How to Build a Solid Lease in Chicago

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Author: Mark Ainely | Partner GC Realty & Development & Co-Host Straight Up Chicago Investor Podcast

I recently got to jump back on with the Chicago Housing Authority for their 2026 Owner Symposium webinar series to talk about something every housing provider thinks they already have handled: the lease. When I told a few people I was doing a whole session on building a lease, the reaction was pretty much, "Everybody uses the same lease. What is there to talk about?"

On the surface, sure. Most of us pull from the same base template. But the lease itself is only one piece. It is the addendums, the disclosures, the order everything goes in, and the little check boxes that decide who pays for what that quietly get people into trouble. Miss one piece and a routine turnover can turn into a very expensive problem here in the city.

I brought my attorney, Bibek Das of Das Law Ltd., along for this one so we could cover both the operator side and the legal side. Bibek has been practicing real estate law for close to 25 years, and I have worked with him for almost 15 of those. Everything below is written from a City of Chicago RLTO point of view. If your property is in Cook County or anywhere else in Illinois, the rules shift, so keep that in mind as you read.

Here is the full breakdown, plus the best questions that came in from owners during the live Q&A.

Key Takeaways

• A solid lease is not just the lease. It is the lease plus every required disclosure and addendum, in the correct order, with initials or signatures on each one.
• Keeping a tenant "month to month" does not give you extra power to remove them. You still want a signed lease on file no matter what.
• The Summary of Rights for Safer Homes goes on top of the packet as of January 1, 2026, and the tenant signs every page.
• Put every disclosure in your template across the board, even the ones that do not apply to a given unit, so you never miss one based on the situation.
• Chicago will not enforce certain lease clauses even when the tenant signs them. Try to enforce a prohibited clause and the tenant can recover two months of rent plus attorney fees.
• Security deposits carry strict liability. One slip is double the deposit plus attorney fees. The nonrefundable move in fee is the cleaner Chicago standard.
• Renewal notice scales with how long the tenant has lived there: 30 days, 60 days, or 120 days. Do a full new lease packet at renewal, not a one page addendum.
• At the end of the day, the tenant relationship keeps you out of court more than any 80 page lease packet ever will.

What Is Actually Required

A compliant Chicago lease packet comes down to four things:

• The Chicago lease template
• The required addendums and disclosures
• Everything placed in the right order
• Initials or a signature on all addendums and disclosures

That last one trips people up constantly. I see owners staple everything into one big PDF and grab a single signature at the end. If a specific disclosure needs its own signature or initial and it does not have one, that single signature at the back may not protect you. Sign where you are supposed to sign.

The month to month myth

The other thing I hear on a regular basis is, "I am just going to keep my tenant month to month so I can get rid of them whenever I want." That is the wrong way to think about it. Month to month does not hand you any extra ability to remove a tenant, evict a tenant, or control the tenancy. What it usually does is leave you with less documentation, not more.

Whether the term is six months, a year, or a true month to month arrangement, have the tenant sign a lease that lays out everything we are about to cover. The day you have to defend yourself in court, that paper trail is what you lean on. Without it, the other side gets to say you never did what you were required to do, and you can lose the very thing you are fighting for.

The Order of Placement in Your Lease Packet

There is an actual order these documents belong in. Here is how the packet stacks, top to bottom.

1. Summary of Rights for Safer Homes. This goes on top as the first page, no exceptions. It is four pages, the tenant signs every one, and it became a state requirement starting January 1, 2026. It applies statewide, but for your Chicago leases it lives right at the front.

2. The lease itself. Your actual agreement: rent, dates, who pays what, the agreed rules. Do not build your own from scratch and please do not have your brother in law who does divorce work draft one. The best lease you can use is the one the Chicago Association of Realtors (CAR) puts out fresh every single year. It has the required language and the built in initials that cover you on things like building code conformance. Bibek's point on this is a good one: judges are familiar with the standard realtor template, so using it actually helps you if you ever end up in court.

3. Your own addendum. Anything extra you are adding goes right behind the lease and gets signed with it. Pet rules, parking, house rules, move in and move out requirements, how to pay, who to call. Ours runs about three or four pages. More on the rules for addendums below.

