New 2025 Laws Every Illinois Landlord Should Know going into 2026

Property ownership and rental housing in Illinois don’t stand still. While headlines may focus on rising rents or housing shortages, lawmakers have quietly passed a batch of legal changes in 2025 that will shape how landlords operate in 2026 and beyond.

For anyone managing one or more rental units in Illinois, understanding these changes now can help avoid legal missteps, and keep business running smoothly.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Landlords should consult a qualified attorney or local housing authority to ensure compliance with all applicable laws and regulations.

The Big Picture: A Shift Toward Tenant Protections and Transparency

In 2025, the state legislature enacted a range of amendments aimed at strengthening tenant protections, improving transparency, and regulating common rental practices. For landlords, this means updating lease paperwork, adjusting policies around payments and screening, and ensuring compliance before next lease renewals or new tenancy agreements.

Key themes of the new laws include broadening tenant rights against retaliation, limiting certain fees or payment practices, improving clarity around security deposits, and giving tenants more consistent information about their rights.

What’s New — Key 2025 Laws Affecting Landlords

Here are the most important statutes, amendments, and rules passed recently that landlords need to know.

Landlord Retaliation Act (effective January 1, 2025)

The state’s new version of the Landlord Retaliation Act (Public Act 103‑0831) prohibits landlords from retaliating when tenants exercise their legal rights. That means landlords may not terminate a tenancy, refuse renewal, hike the rent, or take other adverse actions if a tenant has, for example, complained about unsafe conditions, requested repairs, or exercised other protected rights. A presumption of retaliation applies if adverse action happens within one year of the tenant’s protected activity. Landlords should review lease‑renewal policies and eviction practices to ensure compliance.

Tenant Screening / Credit-Report Reuse (effective January 1, 2025)

Under the new rules (Public Act 103‑0840), landlords may accept reusable tenant credit reports instead of performing fresh credit checks for each prospective tenant. To qualify, the report must be less than 30 days old, and accessible to the landlord at no extra cost. This change reduces repeated credit‑check fees for tenants, but landlords must make sure they’re using compliant screening services.

Payment Method Flexibility (effective for leases signed after January 1, 2025)

A law now prohibits landlords from requiring electronic funds transfer (EFT) as the only acceptable form of rent payment. If landlords use third‑party portals that impose fees, tenants must also be allowed to pay by cash or check without penalty. This gives tenants more flexibility and helps avoid disputes about payment methods.

Written Receipts, Deposit Handling and Transparency Rules

New regulations require landlords to issue written receipts for rent and security deposit payments. For security deposits, landlords must also adhere to updated procedures around listing deposit amounts, return timelines, and accounting for deductions. These changes aim to reduce misunderstandings and provide clear records for both parties.

Disclosure Requirements: Flood Zones, Safety, and Habitability

Landlords must now notify tenants when a rental unit is in a designated flood zone. Other statutory obligations remain in place regarding habitability: landlords must ensure units comply with health and housing codes, and respond to tenant concerns regarding safety and maintenance. The retaliation law reinforces that tenants may raise issues without fear.

New Tenant Right to a “Summary of Rights” Added to Leases (effective January 1, 2026)

A new law, often referred to under the umbrella of the Summary of Rights for Safer Homes Act (765 ILCS 752), requires landlords to attach a state‑issued “Summary of Rights” sheet as the first page of any residential lease, whether new or renewed, starting January 1, 2026. The tenant must sign an acknowledgment of receipt. Failure to include this can result in statutory penalties (either actual damages up to $2,000 or a minimum of $100). Landlords should begin updating lease templates now to include this summary.

Strengthened Rules for Eviction Process and “Unauthorized Occupants” (effective January 1, 2026)

Newly enacted Senate Bill 1563 clarifies the ability of property owners or landlords to have law enforcement remove unauthorized occupants (i.e., individuals living in a property without a lease or legal right) in certain cases of criminal trespass, without requiring a full-blown eviction case. This may speed up recovery of possession in some scenarios—but landlords should apply the law carefully to ensure compliance with notice and procedural standards.

Prohibition on Algorithm‑Based Rent‑Setting Practices (pending / recent)

A bill marked as Prohibition of Algorithmics in Rent Act (e.g. HB 1427) seeks to prevent landlords from using algorithmic pricing tools that rely on nonpublic competitor data when setting rents or rent renewals. If enforced, reliance on such “rent‑setting software” would be considered a deceptive practice under consumer protection law. Landlords using such tools should monitor developments closely and may need to pause or modify these practices.

What These Changes Mean for Landlords

For property owners and managers in Illinois, these laws mark a shift toward greater regulation, transparency, and tenant protection. Landlords will need to:

Update lease templates to include the required “Summary of Rights” starting in 2026.

• Revise application and screening processes to accept reusable credit reports and provide tenants with proper receipts.

  
  

• Offer rent payment options beyond just electronic portals if third‑party payment processing is used.

  
  

• Be cautious about rent‑setting practices, especially if using algorithmic tools or data-driven pricing engines.

  
  

• Review eviction and occupancy‑removal procedures under new legislation addressing unauthorized occupants.

Train staff or agents involved in property management to understand and follow the new retaliation, disclosure, and documentation requirements.

These updates require administrative effort, but compliance will reduce legal risk and foster more stable tenant‑landlord relationships.

What Landlords Should Do Next?

Start 2026 with a compliance checklist:

Revise standard lease documents to include the new “Summary of Rights for Safer Homes.”

• Update tenant screening and payment‑processing practices to reflect reuse of credit reports and allow multiple payment methods.

  
  

• Ensure deposit‑handling and record‑keeping procedures follow the new transparency standards.

  
  

• If using software or services for rent pricing, review whether they rely on nonpublic competitor data and be prepared to discontinue or modify use pending final regulation.

  
  

• For properties vulnerable to unauthorized occupancy, review law enforcement protocols under the new bill.

  
  

• Regularly monitor state legislation and guidance from legal counsel to stay ahead of potential future changes.

Illinois landlords are entering a new regulatory era. These laws reflect growing recognition that tenant protections, transparency, and fairness benefit the broader rental market. Landlords who stay informed and adapt proactively will not only avoid legal problems but build more sustainable and trustworthy rental businesses.

For more information, feel free to reach out to us at 630-778-1800 or info@suburbanrealestate.com.