Write Late Fees into the Lease
If you’re looking to charge a late fee in Illinois, write it into your lease! Charging a late fee without mentioning it in your lease agreement is illegal.
A good late fee clause should cover:
- When the rent is due
- When the late fee takes effect (grace period)
- Late fee amount
- Whether this is a flat fee or a daily fee
In all cases, be sure to follow your state and local laws regarding late fees. Even if you write it into your lease agreement and have it signed by your tenant, an illegal late fee will not hold up in court.
Related: Late Fees in Texas
Illinois Laws for Late Fees
Let’s take a look at late fee limits and grace periods for Illinois.
How much can a landlord charge for late fees in Illinois (not Chicago)?
Outside of Chicago, Illinois landlords can charge a maximum flat fee of $20 or 20%, whichever is more, for each rental period.
Is there a required grace period in Illinois (not Chicago)?
Yes. Outside of Chicago, Illinois has a mandatory five day grace period. This means a landlord cannot apply a late fee until five full days after the due date have passed.
For example, if rent is due on the 1st with a five day grace period, a landlord may not charge a late fee until the 7th.
Additional Expenses (Including Chicago)
According to Illinois law, if a landlord incurs other “reasonable expenses” from late rent, the tenant can be charged for these expenses on top of the late fee. Any expenses charged to the tenant must be included in an itemized list made available to the tenant.
Related: Late Fees in Washington D.C.
Chicago Laws for Late Fees
The legal cap for late fees is lower in the city of Chicago compared to the rest of Illinois.
How much can a landlord charge for late fees in Chicago?
Chicago landlords may charge $10 per month for rents $500 or under.
If rent exceeds $500, an additional 5% late fee may be charged on the amount that exceeds the $500 limit. Note that this 5% is a flat fee.
For example, if rent is $1000, Chicago landlords may charge:
- A $10 late fee on the first $500 portion of rent
- An additional $25 late fee on the remaining portion (5% of $500)
So, for a $1000 rent, the total permissible late fee in Chicago would be $35 per month.
Related: Set the Right Tone with Late Fees
Is there a required grace period in Chicago?
Chicago does not have any language regarding grace periods. In this case, it’s best to follow the state’s requirements and allow a five day grace period.
The amount of late fees a landlord in Illinois can charge depends on the location, as Chicago has different laws from the rest of the state. In all cases, it’s crucial to include the proper late fee language in your lease.
To add late fees to your lease and enforce them automatically, consider using the Tellus superapp, a free property management app. Easy online payments mean more tenants pay on time.