security Deposit Law (765 ILCS 710/1.4)

Security deposits remain capped at one month's rent statewide. Charging a "cleaning deposit" or "damage fee" as a separate charge (not deducted from security deposit) is both a junk fee violation and a security deposit law violation. Return deadlines and itemization requirements remain unchanged.

Late Fee Limits (765 ILCS 710/1.5)

Late fees remain capped at 5% of monthly rent and may only be imposed if rent is 5 or more days late. SB 2979 does not increase this cap. Charging a $50 "late processing fee" in addition to the 5% late fee is prohibited under SB 2979.

Habitability Standards (765 ILCS 710/1.1)

Landlords cannot charge fees to provide required habitability services (heat, water, structural integrity). Any fee disguised as reimbursement for habitability maintenance is prohibited. For example, charging a tenant $100 for mold remediation as a "facility charge" violates both habitability law and SB 2979.

Attorney Fees in Eviction (735 ILCS 5/9-209)

Illinois allows attorney fees in eviction cases only if the lease explicitly authorizes them. Charging a tenant an "attorney fee" for processing an eviction notice before judgment is a junk fee. Only court-awarded attorney fees post-judgment are permitted.

FAQ: Illinois Junk Fee Ban (SB 2979)

Q1: Does SB 2979 Apply to Leases Signed Before July 1, 2026?

A: Yes and no. Leases signed before July 1, 2026, that include junk fees are enforceable under their original terms until the lease expires or renews. However, landlords cannot collect junk fees that accrue after July 1, 2026, even under pre-existing leases. For example, if a tenant's lease signed in 2024 includes a $75 "lease renewal fee" and the lease renews on August 1, 2026, you cannot charge that fee for the 2026–2027 renewal term. At renewal, you must disclose in writing that the renewal fee is no longer permitted under SB 2979. Failure to disclose this change creates liability for attempting to collect a prohibited fee.

Q2: Can I Charge a Flat "Administrative Fee" Instead of Listing Specific Junk Fees?

A: No. Relabeling junk fees as an "administrative fee," "processing charge," "property management fee," or "facility charge" does not circumvent SB 2979. The statute prohibits any charge that is not directly related to a specific, quantifiable service. A catch-all $50 "administrative fee" charged to all tenants would be prohibited. Bundling junk fees into rent or a general charge does not cure the violation either; the substance of the charge is what matters, not the label.

Q3: What If a Tenant Agrees to Pay a Junk Fee? Is It Still Illegal?

A: Yes, the fee remains illegal and unenforceable. SB 2979 uses mandatory language ("a landlord shall not charge") that does not permit waiver or tenant consent. Even if a tenant affirmatively agrees in writing to pay an application fee, the charge is prohibited and the tenant can sue to recover it. Additionally, accepting tenant consent to an illegal charge may increase penalties because it demonstrates knowing violation. Do not rely on tenant consent as a compliance defense.

Q4: Does SB 2979 Prevent Me from Requiring a Credit Check or Background Check?

A: SB 2979 does not prohibit credit checks or background checks themselves. It only prohibits charging the tenant for the cost of running these checks. You, the landlord, must absorb the cost of screening ($25–$75 per report, depending on the vendor). This is a significant shift for self-managing landlords used to pass-through models. Many landlords respond by narrowing the pool of applicants they accept or by adjusting rent to account for screening costs. You may still require tenants to authorize you to pull reports (signed consent form), but you cannot charge them for the reports.

Q5: If I Refund a Junk Fee Voluntarily, Does That Prevent a Lawsuit?

A: Voluntary refunds after July 1, 2026, are a form of remediation but do not provide a complete legal defense. If you refunded 10 tenants their junk fees in September 2026 but did not notify them in writing or offer refunds on a timely basis, a tenant could still argue that your initial collection was unlawful and that your later refund does not offset statutory penalties and attorney fees. However, proactive refunds and written notices do demonstrate good faith and may reduce penalties in settlement negotiations or reduce the likelihood of class action formation. The best practice is to combine refunds with written explanation and to stop collection immediately upon effective date.

Compliance Tools and Resources for Landlords

Self-managing landlords have limited free resources for SB 2979 compliance. Consider:

• Illinois Attorney General Consumer Fraud Division: www.cyberdriveillinois.com — publishes enforcement guidance and accepts complaints; contact for specific interpretations (response times vary)
• Apartment Association of Illinois: www.aail.org — advocacy and guidance for landlords; membership includes legal updates
• Tenant advocacy organizations: Illinois PIRG, Housing Action Illinois — publish guides explaining tenant rights; review these to understand enforcement priorities
• Lease management software: LeaseBase lease operations and compliance tools include templates updated for SB 2979; verify before use
• Property management attorney consultation: A one-hour consultation with a local landlord-tenant attorney ($200–$400) to review your specific lease language and refund obligations is cost-effective insurance against $10,000+ in liability

Do not rely on software templates or outdated lease language. Many online legal document providers have not yet updated templates for SB 2979 as of October 2026. Verify any template against the statute before use.