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

What Is SB 2979 and Why Does It Matter to Illinois Landlords?

On August 9, 2024, Illinois Governor J.B. Pritzker signed Senate Bill 2979 into law, establishing the state’s first comprehensive ban on residential “junk fees.” The law takes effect July 1, 2026—meaning you have less than one year to audit your lease agreements, rental application processes, and fee schedules.

This is not a gray area. SB 2979 is enforceable through private lawsuits, state attorney general actions, and administrative complaints. Violations expose landlords to statutory damages, attorney’s fees, and potential class action liability, particularly for landlords managing multiple units who systematized prohibited fee collection.

The statute addresses a documented problem: residential landlords in Illinois charging tenants for services that should be part of standard housing provision or that duplicate rent collection costs. Unlike California’s broader junk fee prohibitions (which LeaseBase covered in our Illinois landlord-tenant law resource center), SB 2979 takes a focused approach—targeting specific fee categories rather than creating an open-ended “reasonableness” standard.

SB 2979 Text: The Specific Fee Prohibitions

The statute prohibits landlords from charging tenants the following fees:

Prohibited Fee Category	Specific Examples	Statute Reference
Application Processing Fee	Credit check, background screening, administrative review of application materials	SB 2979 § 1
Lease Renewal Fee	Charge for extending lease term, processing renewal paperwork, administrative review	SB 2979 § 1
Document Preparation or Delivery Fee	Lease document drafting, certification, electronic delivery, courier service, faxing	SB 2979 § 1
Move-In Inspection Fee	Charge for conducting or documenting initial unit condition inspection	SB 2979 § 1
Tenant Portal or Online Payment Access Fee	Charge for online rent payment system, tenant communication platform, document storage access	SB 2979 § 1
Administrative or Miscellaneous Fees	Lease modification fee, account maintenance fee, file transfer fee, returned check fee (if landlord absorbs cost)	SB 2979 § 1

Critical distinction: The statute does not prohibit all fees. It prohibits fees for services that are either (1) incidental to normal rental operations, (2) duplicative of rent collection, or (3) unreasonably imposed as separate charges when they should be rolled into rent or standard lease administration.

What Fees May Still Be Permissible Under SB 2979?

Not all residential housing fees are banned. SB 2979 preserves landlord rights to charge for genuine, third-party services or tenant-requested amenities, provided three conditions are met:

1. The Fee Must Reflect Actual, Reasonable Costs

If you hire a licensed inspector to conduct a move-in inspection on behalf of a tenant, you may recover that cost—but only if:

• The tenant requested or agreed to the inspection in writing before the charge was incurred
• The fee amount matches the actual third-party cost (not a markup)
• The service is truly optional, not a condition of tenancy

2. Disclosed in Writing Before Lease Execution

Any permissible fee must be:

• Stated separately in the lease or rental agreement
• Accompanied by a plain-language explanation of what service it covers
• Presented to the tenant at least 3 business days before the lease is signed (recommended best practice; statute does not specify a deadline, but clear prior notice protects against litigation)

3. Applied Uniformly and Without Coercion

Fees must not be used as a hidden condition of lease approval or as punishment for exercise of tenant rights (e.g., “If you request repairs, we charge a $75 administrative fee”). This would violate both SB 2979 and potentially Illinois’ Residential Tenants’ Rights Act (765 ILCS 742).

Examples of potentially permissible fees (with caveats):

• Pet deposit or pet rent — still allowed, but must be disclosed and reasonable
• Parking fee — permissible if tenant elected parking as optional amenity
• Utility reimbursement for common area electricity — permissible if actual cost-based and disclosed
• Third-party credit report cost — permissible only if tenant approved the report and fee reflects actual cost (not profit margin)

Penalties and Liability for SB 2979 Violations

Statutory Damages

SB 2979 establishes a tiered penalty structure:

• $500 to $2,000 per violation per tenant (civil action or attorney general enforcement)
• Each prohibited charge = one violation (so if you charged a $50 application fee and a $75 renewal fee to 10 tenants, that’s 20 violations = potentially $10,000–$40,000 in damages)

Attorney’s Fees and Court Costs

The prevailing party in a SB 2979 lawsuit—tenant or landlord—can recover attorney’s fees and legal costs. This creates significant class action risk for landlords with systematized junk fee collection (e.g., all 30 tenants in a building charged the same prohibited fee).

Administrative Enforcement

The Illinois Attorney General (Consumer Fraud Bureau) can investigate and prosecute violations as consumer fraud under the Illinois Consumer Fraud Act (815 ILCS 505), which carries additional civil and criminal penalties.

No Criminal Penalty (Currently)

SB 2979 does not impose criminal charges for violations. However, repeated or egregious violations could expose a landlord to state licensing or housing authority complaints.

Example Liability Scenario: A 15-unit building collects a $35 “administrative review fee” from all new applicants. Over 3 years, 45 tenants pay this fee. When one tenant discovers the violation, she files a class action with 40 other affected tenants. Statutory damages: 40 tenants × $500 (minimum) = $20,000, plus attorney’s fees (likely $15,000–$50,000). Total exposure: $35,000–$70,000.