4. RLTO summary. The city's official summary of the ordinance, roughly two pages, and it has to include the porch and deck safety warning. Have the tenant initial that they received it. Skip this one and the tenant can terminate the lease and collect $100 from you.

5. Security deposit interest rate summary. The current year's rate on a one pager. Attach it even if you are not taking a deposit. This template updates every January 1 when the city publishes the new rate, usually within the first week or so of the year. It has been roughly 0.01% for about the last 12 years, but you still need the current year on there.

6. Lead based paint disclosure and EPA pamphlet. Technically only required if the building was built before 1978. We keep it in every packet across the board. I have watched owners get dragged into a dispute because a tenant claimed they never received the pamphlet and there was no signature to prove otherwise. Have the tenant initial that they got it and it becomes proof instead of a he said she said.

7. Bed bug disclosure and the city bed bug brochure. This has been required in the city for about ten years. The city's version is English on one side and Spanish on the other. Search City of Chicago bed bug disclosure and you can download it straight from the city site.

8. Heat cost disclosure. Only if the tenant pays for their own heat. You disclose the approximate cost. If you have never paid it yourself, you can pull those numbers from People's Gas or ComEd.

9. Radon disclosure. Newer requirement from a couple years back.

10. Mold disclosure.

11. Recycling information sheet. Basically a one pager. It does not require a signature on the template, but have the tenant initial that they received it anyway.

12. Flood disclosure. This one is worth calling out because it is easy to forget. It came out in 2025 and is required across Illinois. If you have a garden apartment, a single family on a slab or with the lowest floor at ground level, or even a high floor condo with a storage unit in the basement, you owe the flood disclosure.

The theme running through all of this: build one master template that includes every disclosure, even the ones that do not apply to a particular unit. Rent to four tenants without a deposit and you might forget the deposit interest form on the fifth. Put it all in the template and you physically cannot miss it based on the circumstance.

And here is why it matters so much. A lot of these are strict liability violations. Once the cat is out of the bag and the document was not there, you cannot go back and fix it. That is the kind of miss you do not recover from.

Adding Addendums

You are absolutely allowed to add your own addendum. Maybe you have HOA rules, building rules, or a brand new counter or tub that can only be cleaned with a specific product. Put it in writing and have it signed with the lease.

Here is the catch. An addendum is still part of the lease, so the prohibited clause rules apply to it too. There are clauses Chicago law will not enforce even when the tenant signs them:

• Any waiver of an RLTO right or remedy
• Late fees above the cap ($10 on the first $500 of rent, plus 5% of anything above that)
• Termination on sale. Your lease runs with the property. Sell it and the term still applies to the new owner.
• A clause making the tenant pay the landlord's attorney fees
• Jury trial waivers and confession of judgment
• Any clause barring the tenant from making negative statements. You cannot stop a tenant from leaving a bad review.

Try to enforce a prohibited clause and the tenant can recover two months of rent plus attorney fees. The clause is void either way, so you get nothing out of it and expose yourself in the process.

Bibek sees the same failure over and over: owners using ChatGPT or a generic online form to draft a lease. Those tools pull from other states and from commercial leases where a lot of these terms are perfectly negotiable. City of Chicago RLTO is extremely strict, and those provisions simply do not carry over. His read on the attorney fee rule is that the law is deliberately protecting tenants who cannot afford counsel from being buried in costs, which would function almost like a constructive eviction. Whether you love that or not, it is the rule, and the place to push back is with your alderman, not your lease.

Security Deposit vs the Nonrefundable Move In Fee

This is less about how you build the lease and more about a decision to make before you ever hit the market.

Security deposits under the RLTO are strict, unforgiving, and expensive when you slip. A violation is roughly double the deposit plus attorney fees, and those fees are running a couple thousand dollars in negotiated settlements these days. Do the math on a $3,000 unit and one mistake can become an $8,000 problem you cannot get out of.

