Illinois Junk Fee Ban — What Landlords Must Stop Charging by July 2026

What SB 2979 Does: The Illinois Junk Fee Ban Framework

On July 1, 2026, Illinois will join California, New York, and a growing number of states in banning residential "junk fees" — fees that landlords charge to tenants beyond rent, security deposits, and legitimate operational costs. Senate Bill 2979, signed into law in 2024, represents one of the most aggressive tenant-protection fee statutes in the country.

Unlike California's SB 611 (which focuses on limiting certain fees), Illinois's SB 2979 takes a broader approach: it prohibits entire categories of fees and requires landlords to disclose all charges in writing before a tenant signs a lease. For self-managing landlords, this means a comprehensive audit of your current fee practices is essential by June 30, 2026.

The statute is codified under Illinois Residential Tenants' Rights Act (ILCS 765/701 et seq.) as amended by SB 2979. It does not preempt local ordinances, meaning cities like Chicago may impose stricter rules — always check your municipality's specific regulations.

Which Fees Are Prohibited Under SB 2979?

SB 2979 creates a clear list of fees landlords cannot charge. The prohibited categories are:

1. Application Fees (Beyond Reasonable Costs)

You may charge an application fee, but only to recover actual, documented costs. Permitted costs include:

• Credit report pulls (capped at $30)
• Background check services (capped at $30)
• Eviction/court record searches (actual cost)
• Administrative labor directly tied to processing the application

Application fees are prohibited if they:

• Exceed the actual cost of screening
• Are charged when the landlord does not conduct any screening
• Include a "profit margin" on screening costs
• Are non-refundable when the tenant is approved

Compliance Action: If you charge a flat $75 application fee but only spend $45 on credit and background checks, you are in violation effective July 1, 2026. You must refund the difference or reduce the fee to match actual costs.

2. Pet Deposits and Fees (Significant Restrictions)

Pet deposits are heavily restricted under SB 2979. The law allows:

• A pet deposit capped at one month's rent (not per pet)
• A non-refundable pet fee capped at 50% of one month's rent (one-time, not annual)

The following pet-related charges are prohibited:

• Annual pet renewal fees
• Per-pet fee increases
• Pet rent (monthly recurring charges for pets)
• Breed-specific deposits or surcharges
• Pet deposits that exceed one month's rent total

Example: Your rent is $1,500/month. You may charge:

• Pet deposit: up to $1,500 (one-time, held in escrow)
• Non-refundable pet fee: up to $750 (one-time)
• Monthly pet rent: $0 (prohibited)

If your current lease charges $50/month for a pet, that violates SB 2979 effective July 1, 2026.

3. Lease Renewal and Early Lease Extension Fees

SB 2979 prohibits:

• Lease renewal fees (any charge to extend or renew a lease)
• Early extension fees (charges to renew before lease expiration)
• Administrative fees tied to lease renewal processing

If you currently charge a $200 "lease renewal processing fee" or $100 "early extension fee," you must eliminate these charges by July 1, 2026.

4. Utility Setup or Deposit Fees

SB 2979 prohibits landlords from charging tenants for:

• Utility setup or connection fees
• Utility deposit fees (for services the tenant will pay directly to the utility company)
• Administrative fees for utility transfer coordination

You remain responsible for paying utility setup costs at turnover. This is a landlord cost, not a tenant responsibility.

5. Administrative or Processing Fees (Non-Specific)

SB 2979 prohibits vague "administrative fees" including:

• Move-in inspection fees
• Lease document preparation fees
• Security deposit processing fees
• Parking application fees (beyond actual cost)
• Maintenance request processing fees

If the fee is not directly tied to a legitimate, measurable cost (like actual credit report expense), it is prohibited.

Permitted Fees (What You Can Still Charge)

SB 2979 does NOT prohibit:

• Rent — the full agreed-upon monthly payment
• Security deposit — up to one month's rent (Illinois law)
• Actual late fees — subject to reasonableness standards (no more than 5% of rent per Illinois law)
• Returned check fees — for bounced rent payments (must be reasonable)
• Parking fees — if actually tied to dedicated parking spaces (not "access" fees)
• Actual damage repair costs — beyond normal wear and tear (deducted from deposit with itemized invoice)
• Utility charges — if tenant directly causes extra utility usage (e.g., submetering, actual extra usage)
• Court costs and legal fees — if tenant is evicted or breaks lease (must be reasonable and documented)

Timeline: When Does SB 2979 Take Effect?