Effective Date and Transition Timeline

Date / Milestone	Action Required	Consequence of Non-Compliance
August 2024	SB 2979 signed into law; compliance period begins	No immediate enforcement, but notice requirement triggered
January–June 2026	Audit all leases and fee schedules; notify current tenants of prohibited fees being eliminated	Tenants can file complaints; class action timeline begins
July 1, 2026	Law is fully effective; no new prohibited fees may be charged	Violations trigger statutory damages, attorney’s fees, AG enforcement
July 2026–Present (August 2026)	All new and renewed leases must comply; existing leases remain in effect but new charges prohibited	Ongoing enforcement; statute of limitations tolls at tenant’s discovery of violation

Step-by-Step Compliance Checklist for Self-Managing Landlords

Phase 1: Audit (Complete by February 2026)

□ Review all current lease templates

• Identify every line item labeled “fee,” “charge,” or “cost”
• Cross-reference against SB 2979 prohibited list
• Flag any “administrative,” “processing,” “renewal,” or “portal” fees

□ Audit your rental application process

• Check if you charge an application fee; if yes, confirm it reflects actual third-party screening costs only
• Review application documents for any language about non-refundable fees
• Verify tenant acknowledgment of fees in writing

□ Review move-in procedures

• Check if you charge for move-in inspections or unit photography
• If yes, verify this fee was disclosed in the lease and is cost-based
• Consider eliminating entirely if lease already requires tenant cooperation with inspections

□ Examine your payment and communication systems

• Do you charge for tenant portal access, online rent payment, or lease delivery?
• If yes, these are prohibited; eliminate charges immediately

Phase 2: Notification (February–May 2026)

□ Draft a compliant fee elimination notice

• List each prohibited fee being removed, effective July 1, 2026
• Specify the dollar amount or percentage decrease in rent (if applicable)
• Provide clear language: “This fee is prohibited under Illinois SB 2979 and will no longer be charged.”

□ Deliver written notice to all current tenants

• Send via email, certified mail, or hand-delivery (maintain proof of receipt)
• Send at least 60 days before July 1, 2026
• Recommended: 90 days prior (May 1, 2026 at latest)

□ Update lease renewal documents

• Remove all prohibited fees from renewal lease templates
• If lease renewal currently included a renewal fee, eliminate it
• Effective date for new/renewed leases: July 1, 2026

Phase 3: Implementation (June 2026 onward)

□ Update all templates and processes

• Rental application form: remove application fee section or mark as $0
• Lease agreement: remove all fee references except permissible, cost-based fees with full disclosure
• Payment portal: confirm tenants are not charged access fees
• Renewal procedures: confirm you are not charging renewal fees

□ Train yourself and any property management staff

• Ensure no one is collecting prohibited fees after July 1, 2026
• Maintain audit trail if you use property management software (LeaseBase compliance tools can flag prohibited fee language)

□ Document compliance efforts

• Keep copies of all tenant notifications, updated leases, and fee schedules
• Maintain records showing you eliminated prohibited fees before July 1, 2026
• If you receive complaints, you’ll need to demonstrate good-faith compliance

Frequently Asked Questions About SB 2979

Q1: Can I charge for credit checks or background screening?

A: Only if the fee reflects the actual, reasonable cost of the third-party service (e.g., $20 for a credit report from Experian). You cannot charge a markup or administrative fee on top of this cost. The tenant must consent to the screening and fee in writing before you incur the cost. If you absorb the cost of screening (as many landlords do), you cannot pass it to the tenant.

Q2: Is pet rent still allowed?

A: Yes. Pet rent (monthly charge for pets) and pet deposits are not prohibited by SB 2979. They are considered optional amenities, not “junk fees.” However, pet fees must still comply with general Illinois lease law: they must be disclosed in the lease, be reasonable in amount, and not be used punitively.

Q3: What if I already collected a prohibited fee from a tenant in 2025?

A: You may face liability retroactively. SB 2979 does not explicitly state whether the law applies only to fees collected after July 1, 2026, or to all fees collected after the law was signed (August 2024). Best practice: If you collected prohibited fees in 2025, voluntarily refund them before July 1, 2026, and notify the tenant of the refund in writing. This demonstrates good faith and may limit damages exposure if the tenant was aware of the fee.

Q4: Can I increase rent to offset the elimination of junk fees?

A: You can increase rent for lease renewals, but only in compliance with your local rent control ordinance (if one exists). Cities like Chicago have not adopted statewide rent control, so Illinois state law allows unlimited rent increases. However, SB 2979 cannot be circumvented by raising rent and claiming the increase offsets prohibited fee elimination. If evidence suggests the rent increase was designed to recoup junk fee revenue, a tenant could argue the fee was converted into a rent hike and file a complaint with the Attorney General.

Q5: How does SB 2979 interact with federal housing requirements?

A: SB 2979 is more restrictive than federal law and takes precedence. The Fair Housing Act does not specifically address junk fees, but it does prohibit discriminatory fee practices. SB 2979 ensures uniform, non-discriminatory fee elimination across all tenants.

How LeaseBase Helps You Stay Compliant

Managing fee compliance across multiple leases and tenants is operationally complex, especially for self-managing landlords juggling rental applications, renewals, and payment collection. LeaseBase’s compliance engine flags prohibited fee language in lease templates and rental agreements, ensuring you don’t inadvertently include banned charges. As new tenants apply or existing leases renew, the platform alerts you to SB 2979 requirements and surfaces any legacy fees that need elimination.

Additionally, centralized rent payment processing eliminates the need to charge portal fees or payment processing charges—costs are absorbed in the platform, keeping tenants compliant automatically. Combined with digital lease management, you maintain an audit trail of every lease revision and fee elimination, creating defensible documentation if tenant complaints arise.

For landlords managing 10+ units, this compliance visibility prevents the class action exposure described earlier. For smaller portfolios, it replaces the spreadsheet sprawl that causes fee errors.

Disclaimer

This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance specific to your situation. Illinois landlord-tenant law is complex and fact-dependent. If you receive a tenant complaint or demand letter related to junk fees, consult a real estate attorney licensed in Illinois immediately.