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

What Illinois SB 2979 Actually Prohibits

On July 1, 2026, Illinois landlords must stop charging fees that fall outside a narrow, legally permitted list. This is not a rent control bill—it’s a junk fee prohibition modeled on federal tenant protection frameworks and similar to laws already enacted in California and Oregon.

SB 2979 defines prohibited “junk fees” as any charge beyond legitimate lease-related costs. The statute does not use the term “junk fee” in the legislative text; instead, it defines what landlords cannot charge, which creates the compliance framework.

Prohibited Fees Under SB 2979

Application fees exceeding $50. Landlords may charge a single application fee, but the total cannot exceed $50 per applicant per application period. This fee covers the actual cost of running a credit report, background check, or criminal history search—but only if disclosed upfront. If your current application fee is $75 or higher, you must reduce it to $50 by July 1, 2026.

Administrative fees. Any charge labeled as an “administrative fee,” “processing fee,” “lease preparation fee,” “file management fee,” “document review fee,” or similar terminology is prohibited. These fees were traditionally charged as catch-all charges for landlord work. Under SB 2979, landlord administrative tasks are absorbed into the rental rate or security deposit structure.

Pet fees for service animals. You cannot charge any fee for tenants with documented service animals (as defined under the Americans with Disabilities Act). Pet fees for emotional support animals or comfort animals may be charged only if your lease explicitly permits pet ownership and the fee is reasonable. However, service animals—dogs or miniature horses specifically trained to perform tasks for disability—cannot be subjected to pet fees, breed restrictions, or size limitations.

Move-in inspection or walkthrough fees. Charging tenants for the cost of conducting a move-in inspection or walkthrough is prohibited. Under Illinois law (105 ILCS 5/9-209), landlords are already required to provide tenants with a move-in inspection checklist at no charge. Any fee labeled as an “inspection fee,” “walkthrough fee,” or “condition assessment charge” violates SB 2979.

Utility setup or transfer fees. If your lease requires tenants to set up utilities and you charge a fee for processing this (sometimes disguised as a “utility coordination fee”), this is now prohibited. Tenants are responsible for contacting utility companies directly; landlords cannot charge for facilitating this.

Lease renewal or modification fees. Landlords commonly charge $50–$150 to renew a lease or modify a lease term. SB 2979 prohibits these charges. If you currently charge a renewal fee, you must absorb this cost starting July 1, 2026.

Late payment fees exceeding 5% of monthly rent or $5, whichever is greater. While late fees are still permitted, they cannot exceed 5% of the monthly rent amount or $5—whichever is higher. If a tenant pays rent late and your lease currently charges a flat $50 late fee on a $1,000/month unit, you must reduce this to $50 (5% of $1,000). On smaller units, the $5 minimum applies.

Returned check or NSF (non-sufficient funds) fees excestrong than late payment fees. Your returned check fee cannot exceed the late payment fee cap. The statute treats these identically to late payments in terms of penalty structure.

Fees That Remain Permitted

SB 2979 does not prohibit the following charges, provided they are disclosed in writing before lease signing:

Fee Type	Legal Cap / Requirement	Compliance Note
Security Deposit	No statutory cap (separate from SB 2979)	Must be held in interest-bearing account per 765 ILCS 710/1
Last Month’s Rent	Equal to one month’s rent	Held in escrow; applied to final month only
Credit Report Cost	Actual cost, capped at $30	Included in application fee cap; documentation required
Background Check Cost	Actual cost, capped at $50	Included in application fee cap; third-party documentation required
Pet Deposit (non-service animals)	Reasonable amount, disclosed upfront	Must be separate from security deposit; returned per lease terms
Late Payment Fee	5% of rent or $5, whichever is greater	Cannot be compounded; must be reasonable
Damage Beyond Normal Wear	Actual repair cost, deducted from deposit	Not a “fee”; must provide itemized receipt per 765 ILCS 710/2

The Enforcement Mechanism and Penalties

SB 2979 creates a private right of action for tenants and a public enforcement role for the Illinois Attorney General. Understanding the penalty structure is critical for self-managing landlords because the consequences extend beyond a single tenant complaint.