Date	Action Required
Now (October 2026)	Complete audit of all current leases, addenda, and fee schedules. Identify prohibited charges.
November–May 2026	Provide written notice to all current tenants of changes effective July 1, 2026. Update lease templates.
July 1, 2026	SB 2979 is fully enforceable. New leases must comply. Prohibited fees are illegal.
July 1, 2026 forward	All lease renewals and new tenant agreements must comply or face penalties.

Critical Note: The law does not provide a "cure period" after July 1, 2026. Violations on that date are immediately actionable by tenants or the Illinois Attorney General.

Penalties for Non-Compliance

SB 2979 carries significant civil penalties:

Tenant Civil Claims

Any tenant charged a prohibited fee may sue for:

• Actual damages — the full amount of the prohibited fee(s)
• Civil penalty — up to $500 per violation (per fee charged)
• Attorney's fees and court costs — if tenant prevails

Example: You charge a tenant a $75 junk fee on move-in (violation 1), then a $200 lease renewal fee one year later (violation 2). The tenant can recover:

• $75 actual damages + $500 penalty (violation 1) = $575
• $200 actual damages + $500 penalty (violation 2) = $700
• Attorney's fees and costs
• Total exposure: $1,275+ per tenant

Attorney General Enforcement

The Illinois Attorney General's office can file civil actions against landlords for systemic violations. Enforcement may include:

• Cease-and-desist orders
• Refund of all prohibited fees collected
• Civil penalties up to $500 per violation
• Injunctive relief preventing future violations
• Restitution to affected tenants

The AG's office has shown willingness to prosecute property managers and landlords under similar state fee-ban statutes (see California's SB 611 enforcement 2022-2025).

No Safe Harbor for Mistakes

Unlike some statutes, SB 2979 does not provide a "good faith" defense. If you charge a prohibited fee, even unintentionally, you are liable for:

• Refund of the fee
• $500 civil penalty
• Tenant's attorney's fees

This means ignorance of the law is not a defense. Audit your practices now.

Fee Disclosure Requirements (Separate from Prohibition)

SB 2979 also strengthens Illinois's existing fee disclosure rules. Effective July 1, 2026, you must:

Provide Written Disclosure Before Lease Signing

At least 3 days before a tenant signs a lease, you must provide:

• A written itemization of all fees the tenant will pay
• The purpose and amount of each fee
• Which fees are refundable vs. non-refundable
• The timeline for refund (if applicable)

This disclosure must be separate from the lease itself (not buried in fine print on page 3).

Format Requirements

The disclosure must:

• Be in plain language (not legal jargon)
• Use the same font size as the lease body
• Be provided to the tenant in writing (email, printed, or digital form acceptable)
• Include a signature line confirming tenant receipt and understanding

Timing: 3-Day Rule

You must provide the fee disclosure at least 3 business days before the tenant signs the lease. If a tenant signs a lease without receiving the disclosure, they may rescind the lease within 3 days and recover all fees paid.

Step-by-Step Compliance Checklist

Complete this audit by June 30, 2026:

1. Identify all current fee practices
   • List every fee charged to tenants (application, pet, renewal, utility, administrative, etc.)
   • Document the amount of each fee
   • Record how often you charge each fee (per tenant, per lease, annually, etc.)
2. Cross-reference against SB 2979 prohibited list
   • Compare each fee to the prohibited categories above
   • Mark fees that are clearly prohibited (pet rent, renewal fees, utility setup, etc.)
   • Mark fees that require adjustment (application fees over actual cost, pet deposits over 1 month's rent)
3. Calculate refunds for current tenants (if applicable)
   • If a current tenant paid a prohibited fee in 2025-2026, you may owe a refund
   • Calculate the amount owed per tenant
   • Determine if you will refund proactively or wait for a demand
4. Rewrite lease templates
   • Remove all prohibited fee language from your master lease
   • Adjust fee amounts that exceed SB 2979 caps
   • Add SB 2979-compliant disclosure language
   • Have a real estate attorney review the revised lease
5. Create a fee disclosure form
   • Draft a standalone document listing all actual fees
   • Include the 3-day advance notice requirement in your leasing workflow
   • Document when disclosures are sent to tenants
6. Notify current tenants (optional but recommended)
   • Send written notice to all current tenants explaining SB 2979
   • Clarify which fees (if any) will change or be eliminated
   • Provide a compliance date of July 1, 2026
   • This proactive step demonstrates good faith and may reduce litigation risk
7. Update screening and intake processes
   • Review tenant application systems (online forms, portals, etc.)
   • Remove prohibited fee options from rental software
   • Train yourself (and any staff) on compliant fee practices
8. Document your compliance efforts
   • Keep records of when you audited your practices
   • Save copies of old leases and new compliant leases (with dates)
   • Document any refunds issued to current tenants
   • This paper trail shows good faith if a dispute arises

Common Questions: Illinois Junk Fee Ban

Q: Can I charge a tenant for a credit report if they don't authorize it?

A: No. Under SB 2979, you can only charge for actual screening costs incurred. If a tenant objects to a credit check, you cannot charge for it. Additionally, the Fair Credit Reporting Act (FCRA) already requires written authorization before pulling a credit report. Any unauthorized credit check violates federal law, and the fee is doubly prohibited under SB 2979.

Q: What if my lease currently charges pet rent? Do I have to refund existing tenants?

A: This is a gray area. SB 2979 prohibits pet rent effective July 1, 2026, but does not explicitly address refunds for fees charged before that date. However, best practice is:

• For leases renewing after July 1, 2026: eliminate pet rent from the renewal lease
• For current tenants: provide written notice that pet rent will end on July 1, 2026
• For proactive compliance: offer refunds of pet rent collected in the 6 months prior to July 1 to reduce litigation risk

This is a technical legal question; consult an Illinois real estate attorney for your specific situation.

Q: If I'm charging $75 for application fees but only spending $30 on a credit report, can I keep the extra $45?

A: No. Effective July 1, 2026, SB 2979 prohibits application fees that exceed actual, documented costs. You must either:

• Reduce the application fee to $30 and refund the difference to all tenants who paid the higher amount
• Document additional screening costs (background check company fee, labor for processing, court record search) that legitimately exceed $30

Any profit margin on application fees is prohibited. The fee must equal actual costs only.

Q: Does SB 2979 apply to commercial properties?

A: No. SB 2979 applies only to residential tenancies. Commercial leases are generally exempt. However, always check local ordinances — some cities extend protections to certain commercial tenants (e.g., small retail spaces).

Q: What if a tenant breaks a lease early? Can I charge fees to break the lease?

A: This is complex. SB 2979 distinguishes between:

• Prohibited fees — administrative or processing fees for lease breaks
• Permitted damages — actual losses from early termination (e.g., lost rent, re-leasing costs, if lease includes a liquidated damages clause)

If your lease includes an "early termination fee," that likely violates SB 2979. However, if your lease specifies that the tenant owes actual damages (calculated as unpaid rent + reasonable re-leasing costs), that may be permissible if it meets the requirements for liquidated damages under Illinois law.

This is a high-risk area; have an attorney review any early termination provisions in your leases.

Q: What's the difference between SB 2979 (Illinois) and SB 611 (California)?

A: Both ban junk fees, but with different scopes:

Provision	Illinois (SB 2979)	California (SB 611)
Application Fees	Capped at actual cost; credit report capped at $30	Capped at actual cost; no specific cap
Pet Deposits	Capped at 1 month's rent total + $750 non-refundable max	Capped at 1 month's rent (pet deposit only)
Pet Rent	Prohibited	Prohibited
Lease Renewal Fees	Prohibited	Prohibited
Utility Setup Fees	Prohibited	Not explicitly addressed
Private Right of Action	Yes, up to $500 per violation + attorney's fees	Yes, up to $500 per violation + attorney's fees

Practical Compliance Tools

To manage SB 2979 compliance across multiple properties, consider:

Lease Document Management

Version all lease templates with an effective date. Example: "Lease Template — Illinois Compliant — Effective July 1, 2026." Keep old templates archived with the date they were replaced. This paper trail proves you transitioned to compliant leases intentionally.

