Illinois Rent Increase Laws

Is there a rent increase limit in Illinois? 

No, Illinois doesn’t cap rent increases or enforce rent stabilization laws, plus, local governments can’t enforce their own policies. Here’s a quick recap of Illinois rent increase laws:

Statewide caps: Since state law doesn’t regulate price adjustments, most landlords refer to the market rate. It’s a great way to determine a reasonable average rate based on your property’s size, features, and the area’s current demand.

Local rent control ordinances: Beyond Illinois not having a statewide policy, the Rent Control Preemption Act also prohibits rent control regulations at the city or county level (50 Ill. Comp. Stat. 825).

Exceptions: Illinois law doesn’t list specific exceptions for federal or subsidized housing programs, such as Section 8, either.

Rent Increase Notice Periods

Even though Illinois rent increase laws don’t limit amounts landlords can charge, you must notify tenants in advance if you plan to increase rent. To know what notice period to give tenants, refer to the lease agreement. Keep in mind that Chicago has its own set of notice requirements depending on the tenancy’s length. Here’s how it all works:

Fixed-Term Lease

While you can’t raise rent in the middle of a fixed-term lease, you can propose a new price when renewing the agreement. State law doesn’t specify a notice requirement here, but we recommend giving tenants at least 30 days’ notice.

Did You Know? If you plan to adjust the rent mid-tenancy, you must add a clause to your lease that allows it. Otherwise, you breach the agreement (765 Ill. Comp. Stat. 705/1).

Month-to-Month Lease

In month-to-month agreements, however, Illinois does have additional regulations, especially compared to fixed-term leases. Illinois law requires landlords to give tenants on a month-to-month lease at least 30 days’ written notice before raising rent. (765 Ill. Comp. Stat. 705/1).

The same also applies if you have a month-to-month room rental agreement. Follow the same 30-day notice protocol.

Chicago Notice Requirements 

The Chicago Residential Landlord and Tenant Ordinance (RLTO) considers the tenancy’s length when outlining notice requirements. Here’s how it works:

• 30 days’ notice if the tenant has lived there less than 6 months
• 60 days’ notice if the tenant has lived there for 6 months to 3 years
• 120 days’ notice if the tenant has lived there longer than 3 years (Chicago, Ill., Mun. Code § 5-12-130)

How to Deliver a Rent Increase Notice in Illinois

Use the following methods when delivering official notices in Illinois:

• Hand deliver the letter to the tenant or someone over 13 years old at the property.
• Post the notice in a conspicuous place on the property.
• Send the increase letter through Certified Mail (735 Ill. Comp. Stat. 5/9-211).

In order to use electronic delivery methods, such as email or through landlord software, you’ll need to add a clause to your lease agreement asking for permission to use electronic delivery methods and have the tenant sign it. Otherwise, courts may not consider digital notices legally binding.

Understanding Illegal Rent Increase and Retaliation

Illinois rent increase laws strictly prohibit landlords from retaliating against tenants (735 Ill. Comp. Stat. 5/9-120). You can’t punish someone for taking protected actions, such as:

• Complaining to a government agency about health and safety violations
• Joining a tenant union

Keep in Mind: If you increase a tenant’s rent within 1 year of them exercising a legal right, local courts presume retaliation.

On the other hand, you can’t increase rent based on a tenant’s race, sex, national origin, religion, disability, or other protected traits (Fair Housing Act). Err on the side of caution by avoiding discrimination, giving proper notice, and avoiding mid-lease hikes if your lease doesn’t permit them.

How to Write an Illinois-Compliant Rent Increase Letter

Now that we’ve covered state-specific laws in detail, let’s discuss the rent increase letter. Make sure your letter includes the following information to cover the basics:

• Full property address with unit number
• Tenant names
• Exact dollar amount of the increase
• Updated rent total and effective date

Don’t forget to include instructions for tenants on how to accept or opt out. If they refuse to pay the increase, they must move out of the unit when the tenancy ends.

Pro Tip: We recommend working with a PDF template to stay professional, consistent, and low-risk. Download TurboTenant’s free rent increase letter template to notify tenants properly in Illinois.

Managing the Rent Increase Process with Tenants

After you deliver your rent increase letter, all that’s left is to wait for the tenant’s reply. Follow these best practices to manage the situation:

• Accept: Once tenants sign the updated lease, charge your new rate on the effective date. And that’s it!
• Decline: Keep it professional and begin discussing the move-out process. Get ready to return their security deposit and conduct the move-out inspection. Lastly, prepare to re-rent the unit and secure a new tenant as quickly as possible.
• Negotiate: Sometimes, tenants ask you to reconsider the rent increase. If it’s a great tenant you’d like to retain, try to negotiate where it makes sense. In these cases, landlords often offer extended lease terms or push back the increase’s start date.

All in all, raising rent is a routine part of landlording. It’s how you keep up with both rising costs and shifting market conditions. With our helpful guide on Illinois rent increase laws, you can adjust your prices with confidence.