Own Rental Property in 2024 Without Going to Jail

Owning rental property is a great way to diversify your investment portfolio. That being said, you can't spend the profits you make on these investments if you’re locked up in prison. Here’s what you need to know about the new laws relating to rental properties that are effective Jan 1st, 2024, so you can keep your cash flow and stay out of jail.

Immigration Status is Now a Protected Class

Many protected classes cannot be discriminated against when it comes to renting out your property (as there should be!). Before 2024, these included characteristics such as race, religion, national origin/ancestry, sexual orientation, disability, etc. The Illinois Human Rights Act (HRA) has added “immigration status” as a protected class. It reads that a person’s actual OR perceived citizenship or immigration status may not be the sole reason they are rejected for housing. If their money is green, and they meet the income and credit requirements described on the listing, you cannot treat them any differently than other applicants because of their immigration status.

Illinois Security Deposit Return Act

Also as of January 1, 2024, a lessor may not withhold any part of the security deposit for property damage unless the lessor has provided the lessee with an itemized statement of the damages allegedly caused and the estimated or actual cost to repair or replace the items. In the past, this was only required on properties that had 5+ units. This statement must be provided to the lessee within 30 days of the date the lessee has vacated the property, or within 30 days of the date the lessee’s right of possession ends, whichever is later. If no such statement is delivered to the lessee, the lessor shall return the security deposit in full within 45 days of the date that the lessee vacated the property. If the lessor does not comply with the act, they may be liable for twice the amount of the security deposit due, along with court costs and reasonable attorney fees.

Radon Disclosure

In the past, disclosure of radon on rental listings was only required if there was a completed test showing evidence of elevated levels of radon that had not been remediated or rested to show safe levels. Starting January 1, 2024, a tenant has 90 days from the beginning of the lease to conduct a radon test (at their own expense). Once they have the results, they must provide the results to the lessor (AKA landlord) within 10 days.

If the test shows elevated concentrations of radon, the tenant has the option to terminate the lease if the lessor refuses to mitigate through a professional radon contractor. At the end of their 90-day window, the tenant can still test for radon but loses his/her right to terminate the lease. If the test shows safe levels of radon, the landlord may use that test as proof of no hazard for up to two years. There is no requirement or obligation for the tenant or landlord to choose to test and/or mitigate. It is purely the tenant’s choice.

If the lessor does not dispute the test result or mitigate within 60 days, the tenant may hire a radon contractor at their expense. He/she must have the lessor’s consent regarding the installation of the system, or the tenant can terminate the lease (only if/when the lessor does not provide all documentation and the radon disclosure at the beginning of the lease)

Landlord Tenant Act

One last law to note is that the Landlord Tenant Act was amended so that landlords cannot REQUIRE a tenant to pay their rent via electronic funds transfer. If that is the agreed-upon method, it is of course okay, but it cannot be the only method offered to the tenant.

Keep in mind, that there are also many local laws you need to follow depending on the area you're in. Some areas have stricter requirements regarding property management and delivering the security deposit, but that varies by location.

To determine the right strategy for your next real estate transaction, you need to have the right real estate expert in your corner. Give me a call today for more info on this, and everything else real estate!