Tenant Remedies

A tenant who is charged a prohibited junk fee can pursue damages under Illinois Consumer Fraud Act (815 ILCS 505/10a). The statute allows for:

• Treble damages: Three times (3×) the amount of the prohibited fee. If you charged a tenant a $100 “administrative fee,” the damage award is $300.
• Attorney fees and court costs: The prevailing tenant recovers all reasonable attorney fees and court costs, even in small claims court actions.
• Injunctive relief: A court can order you to cease the practice and modify all lease agreements and rental advertising.

Because damages are treble, a pattern of charging junk fees across multiple units compounds liability. If you charged 15 tenants a $50 prohibited “move-in inspection fee” per lease, your total exposure is $2,250 in damages alone, plus attorney fees (often $2,000–$5,000 for a tenant-side attorney) and court costs.

Illinois Attorney General Enforcement

The Illinois Attorney General’s Consumer Fraud Bureau can investigate landlords for systematic junk fee practices. The AG can:

• Issue cease-and-desist orders requiring immediate cessation of fee practices
• Seek civil penalties up to $50,000 per violation (treating each instance of charging a prohibited fee as a separate violation under Consumer Fraud Act framework)
• Compel refunds to all affected tenants plus administrative costs
• Initiate public enforcement actions that result in media coverage, impacting your reputation and future tenant applications

The AG has already indicated (in press releases accompanying SB 2979 passage) that enforcement will prioritize patterns of violations, not isolated incidents. Landlords who charge the same prohibited fee to every tenant in a 10-unit building are at significantly higher risk than those who charge it sporadically.

Defenses That Won’t Work

Landlords sometimes argue that they did not know about junk fee bans or that the fee was necessary for business purposes. These defenses fail under SB 2979:

• Ignorance of law: “I didn’t know this was prohibited” is not a defense. The law is published, and by July 1, 2026, landlords are deemed to have constructive notice.
• Fee covers actual costs: Even if a $100 “administrative fee” represents your actual time and overhead, it is still prohibited if it is not allocated to a permitted charge (credit check, background check). SB 2979 does not create an exception for “reasonable” administrative fees.
• Standard practice in the market: The fact that competing landlords charge junk fees does not insulate you from liability. If anything, it suggests systemic noncompliance across the market.

Compliance Checklist: Lease and Fee Audit by July 1, 2026

You have until July 1, 2026, to make lease and fee structure changes. Here is a step-by-step audit process:

Step 1: Identify All Current Fees in Your Lease Documents

Gather every version of your lease, including:

• Master lease template
• Lease addenda (pet addendum, parking addendum, etc.)
• Separate fee schedules or move-in packet documents
• Website rental listings or online rental applications
• Email templates used to communicate fees to prospective tenants

Create a spreadsheet with columns for:

• Fee name (exact title as written in lease)
• Current amount charged
• Permitted under SB 2979? (Yes / No / Needs Revision)
• Action required
• Deadline

Step 2: Classify Each Fee

For each fee, determine if it falls into a prohibited or permitted category. Reference the tables above. Mark any fees that are ambiguous or unclear with “Needs Legal Review.”

Example classifications:

• “Application Processing Fee ($75)” → Prohibited (exceeds $50 cap) → Action: Reduce to $50 or eliminate
• “Pet Deposit ($300)” → Permitted (if lease allows pets) → Action: Ensure disclosed upfront
• “Lease Renewal Fee ($100)” → Prohibited → Action: Remove entirely
• “Late Payment Fee (5% of rent)” → Permitted → Action: Confirm cap is not exceeded
• “Administrative Fee ($50)” → Prohibited → Action: Remove; absorb cost in rent or security deposit structure

Step 3: Draft Revised Lease Language

Rewrite your lease to remove prohibited fees and clarify permitted fees. Permitted fees must be clearly disclosed with:

• Exact dollar amount or calculation method (e.g., “5% of monthly rent”)
• Triggering condition (e.g., “if rent is paid after the 5th of the month”)
• Whether it is refundable or non-refundable

Example revised language:

“Late Payment Fee: If Tenant fails to pay rent by the 5th day of the month, Tenant shall pay a late fee equal to 5% of the monthly rent amount, provided that the minimum late fee shall not be less than $5. This fee is non-refundable and represents reasonable pre-estimate of damages caused by late payment.”