I learned this the hard way years ago. I came from the suburbs where deposits are normal, moved into Chicago investing, read the rules, and figured as long as I followed them I would be fine. A tenant with a dog moved out, left a couple stains, and I held back $150 for carpet cleaning. She never responded, went and got an attorney, and I ended up paying two months plus attorney fees. The kicker: it was not really about the $150. There was something else off in my lease that gave them the leverage. That was almost 18 years ago and we have had exactly one deposit issue since, mostly because we carry very few deposits at all.

The alternative is the nonrefundable move in fee, and it is the Chicago standard for a reason:

• It is not tenant money. No separate account, no interest, no return.
• You keep the cash up front. Simple books, no 45 day return clock.
• It is cheaper out of pocket for the tenant, which means your unit rents faster.

On the amount, there is no single right number. Compare it to your market. If comparable units in your building or neighborhood are charging a $400 move in fee and you ask for $1,000, you just made yourself less competitive. Read the market and price to it.

The hard line: do not go over 50% of one month's rent. Anything at 50% or higher gets treated as a security deposit, and now you are right back in deposit territory. People commonly land somewhere in the 25% to 45% range.

One heads up from Bibek: this is an ever changing rule. Mayor Johnson has proposals in play that could reshape the move in fee program or even eliminate it, and one version would require you to justify every dollar of the fee with itemized costs. So build the habit now of being able to tie your fee to real administrative costs. What you take away today could change in a month or two.

I broke this whole decision down in more detail here: Security Deposits vs. Move In Fees: Which One Should Chicago Landlords Use?

Lease Renewals

I know we are talking about building a lease, but renewals are where a lot of value lives, so let me plant a flag here.

Notice timing scales with how long the tenant has lived in the unit. This same notice is required before you decline to renew, raise the rent, or end a month to month tenancy:

• Under 6 months in the unit: 30 day notice
• 6 months to 3 years: 60 day notice
• 3 years or more: 120 day notice

Give improper notice and the clock starts over. On a 120 day requirement, that is four months you just reset.

A couple more things people miss:

Re attach both summaries at every renewal. The RLTO summary and the Safer Homes summary go on each renewal, not just the first signing.

The 90 day rule. You cannot force a tenant to commit to a renewal more than 90 days out. Do it anyway and it can cost you one month of rent. You can incentivize an early commitment, but you cannot require it.

Now for my actual encouragement: stop using a one page renewal addendum. Do an entire new lease packet every single time. Here is why. The leases change every year. The addendums change. The required order changes. There are already changes lined up for January 1, 2027 through new state laws. If you always send the most current full packet through DocuSign, you are never out of date and you are never missing a disclosure. Re-give everything, even the lead paint pamphlet and the bed bug disclosure they got last year, so they can never say they did not receive it.

And the reason renewals matter this much? Turnover is what kills you, not day to day maintenance. A turn runs 40 to 60 hours between the work and the re rent, plus potentially a full month of commission if you use a realtor. Keeping a good tenant in place is the whole game.

Yes, all of this is why a Chicago lease packet has ballooned from six or seven pages years ago to well over 60 or 70 pages today. A small number of bad actors created the need for everything to be in writing, and now all of us live with the 80 page packet. It covers you. But it is not the thing that actually keeps most tenants from suing you.

Tenant Relationships Trump Everything

The best lease protection I know is a good relationship. A few principles I keep coming back to:

• Human connection goes a long way.
• Being responsive builds trust.
• People respect your property when they respect you.
• Do not hide behind a text.
• People do not remember what you said, they remember how you made them feel.

We run a phone first company on purpose. A cold text might be technically correct and still land wrong, and a tenant who feels brushed off is more likely to call 311 or go talk to an attorney. Pick up the phone. Sometimes the tenant does not even want anything, they just want to feel heard, and your tone does more work than the words.

Think about the studies on doctors. The physician with the better bedside manner, the one who takes a few extra seconds and shows a little empathy, gets sued far less than the brilliant but cold one. Same idea here. A lot of you can honestly say your tenants would never sue you, and you are probably right, because you are responsive, you take care of the property, and you have built real trust.

