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What is a Residential Lease Agreement?
When taking on a renter, it’s imperative that the landlord have a comprehensive lease agreement so that both the owner and the lessee are protected. A residential lease agreement is a legal document that is designed to help make the rental arrangement between the two parties legal. All of the fine details about the arrangement will be thoroughly fleshed out in the lease agreement, and both parties must fully agree and sign the agreement for it to be legal in the state of Illinois. Fortunately, in Illinois, not every lease agreement will need to be precisely the same, but there is pertinent information that all transactions of the type must have.
There are multiple benefits to having one of these agreements in writing rather than relying on a verbal agreement. For example, with expectations clearly stated, if one party fails to perform to the letter of the agreement, then there’s legal recourse that can provide a better situation for both parties. Additionally, for a landlord, this protects the owner from tenants that could abuse the property or are consistently late with rent.
Illinois Residential Lease Agreement Elements
The sections that follow are necessary elements to a residential lease. Each section includes information that pertains specifically to lease agreements in Illinois. All rental properties are unique, and it is important for the landlord to tailor their residential lease to the unit or property being rented. This guide lists various circumstances for landlords to consider as they are drafting a residential lease agreement. Landlords need to include the components listed here to be legally compliant in the state of Illinois.
Introduction of the Lease and the Parties Involved
As with most legal documents, the lease agreement will have first to outline the parties involved with the lease. For this to be fully legal, this means that the landlord and the primary tenant should be marked here. As a rule, this can be the full name, just the first and last, or the first, middle initial, and last name of the involved parties. Any additional tenants should also be included in the lease as well.
For the sake of completeness, it’s also a good idea to include contact information for all the parties in this section. This can consist of phone numbers, addresses of management companies, emails, or other identifying information. Finally, the property’s details will need to be included. This might entail:
- The street address (including town, state, and zip code)
- The county
- Any side streets
Terms and Limits of Occupation
Next, it’s critical to include essential details about the rental terms. This clearly outlines the space allotted and other aspects of the rental that should be kept track of. First, the document should clearly denote the number of bedrooms in the property as well as the number of bathrooms. Next, other aspects of the rental, like access to pools or exercise rooms, should be noted.
In some situations, when tenants move out, they sometimes take furnishings with them that came with the property. To avoid this, the appliances and furnishings that come with the rental will need to be noted. This will help the landlord avoid unintentional losses and will provide the renter with a clearly-stated list of things that will stay behind. This section can also take note of the condition of any appliances or furnishings and will let the renter know if these will be updated or replaced from time to time during the life of the lease.
Next, the maximum amount of people permitted to dwell in the residence should be clearly stated. Also, any rules that will deal with tenant guests should be clearly noted here as well. Some properties will even require that guest fees be applied for guests that stay longer than an agreed-upon period of time.
Rent and Utilities
In the next section, the total rental amount that is expected every month will need to be clearly stated. For clarity, this should include the monthly due date as well as the total amount, which can include things like pet fees. With rental properties, there is sometimes a rental management company that may not be on the premises, and when this is the case, it’s a good idea to let the renter know where rent is payable, especially if the payment location is out of the immediate area.
For those properties that require late fees, this will need to be clearly stated as well as if there is a grace period after rent is due where renters can be slightly late for rent. In the state of Illinois, it is required for the rental agreement to include mention of this in order for it to be legal to charge these fees. Additionally, the state limits late fees to either $20 or 20 percent of the rental price for each month the occupant is late in paying their rent.
When it comes to utilities, the arrangements can be reasonably varied from property to property. For example, while a property may be gas-heated, the tenant may not pay for this type of heat because it’s covered by the landlord. On the other hand, some properties may require a renter to pay for all of the associated utilities. If a landlord or management company is opting to pay a specific service, it has to be clearly outlined in the lease and understood by both parties that this will remain this way for the life of the lease. For the sake of ease, it’s also a good idea to place the names of any utility companies that service the area so that the tenant knows the options and can put the associated utilities in his or her name.
The actual term of the rental agreement should be included here as well. In Illinois, six-month, one-year, and two-year contracts are common, and place the precise duration of the agreement in this section. Additionally, some properties have a feature that allows the lease to auto-renew after it has expired. If this is the case, then the lease needs to state this explicitly. Finally, if there are rules that need to be followed during lease renewal, they should be stated here.
Security Deposits and Fees
In Illinois, many properties require that the renter pay a security deposit so that there’s a degree of coverage should damage occur to the property. In this next section, the amount of the security deposit should be clearly stated as well as what it will be used for if it’s needed. In this state, there’s no state-imposed limit on the maximum charge for a security deposit, but some municipalities may set a cap for this.
It’s important to note that Illinois requires landlords and property owners to return the security deposit to a renter within 30 to 45 days after the tenant has vacated the premises if there’s no damage to the property. To facilitate this, the landlord should be furnished with the tenant’s new address so that the check can be sent out quickly. If there are any deductions to the deposit as a result of damage, then the landlord needs to itemize these deductions and send them to the tenant within the prescribed time period.
Many residents across the state of Illinois drive, which means that properties with dedicated parking arrangements tend to be fairly popular. This is especially true for areas that are more densely populated where finding parking can be difficult. While not all properties will have parking for the tenants that dwell there, establishing the parking situation for tenants can be fairly important for those that do. For example, some landlords may require that tenants pay a parking fee to gain access to dedicated parking garages and spots. For these situations, the precise parking arrangement for the specific tenant should be explicitly outlined, and any dedicated parking spaces should be clearly stated.
In Chicago, it’s also critical to note that the Chicago Residential Landlord Tenant Ordinance (CRLTO) establishes some fairly strict guidelines for security deposits that may result in additional move-in fees.
