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Contents
This article provides general information and is not legal advice. For accuracy and specific guidance on landlord-tenant laws, consult an attorney before making any decisions or taking action.
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Having a thorough tenant screening process is an essential step if landlords want to mitigate risks when renting out their properties. A good screening process will allow you to identify top rental applicants and give you confidence that you have settled on a tenant that can and will pay the rent on time and look after your property.
There are several different tenant background check and credit check options that landlords can run, whichever you choose to run as part of your application process though it is essential that you abide by the laws that govern tenant screening in Illinois.
For example, landlords cannot discriminate against certain protected classes during tenant screening. Also, they need to get the consent of an applicant before they can conduct any background check. Not complying with these landlord tenant laws can lead to legal repercussions for the property owner.
This article covers tenant screening laws in Illinois 2025 from application requirements to background checks. These laws specify what information can be collected, how it can be utilized, and the limits on fees associated with background checks.
There are several federal, state, and local laws that regulate the Illinois tenant screening process. These laws outline the legal guidelines landlords must follow during tenant screening.
Below is an overview of some of the tenant screening laws in Illinois.
The federal Fair Housing Act (42 U.S.C. 3601 et seq.) prohibits landlords from discriminating against applicants in their screening process. Protected classes under this act include race, color, sex (including pregnancy, sexual orientation, and gender identity), disability, religion, familial status, national origin, and citizenship status.
As good practice, landlords should avoid asking for information that might be considered discriminatory in their application forms.
On a state level, the Illinois Human Rights Act further extends the protections in the Fair Housing Act to cover ancestry, age, order of protection status, military status, pregnancy.
The Fair Tenant Screening Act (FTSA) is a new law that was recently passed by Illinois lawmakers under HB4778 and is set to take effect on January 1, 2025. This act aims to establish consumer protections for applicants during the screening process.
According to provisions in the law, landlords cannot charge more than the actual cost of evaluating the application, such as screening and application fees. Also, prospective tenants would gain the right to receive copies of information used in the screening process from landlords.
There is currently no statewide cap on the amount landlords can charge for application fees; however, these fees are expected to be reasonable. For landlords, it's important to note that excessive charges may discourage potential quality tenants from applying.
While application fees in Illinois are considered non-refundable, landlords are required to provide a receipt for each fee collected.
Furthermore, the provisions in 765 ILCS 705/25 allows tenants to submit a reusable tenant screening report instead of paying an application fee, provided it meets specific criteria.
Starting January 1, 2025, a new bill (HB 4778) will come into effect in Illinois, altering the definition of an application fee under the state's Landlord and Tenant Act.
Once implemented, landlords will only be allowed to charge a fee that reflects their actual out-of-pocket costs for evaluating an application. While there is no strict cap on this fee, it must correspond directly to these costs. Also, this law will require landlords to refund any unspent portion of the application fee to the applicant.
In Illinois, landlords are obligated to provide prospective tenants with clear, written disclosures regarding the criteria used for tenant screening and any associated fees. This requirement aligns with the federal Fair Housing Act and Illinois anti-discrimination laws, ensuring a fair and transparent screening process.
Screening Criteria: The disclosure must detail the specific factors considered during the screening process. This includes:
Application Fees: Landlords must provide a written notice that details the costs associated with the application fee. This includes any non-refundable fees that cover background checks and other screening expenses.
Response Timeline: The disclosure should inform applicants of the expected timeline for responses regarding their application status.
Unit Availability: Landlords should communicate whether the rental unit is still available at the time of application submission.
Reasons for Denial: If an application is rejected, landlords are obligated to provide a written explanation for the denial, fostering transparency in their decision-making process.
Third-Party Providers: If a third-party service is used for tenant screening, landlords must disclose this information, including the name of the provider and any relevant details about their screening practices.
Landlords are mandated to obtain a signed consent form from an applicant before conducting any background or credit checks on them. This requirement is per the Fair Credit Reporting Act (FCRA) and Illinois law. If an applicant declines to give consent, landlords have the option to withdraw their application.
When using third-party screening services, landlords must ensure that the providers are certified under the FCRA. This certification guarantees that both the landlord and the applicant's information is handled securely and in compliance with federal regulations.
Additionally, it's important for landlords to note that the FCRA imposes specific limitations on what can be reported in background checks.
For instance, it restricts reporting certain negative information, such as debt collections or civil judgments, to a maximum of seven years. However, bankruptcies can be reported for up to ten years. Notably, there are no time limits for reporting information related to positions with an annual salary of $75,000 or more.
Tenant screening in Illinois involves several key steps to ensure compliance with state laws and to find suitable tenants. Below is a step-by-step overview of the Illinois tenant screening process.
Gather applications from all prospective tenants, including essential information such as contact details, employment history, and rental history.
Before conducting background checks in Illinois for rental, secure written consent from applicants for credit and criminal history checks, as required by law. When you use Landlord Studio this consent is gathered as part of the screening and application process.
Perform thorough checks on credit history, criminal records, and eviction history. Ensure that these background checks comply with both state and federal fair housing laws. A good strategy would be to employ online screening services when carrying out tenant background checks in Illinois.
When reviewing online tenant screening services you should look for accuracy and completeness of information among its features. Other factors to consider when choosing an ideal online tenant screening service are cost, data security, and the speed of report delivery.
Landlord Studio provides a thorough tenant screening report that includes a full credit report, rental history, comprehensive national background check, and eviction records. Reports take as little as 30 minutes, with prices starting at $45. (Fees can be charged to the tenant or paid by the landlord - state laws apply).
Once you have all the details you need, you can assess each of your applications. You should use a consistent criteria when making your decisions using allowable factors such as credit score, current income, and rental history, to maintain fairness and ensure legal compliance.
Finally, you need to notify applicants as to the outcome of their application. Should you use the information in a tenant screening report to make the decision to deny the application, you will need to provide the tenant with an Adverse Action Notice, in compliance with the The Fair Credit Reporting Act (FCRA). This written notice must explain the reasons for the denial and include contact information for the screening company used.
The main essence of tenant screening is for landlords to assess a potential tenant's ability to fulfill the lease obligations. However, it's crucial for landlords to ensure they conduct background checks for rentals in compliance with state and federal laws.
On the bright side, reliable property management software like Landlord Studio can streamline this process. You don't have to worry about legal repercussions as this software works in compliance with tenant screening laws in Illinois.
Landlord Studio provides cost-effective tenant screening solutions that is integrated into the rental listing and application process, helping you streamline the entire tenant selection process, from lead generation to move-in day.
Create your Landlord Studio account today and run a comprehensive tenant screening report for free that leverages data from TransUnion and enhance your tenant screening in Illinois.