Two more pieces that support all of it. Screening is huge, and it carries its own risk now with fair housing and source of income rules. I have seen owners get in trouble recently for source of income issues around Section 8. If you want the full playbook on doing it right, grab our guide: Mastering Tenant Screening in 2026: A Chicago and Suburbs Leasing Guide. And build your team. The book Who Not How by Dan Sullivan and Benjamin Hardy nails it: you do not have to be the person who solves every problem. If a turn is going to eat 40 to 60 hours, hire that out. If you do not want to wrestle an 80 page packet, pay a trusted realtor to lease it. This is Chicago. Have a guy for that.

Frequently Asked Questions

These came straight from owners during the live Q&A. Quick reminder from both of us: this is general guidance, not legal advice, and every situation is different. When in doubt, talk to an attorney.

Are digital leases and e signatures safe, or should I use hard copies? Digital is the way to go. A traceable platform like DocuSign timestamps the signature, cannot be easily mimicked, and lets you prove exactly when the tenant signed. Hard copies are fine in the traditional sense, but scan everything and keep a digital copy, because the day a matter goes to court you will be asked to produce the lease and every addendum fast. As Bibek put it, digging up a paper lease from 20 or 30 years ago is a bad position to be in. We say it around here: hard copy is just hard to figure out. We have even had Uber drop off a lease and pick it back up rather than lose days to scheduling.

What are the rules on nonrefundable move-in fees? The rules came out of the courts. Some landlords were relabeling a security deposit as a move in fee for the exact same dollar amount just to dodge the deposit rules. A judge essentially said if it walks like a duck and quacks like a duck, it is a duck, and that landlord got hit with a deposit violation anyway because they could not tie the money to anything. The takeaways: keep it under 50% of one month's rent, do not creep up to the line, and be able to associate the fee with real hard costs. That last part matters even more given where the proposed law seems headed.

I collect first and last month's rent plus a move-in fee. Is that a problem? Watch the last month's rent piece. Anything held or due more than six months out can be treated as a security deposit, which drags you right back under deposit law. It is not excessive from a "cover yourself" standpoint, but you can get tagged for it. And even on a month to month or oral lease, you still owe all the RLTO disclosures.

Does the CAR template include all the required disclosures and pamphlets? Whoever provides you the CAR template should be able to hand you the addendums too. Every city requirement is also posted on the City of Chicago website, so you can cross reference and pull anything you are missing.

Can you explain the late fee formula again? In Chicago it is $10 on the first $500 of rent, plus 5% of any amount above $500. You can charge less, never more. A few examples:

• $500 rent: $10
• $1,000 rent: $35
• $2,000 rent: $85
• $3,000 rent: $135
• $3,500 rent: $160

Two notes. Cook County uses a similar structure but at $10 on the first $1,000 plus 5% above that. And for a Section 8 tenant, you can only charge the late fee on the resident's portion, so if their portion is $500 or less the late fee never exceeds $10.

If a partial payment comes in, is the late fee based on the balance or the full rent? Full rent, except for Section 8, where it is only the tenant's portion.

My 12 month lease is ending and I want to go month to month. Do I need a new lease? No. The existing lease carries over month to month on the same terms. Rent stays the same, the deposit handling stays the same, nothing is null and void. You still have to give proper notice (60 or 120 days depending on tenancy length) to raise rent or end it. To actually change any term, you need an express written modification signed by both parties. State law defaults you to month to month if you do nothing and keep collecting rent.

On a month to month, do I have to give a reason to end the tenancy? As the law sits, no. But human to human, give one. When you leave the reason blank, people fill it in themselves and it is rarely something positive. Also be very aware of the Illinois Retaliation Act. If a tenant filed a stack of work orders, you had words, and a nonrenewal shows up a month later, they have a real argument that you are retaliating. Worth looking up.

Can I make the tenant pay for bed bug extermination? In multifamily, no, you cannot push it onto the tenant unless they raise their hand and admit they brought them in, which does not happen often. If the lease itself says it is the landlord's responsibility, then it is the landlord's responsibility. Single family may have a bit more leniency, but check the specific lease.

