A landlord is only as good as the lease they have their tenants sign. Yes, your realtor's standard lease agreement that they get from their association may follow all state and local laws; however, it does not have the additional terms you need to keep your tenants in line when they decide to wander outside the lines. In Chicago, if you’re caught not giving the proper landlord-tenant law disclosure, you can be found liable for huge fines and court costs if your tenant decides to take you to court.
So the first thing I want to talk about is the disclosures we need to add to our existing lease agreement.
1) Heating disclosure: In Chicago, you must get the prior 12 months of heating costs for your apartment and share the average cost with your prospective tenant so that they are aware of what utility costs may look like after they move in.
2) Security deposit: You must disclose to your tenant what bank you are holding their security deposit in (and don't forget to pay the interest on it).
3) Flood disclosure: This is new in IL in 2025, but now if your building is in a flood zone, or if you are renting a ground-level apartment or house, you must disclose if you know of any past floods.
4) Lead-based paint disclosure: you must disclose if you are or are not aware of any lead-based paint if your building was built before 1970.
5) Recycling Disclosure: If your apartment is in a building with more than 5 units, you must disclose on what day the recycling is picked up and by what company.
6) Property manager information: The landlord must supply an address and name where the landlord can be reached. This is where having an LLC or a property manager helps. By allowing them to be the landlord, you prevent yourself from having to give the tenants your personal information.
So now that we have gone over the provisions that state laws and Chicago laws force you to add to your lease, I want to talk about some lease agreement addendums that are a good idea to add to your lease.
1. No smoking of any kind.
Most landlords will prevent their tenants from smoking cigarettes, but do not address smoking marijuana, as many old leases would include specific rules against illegal drugs. However, now that marijuana is legal, if your lease still says no smoking cigarettes and a tenant smokes marijuana, they don't have any legal requirements to not smoke in your apartment. Furthermore, it is best also to include a fine system for any smoking that the tenants are caught doing. Without a fine per occurrence, your only choice for a tenant who decides to smoke inside your unit is to evict them or give them a warning you will evict them. By having a fine system, you or your property managers are allowed to add costs to the tenant that will increase their rent payments for the month and thus have a stronger effect on keeping them from smoking in the unit. If you want to take it one step further, I would also consider banning the burning of incense as this is often an excuse tenants use to avoid paying fines for smoking marijuana.
2. Pet policies
Again, we want to make sure that all pets in the apartment are accounted for. Also, we need to make sure our pet addendum not only says what pets are allowed but also has a fine for extra pets visiting the property, as well as a pet policy for action you can take if they do not clean up after their pet or their pet does damage to the property. The specific terms should have a fine for each day the pet is found on the property, plus a fee to reinspect the home to make sure the pet is actually off the premises. Lastly, if you do allow dogs, it may be worth forcing the tenants with dogs to have renters insurance. This way, if a dog bites a neighbor, you won't have to pay for the hospital bills when the tenant can't.
3. Keep common areas clean and clutter-free.
There is nothing worse than having tenants with boxes of stuff or garbage outside their unit door. Your lease should state a few things about this: 1. Clutter or garbage found outside in common areas will incur a fine. 2. After a warning and fine are assessed, if not cleaned up the items will be thrown out at tenants expense. Rental properties, if left unattended, often develop issues with pests such as roaches and rodents. Having lease clauses like this one will enable you to ensure that tenants respect the building.
4. Noise after 9 pm
Your building should have quiet hours. We like between 9 pm and 8 am. During these times, if complaints come in from neighbors of loud music, loud parties, etc., that can be heard outside their units, the tenant again should be fined. This lease clause is a little harder to enforce, as there may not be enough evidence if someone is not recording the noise, since generally speaking, you won't be on site during quiet hours. But I think just having this in the tenant's original lease agreement is enough to lower the likelihood of neighbors fighting over partying, etc.
5. Any city violations caused by tenants' direct actions or by the tenant not reporting damage caused by others will be charged back to tenants. One of the biggest fines we get as landlords is for overflowing garbage from tenants in the alleys in Chicago. They often happen overnight when someone dumps stuff in the alley, but if a tenant doesn't report it, and the city drives by before we, as property owners, do, we get stuck with huge fines.
6. Rent increase
In Chicago, our leases automatically go month-to-month if not renewed and the tenant doesn't move out. By having in the original agreement an increased price higher than what you would raise rent to if they renewed their lease, you can avoid any issues with tenants not giving you proper notice they are moving out or staying after their lease is up without agreeing to the new terms of a new 1 year lease.
With all of these residential lease agreements, the key is to make sure that when rules are broken, you can enforce a penalty without it hurting you more than the tenant. Suppose the only recourse you have when a tenant breaks their lease clauses is to evict an otherwise good-paying tenant. In that case, you have to decide if it's worth allowing the tenants to run your rental properties the way they want to or take back control and lose a lot of money while evicting them.
When writing your leases, it is vital to have legal counsel review your new lease agreement addendums and any other changes you made to the original lease contract that you are starting from. Solid lease agreements not only include all the proper local and federal laws, but also keeps you as a landlord protected from bad tenants.
If you'd like us to review your current leases and provide a complimentary consultation on where your lease falls short, we'd be delighted to offer this opportunity. You can email your lease to info@chicagostylemanagement.com and request that we look over your lease for any gaps. At Chicago Style Management, we pride ourselves on understanding the landscape of Chicago property management, especially on the South Side of Chicago, where buildings can be older and tenants a little more challenging to work with. If you have a rock-solid rental agreement, the next step is to ensure you are enforcing it. Again, this is where having one of Chicago's highest-rated property management companies running your property becomes imperative.
Take a look at our other blog posts to learn more about what you as a new landlord should be doing to keep up with all of the ongoing changes in the world of rental property investing in Chicago:
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