Example of what NOT to write:

“Administrative Processing Fee: $75 non-refundable, due at lease signing, to cover Landlord’s administrative time and document preparation.” ← PROHIBITED

Step 4: Update All Rental Listings and Marketing Materials

Review every platform where you advertise rental units:

• Zillow, Apartments.com, Craigslist listings
• Your own website or social media rental pages
• Rental application portals or websites

Ensure all fee disclosures comply with SB 2979. If you list a unit and mention a $75 application fee, update it to $50 by June 30, 2026. If you mention any prohibited fees (administrative, processing, move-in inspection), remove that language entirely.

Step 5: Notify All Current Tenants of Changes

For tenants with existing leases, provide written notice of any fee changes that affect their tenancy. If you currently charge a $100 lease renewal fee and are eliminating it due to SB 2979, notify tenants in writing:

“Effective July 1, 2026, Illinois law (SB 2979) prohibits certain fees previously charged by landlords. Your lease renewal fee of $100 is eliminated and will not be charged upon lease renewal. All other lease terms remain unchanged. Landlord”

This protects you from tenant disputes later and demonstrates good-faith compliance efforts.

Step 6: Train Your Leasing and Collections Staff

If you manage multiple units or have a family member assisting with leasing:

• Brief them on prohibited fees
• Update your leasing application process to reflect new fee caps
• Ensure late payment collection letters do not mention prohibited fees
• Train them to decline any application offering to pay an eliminated fee

Special Situations and Edge Cases

Can You Raise Rent to Offset Eliminated Fees?

Yes, but with limitations. SB 2979 does not limit rent increases. However, if you eliminated a $50 administrative fee and immediately raise rent by $100, a tenant could argue that the rent increase is pretextual retaliation for asserting rights under SB 2979. Illinois has strong anti-retaliation protections (765 ILCS 720/3). Keep rent increases reasonable and unrelated to the fee elimination.

Lease Signed Before July 1, 2026 — Which Rules Apply?

SB 2979 is effective July 1, 2026. A tenant who signed a lease on June 15, 2026, and the lease includes a prohibited $100 administrative fee charged at move-in on August 1, 2026, is protected. The fee is prohibited if charged after July 1, 2026, regardless of when the lease was signed. You must amend the lease before the fee is charged or not charge the fee.

For existing tenants whose leases expire before July 1, 2026, no action is required for that lease term. However, when renewing or extending the lease, you must comply with SB 2979.

Multi-Family Properties with HOA or Condo Fees

If your rental property is part of a homeowner association (HOA) and the HOA charges fees to the landlord (transferred to tenants via lease), those fees are separate from SB 2979 junk fee restrictions. However, if you charge a separate “HOA coordination fee” or “association fee” on top of the actual HOA charge, this is prohibited as an administrative fee. Pass through only the actual HOA cost without markup.

Co-Signers and Guarantors

You can still charge an application fee to a co-signer or guarantor (limited to $50). However, you cannot charge a separate fee for “guarantor review” or “co-signer processing.” The $50 application fee cap applies to all applicants for the same lease.

How to Document Compliance Going Forward

Maintain records showing your compliance efforts:

• Lease version history: Keep dated versions of your lease showing revisions made to comply with SB 2979
• Fee documentation: If you charge credit check fees, maintain receipts from the credit reporting agency showing the actual cost
• Tenant disclosures: Keep copies of all fee disclosures provided to tenants before lease signing, dated and signed
• Staff training records: Document that you trained anyone involved in leasing or collections on SB 2979 requirements
• Written notice to current tenants: Archive any letters sent to existing tenants notifying them of fee changes

These records protect you if a tenant later claims you charged a prohibited fee. They demonstrate that you made good-faith, documented compliance efforts.

Integration with Rent Payment and Lease Management Systems

If you use LeaseBase rent payment tools, ensure your late fee settings reflect the new SB 2979 caps before July 1, 2026. Review your lease operations configuration to remove any automated charges tied to prohibited fees. Your compliance engine can flag leases that still contain prohibited fee language, helping you audit faster.

