A Landlord’s Guide to Chicago’s Property Management Regulations

Being a landlord in Chicago entails more than just receiving rental payments from your tenant. Chicago's Residential Landlord and Tenant Ordinance (RLTO) governs both the legal obligations of landlords and protects tenants. Comprehending the RLTO will not only keep you compliant as a landlord, but also save you from unnecessary costly disputes and help you become a successful landlord.

What is the RLTO, and Who Must Comply?

The RLTO applies to most rental properties in Chicago, including residential landlords and property managers. However, there are a few exemptions, which include smaller owner-occupied buildings and limited non-residential units.

Nonetheless, recent amendments to the Act, including disclosure requirements, have rendered it more important than ever for landlords to keep abreast of RLTO changes to avoid liability or penalties.

Leases and Required Disclosures

Landlords in Chicago are required to provide tenants with a written summary of their lease, which must include the mandatory RLTO summary. If the overview is omitted, it may render the lease unenforceable

Other disclosures must also include the owners' or agent's contact information, the bank handling security deposits, known building code violations, or utility shut-off notices. These disclosures help provide transparency and minimize misunderstanding on both the landlord and tenant sides.

Security Deposits and Prepaid Rent

Chicago has fairly strict laws about security deposits, including a requirement that they must be held by the landlord in a separate interest-bearing account and the landlord must give the tenant a receipt containing certain information about the account, including the financial institution name and the account's location. 

If the security deposit is kept by the landlord for more than six months, the landlord must pay interest, which has to be proved. The landlord has 30-45 days after the tenant vacates the property to return the security deposit, along with a list of itemizations for any deductions for damage, or unpaid rent, etc.

Failing to comply can result in severe penalties, including double damages and attorney fees.

Tenant Rights and Landlord Duties

The RLTO makes sure that tenants have safe and habitable housing. This means maintaining and providing all the essential services, such as heat, water, and electricity, along with making sure your property is safe from hazardous conditions.

Furthermore, entering into a tenant’s unit demands at least two days’ notice, unless there is an emergency. Also, retaliating against tenants who claim their rights, such as requesting repairs, is strictly prohibited.

Evictions and Lease Terminations

Chicago's eviction process has strict requirements and legal procedures that landlords must follow.

Depending on the issue, such as unpaid rent or a lease violation, landlords must provide certain notices, including but not limited to a 5-day notice for unpaid rent or a 10-day notice for breaches of lease terms.

Furthermore, an eviction must happen through the court, which is enforced by the sheriff. If a landlord does not follow this process, they may expose themselves to liability.

Staying Compliant as a Chicago Landlord

Implementing RLTO isn't just about following the legal formalities of Chicago; it's about creating a safe environment for you and your tenant as well as protecting your investment. Need expert property management to stay compliant and reduce risk? Contact us today to guarantee your rental operations run smoothly and within the law.