Maintenance, Alterations, and Repairs
In Illinois, it’s essential for both parties to establish how maintenance, alterations, and repairs are to be done on the property. For example, when moving into a unit, it’s a good idea to firmly establish what needs to be done in the unit. To facilitate this, a walkthrough of the apartment with the landlord is suggested; this establishes if the appliances, carpet, flooring, or furnishings are up to par for the tenant, and if there are tweaks to be made, then the landlord can provide these before the move-in date.
Over time, repairs to various furnishings will be required in order to keep the tenant comfortable and happy. To execute these repairs more efficiently, the lease should include information that will provide details for the tenant on how to go about getting these repairs done in the unit. In some cases, tenants may be able to effect repairs themselves, but if this isn’t allowed, it should be noted explicitly in the lease agreement.
When a tenant can elicit repairs themselves, some landlords will reimburse then tenant for the costs associated with the repair job. In some cases, this expenditure can result in temporarily-reduced rents or credits. If the property allows this, then the process and regulations for repairing the property should be explained in an in-depth manner in the lease agreement.
When it comes to alterations, one of the most common is adding a lock to a front door in a rental unit. In many cases, this just adds security for a tenant, and it can add some peace of mind. In most cases, this is allowed by landlords, but some also opt to include a provision that prohibits a tenant from changing locks without written permission. In these cases, the landlord may also request a key.
Another popular alteration includes painting the property. In many situations, the property will establish how often the property will be painted, but there also may be established rules allowing the tenant to paint the rental property themselves. In any case, there should be a section that clearly states whether the apartment can be painted in different colors by the tenant, how often the property will be painted by building/property staff, and whether the tenant will have to repaint the apartment before vacating the premises.
Finally, the residential lease agreement needs to firmly establish the rules for changing out light fixtures and appliances. In Illinois, rental properties may update lighting fixtures and appliances from time to time, which can be beneficial to the renter. With that noted, sometimes, a tenant may want to change out the fixtures or appliances that come with the property, so rules for replacing these should be provided in the lease. In some cases, items like refrigerators and lighting fixtures are explicitly forbidden from being replaced by tenants, and if this is the case, then this section needs to state this clearly.
Notice of Entry and Access to the Unit
The state of Illinois requires that a landlord provide at least a 24-hour notice before entering a tenant’s rental property. Additionally, the landlord must also enter during reasonable times, which are considered to be between the hours of eight in the morning and six in the evening. This notice will provide the tenant with ample opportunity to be available for the landlord’s visit. In this situation, the landlord may also be granted key entry by the tenant, which will allow the landlord to enter the unit without anyone being present.
Under these circumstances, the landlord will have to have keys to any supplemental locks that may be installed on the doors. This is also required in many leases so that the landlord can gain access to the rental unit should there be an emergency.
Sometimes, a tenant may move into a unit and may already have a pet or will adopt a pet at some point during their tenancy. There are many pet-friendly properties in the state, but it’s important for landlords to establish pet policies so that there is reduced liability and costs. For example, many properties opt to charge a pet fee that adds a small amount of money to the monthly rent. This pet fee can be used to repair any pet-related damage, which can include deep-rooted odor in carpets, scratch marks on the fixtures, and gnawed appliances.
Additionally, it’s not uncommon for some properties to only allow certain kinds of pets. For example, while a building may be cat-friendly, for liability purposes, this same property may not allow dogs. Also, a property may only allow dogs and cats in certain common areas. There are also properties in Illinois where there’s a hard limit on the number of pets that can dwell in a single unit.
All of these policies will need to be included in a new residential lease agreement so that there can be no confusion with a new tenant that has or wants to bring a pet into their unit. Pet fees can also be collected as a one-time charge if the landlord finds that this is more convenient for renters at the property. It’s also essential for the renter to understand that, unlike a security deposit, the pet fee may not be returned at the end of the tenancy.
Legal Restrictions and Other Rules
Before a lease can be deemed legal, there are several legal restrictions that can come into play. First amongst these are the required disclosures for any rental property in Illinois. For example, any building that was built before the year 1978 may have lead-based paint. Based on both federal and state laws, any landlord that intends to rent out such a property must make the prospective tenant aware of the presence of any of this kind of paint. This is due to the fact that this paint has been deemed hazardous to children and pregnant women.
Additionally, in the state of Illinois, landlords are bound by state law 420 ILCS 46 also to make tenants aware of the presence of radon if any has been detected on the premises. Radon is potentially dangerous gas, but it’s important to note that landlords aren’t required to test for it in the state of Illinois.
Based on state law 765 ILCS 730, if there is a concession granted to a tenant that lowers the monthly rent for that tenant, then the phrase, “concession granted” must be clearly printed in the lease.
In addition to these laws and statutes, rules that are specific to the dwelling should also be included. For example, when it comes to smoking, many properties have varying policies for tenants. In this section of the lease, the specific policies that state where a tenant can legally smoke in the building as well as policies for smoking in the units.
Provisions in the agreement also should be made regarding guests so that the tenant understands the rules. Most properties assert that all guests are the responsibility of the tenant that is hosting them, so any disruptive behavior can affect the tenant’s standing. It’s imperative that a lease agreement reflects this so that there is no future issue with disruptive guests.
One of the most important sections of any form of the lease agreement is the signature because this section binds the two parties together according to the state of Illinois. For this reason, both the signatures as well as the printed names of each party must be included at the bottom of the lease agreement. There may also be additional fields for any other tenants that may be added on. Finally, there should be lines for the date of the lease signing as well.