Illinois Attorney General Contact and Resources

Illinois Attorney General Consumer Fraud Bureau:

• Phone: (877) 424-9446
• Website: www.cyberdriveillinois.com/departments/ag
• Complaint portal: Report junk fee violations online

The AG’s office has published compliance guidance on SB 2979 (available on the Secretary of State’s real estate disclosure portal). Landlords should review this guidance and retain it for compliance documentation.

FAQ

Can I charge a “move-in coordination fee” to cover the cost of scheduling the move-in walkthrough?

No. Any fee labeled as a move-in coordination, inspection, walkthrough, or condition assessment fee is prohibited under SB 2979. The move-in inspection process is a standard landlord obligation under Illinois law (105 ILCS 5/9-209) and cannot be charged separately to tenants. You must absorb this cost as part of your landlord expenses.

My lease currently charges a $60 application fee. Do I have to refund the $10 difference to all tenants who applied under the old fee structure?

SB 2979 applies prospectively from July 1, 2026, forward. Tenants who paid a $60 application fee before that date under the old lease terms are generally not entitled to a refund, as the practice was legal at the time. However, if you still collect applications between now and June 30, 2026, you may continue charging up to $50 per application without violation. Once July 1, 2026, arrives, reduce all new applications to $50 or lower. This is not grounds for a retroactive refund for prior applicants unless you voluntarily decide to issue one.

What if I charge different fees for different unit types (e.g., studio vs. 2-bedroom)?

SB 2979 does not prohibit tiered fee structures based on unit size or property amenities. However, the caps and prohibitions still apply. You cannot charge a $75 application fee for a 2-bedroom unit and a $40 application fee for a studio. Both must comply with the $50 cap. Permitted fees like security deposits can scale with unit size and rent, but application and background check fees have absolute caps.

I charge a “furniture package fee” for move-in furniture rental. Is this prohibited?

No. If you offer optional furnished units or furniture packages as part of a distinct service (separate from standard rental), this is a supplemental service charge, not a junk fee. However, you cannot label a mandatory cleaning or move-in fee as a “furniture package fee” to circumvent SB 2979. The fee must represent genuine, optional furniture rental or furnishing service.

Can I charge a “non-refundable pet fee” in addition to a pet deposit?

Yes, but with clarity. Pet fees (non-refundable administrative charges for allowing pets) are separate from pet deposits (refundable security funds for damage). SB 2979 does not cap pet fees, but you must disclose both the fee and the deposit upfront. Illinois courts have upheld non-refundable pet fees as distinct from pet deposits, provided the lease clearly distinguishes them. However, you cannot charge a “pet processing fee” ($50) plus a “pet administrative fee” ($50) plus a pet deposit ($300)—that crosses into junk fee territory. Limit yourself to one non-refundable pet fee amount plus a separate pet deposit.

Bottom Line: Timeline and Action Items

Deadline	Action	Responsibility
By August 31, 2026	Complete lease audit; identify all prohibited fees in current lease documents	Landlord (or attorney)
By September 30, 2026	Revise master lease template and all addenda to remove prohibited fees; update rental listings	Landlord
By October 15, 2026	Send written notice to all current tenants about fee changes affecting their future lease renewals	Landlord
Ongoing	Apply revised fee structure to all new lease applications and renewals; maintain compliance documentation	Landlord or leasing agent

SB 2979 represents one of Illinois’ most significant tenant protection laws in the past decade. Unlike rent control, which remains contentious, the junk fee ban reflects a broad consensus that certain lease-related charges serve no legitimate landlord purpose and function primarily as profit centers. Self-managing landlords who proactively audit their leases and fee structures by July 1, 2026, avoid the compounding liability of treble damages, attorney fees, and potential Illinois Attorney General enforcement.

The compliance burden is moderate if you act now: a thorough lease revision, updated rental listings, and training for anyone handling applications. Delay until after July 1, 2026, and each prohibited fee charged to a tenant becomes a $300+ liability (at minimum, after treble damages) plus potential attorney fees. The math favors compliance today.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney licensed in Illinois for guidance specific to your situation, leases, or fee structures. Junk fee law is evolving; seek current legal counsel before implementing major lease changes.