Can a tenant apply their security deposit to past due rent? Only if you agree to it, and get it in writing. Technically they are still supposed to pay rent, but you can agree to apply the deposit. We did exactly this for a slow paying tenant around the holidays: returned the deposit, had her sign off, and applied it to December rent. It helped her and it cleaned up our exposure. Just document it.

What are the rules on the appliance and utility section of the lease? This is one of the most disputed and most messed up parts of the whole packet. The CAR lease has check boxes on the first couple pages for who is responsible for appliances, lawn, garbage, and utilities. I have personally missed a check box and ended up covering a gas bill I never meant to. Fill those out accurately. And if a tenant wants to bring in their own fridge or washer mid lease, that is a modification of a written contract, so both parties have to sign and agree. If you as the landlord know about it and do not object, you have essentially acquiesced. If you still show as responsible for repairs under the lease, you are still on the hook.

Can I remove a utility or appliance from an existing lease? Not unilaterally. You have to honor the current lease for its term. Mid lease, you need an express written amendment signed by both parties, and the tenant does not have to agree. It becomes a negotiation, and they may ask for a rent reduction in exchange. One CHA specific note: if you stop providing a stove or fridge, CHA will lower your rent determination accordingly.

Is there a required form to itemize move out damages, and how do I send it? There is no single official template, but the timing is firm if you hold a deposit: itemized list to the tenant within 30 days, money back within 45 days. Line item everything with receipts or evidence. Do not send a lump sum "$1,800 for damages." Spell out the broken window, the door, whatever it is. If a tenant refuses to give a forwarding address, email it, send it to the last known address, and document every attempt. A tenant cannot manufacture a notice problem by refusing to give you an address. We send a final accounting within about 7 to 10 days and give tenants a link to contest anything, which often heads off a bigger fight.

Is the Main Street Association of Realtors lease okay to use? CAR covers Chicago. Main Street covers most of the suburbs and is what you would use for a non Chicago, non Cook County property. Every realtor board lease states plainly at the top whether it is for Chicago use or not, so just make sure you are grabbing the right one.

I inherited leases with errors, like miscalculated late fees or a security deposit I do not want to hold. Am I now liable? On late fees, we just correct them going forward. On an inherited deposit, we educate the owner, then encourage returning the deposit in full with the tenant signing a waiver. That said, strict liability is real: if the prior owner never paid interest, returning the deposit does not cure the violation that already occurred. That is why, as a property manager, you want a hold harmless and indemnification agreement with the prior owner or manager. And resolve it fast, ideally with proper paperwork drafted by an attorney.

Are there rules on credit check fees? Two things. Starting January 1, 2027, a state law caps the fee at $50 unless you can prove it cost you more. Separately, a law from last year says if an applicant brings you a credit report from one of the three major bureaus dated within the last 30 days, you cannot charge them for a report. It does not mean you have to use their report. We still run our own screening and eat that cost because of fraud risk, but we do not bill them for it. We charge $65 today, dropping to $50, with a reduced application for anyone who brings their own report.

Is a 10 day termination notice worth it, or should I just do cash for keys? A 10 day notice is a non monetary notice, and honestly it is hard to win in court. In our world it is more of a "we are serious" signal that gets the tenant to the negotiating table. Document three to five real attempts to get the behavior to stop before you serve it. Sometimes a voluntary move out like cash for keys is the cleaner path. The notice is leverage for a real conversation more than a guaranteed eviction.

Don't Go At This Alone!

Building a compliant Chicago lease packet, staying on top of renewals, and handling security deposit and move-in fee rules correctly is a lot to carry, especially when the laws keep moving every January 1. That is exactly what our team at GC Realty & Development does every day. We manage roughly 1,500 units across Chicago and the suburbs, and we keep our lease templates, disclosures, and renewal processes current so our owners never have to worry about a strict liability miss.

My mission is simple: to help housing providers buy back their time and lower their risk, so owning rental property in Chicago feels like the wealth builder it is supposed to be instead of a second job full of landmines. If a compliant lease and a smooth renewal process would take real weight off your plate, let's talk.

A special thank you to Bibek Das of Das Law Ltd. for joining me on this one and sharing the legal side. And thank you to the Chicago Housing Authority for having us back for the 2026 Owner Symposium.

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