Fee Auditing Spreadsheet

Create a simple table:

Fee Type	Current Amount	SB 2979 Status	Action Required	New Amount (Post-7/1/26)
Application Fee	$75	Prohibited (exceeds actual cost)	Reduce to actual cost or eliminate	$30 (credit report only)
Pet Rent	$50/month	Prohibited	Eliminate completely	$0
Lease Renewal Fee	$200	Prohibited	Remove from lease	$0

This ensures you catch every fee type and document your compliance decision-making.

Lease Renewal Tracking

If you use lease operations software, configure it to flag leases renewing after July 1, 2026, and ensure renewal documents use compliant templates. This prevents accidentally re-signing a tenant under an old, non-compliant lease.

How to Train Yourself on SB 2979

Resources:

• Full text of SB 2979: Illinois General Assembly website (HB 3469 / SB 2979)
• Illinois Attorney General guidance: Illinois Attorney General's Consumer Fraud Bureau (expected in Q4 2025)
• Real estate bar associations: Illinois State Bar Association has published tenant-landlord law updates (search ISBA SB 2979)
• Tenant advocacy orgs: Illinois Housing Action Coalition and Haymarket Collective have issued SB 2979 guidance

Set a calendar reminder for January 2026 to review the Illinois Attorney General's office website for official guidance documents or enforcement priorities related to SB 2979.

Local Ordinances: Does Your City Have Stricter Rules?

SB 2979 is a state floor, not a ceiling. Cities may impose stricter fee restrictions. Key cities to check:

• Chicago — Check Chicago Municipal Code §5-12-070 et seq. for any additional fee restrictions
• Evanston — Historically has strict tenant protections; verify current ordinances
• Oak Park — Strong tenant-protection history; confirm current rules
• Champaign — University town with tenant-forward policies; check local code

If you manage properties in multiple Illinois municipalities, audit each city's municipal code for fee restrictions in addition to SB 2979 state-level rules.

Avoiding Litigation: Proactive Compliance Strategy

The best defense against a SB 2979 violation lawsuit is not to violate the law. Here's your three-step strategy:

Step 1: Audit Before July 1, 2026

Complete the checklist in this article by June 30. Document the audit process and your findings. If you later face a claim, you can show you made a good-faith effort to comply.

Step 2: Communicate Changes to Current Tenants

Send a letter to all current tenants (by May 2026) explaining:

• SB 2979 takes effect July 1, 2026
• Specific fees charged under old leases will be eliminated or changed
• They will receive updated fee disclosure documents for any lease renewal after July 1
• Contact information if they have questions

Example language: "Effective July 1, 2026, Illinois law (SB 2979) restricts certain housing fees. We are updating our practices to comply. Any pet rent charges ($XX/month) will end on your next lease renewal. We appreciate your tenancy."

This transparency shows compliance intent and may discourage litigation.

Step 3: Update All Templates and Train Yourself

After July 1, 2026, use only compliant leases for all new tenancies and renewals. If you accidentally use an old template with a tenant, catch it immediately, notify the tenant in writing, and refund any prohibited fees charged.

Should You Use a Lease Management Platform?

As of October 2026, most property management platforms still allow landlords to charge junk fees (because platforms are nationwide and don't update per-state rules). If you use a generic platform, verify it allows you to:

• Disable prohibited fee types
• Cap fees (e.g., application fees to actual cost)
• Attach a separate fee disclosure document
• Track which version of your lease each tenant signed

LeaseBase's compliance engine flags state-specific fee restrictions and requires compliance before leases can be generated, eliminating the risk of accidentally charging a prohibited fee.

Final Checklist: SB 2979 Compliance by July 1, 2026

Use this as your master compliance checklist:

• [ ] Read full text of SB 2979 (Illinois ILCS 765/701 et seq.)
• [ ] List all fees currently charged to tenants
• [ ] Cross-