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Author: Mark Ainely | Partner GC Realty & Development & Co-Host Straight Up Chicago Investor Podcast
This week Tim and I broke down where the competing Chicago ordinances stand, why FAIR appears to have more momentum right now, and the Illinois HB3564 changes landlords need to start preparing for before January 1.
And unlike PRO, HB3564 is not something landlords can sit back and wait on. Lease renewals for 2027 are already going out.
Is Chicago Moving Toward FAIR Instead of PRO?
For the first time in a few weeks, neither PRO nor FAIR was on the City Council agenda.
That does not mean the issue disappeared.
Tim shared an update indicating that aldermen are still negotiating behind the scenes, and right now the FAIR language appears to be the document they are working from.
The numbers discussed in the episode were 26 aldermen leaning toward FAIR and 16 toward PRO, with the rest undecided.
That sounds like FAIR has enough support to pass, but there is another wrinkle: the mayor.
We discussed that supporters may be looking for enough votes to overcome a potential mayoral veto rather than simply getting the 26 votes needed for passage. That means negotiations could continue even if FAIR currently has more support.
And the longer this takes, the more unrealistic a January 1 implementation becomes.
Think about everything that would have to change.
Property managers need new procedures. Attorneys need to review leases. Realtor associations need updated forms. Landlords need to understand new disclosures and registrations. Software may need to be updated.
Trying to do all of that in a few weeks would be a mess.
The other concern is enforcement.
We have talked before about Detroit's rental registration program and how difficult it has been to get landlords into compliance. Creating a new department or registration system sounds simple on paper. Actually staffing it, tracking thousands of rental properties, answering questions, and enforcing it is a completely different problem.
So where are we today?
FAIR may have more momentum, but nothing is final.
Until there is a vote and final language, Chicago landlords need to keep watching.
HB3564 Is Coming in 2027
PRO and FAIR are still uncertain.
HB3564 is different.
This is where landlords should already be making operational changes for leases beginning in 2027.
One of the first changes Tim and I discussed is fee disclosure.
Required fees need to appear clearly on page one of the lease.
We also got some useful clarification around the Safer Homes disclosure. The way it was explained in the episode, the Safer Homes document is treated as an addendum, so "page one" refers to the actual first page of the lease rather than the first page of the entire lease packet.
That may sound small, but when you are actually building lease templates, it matters.
The bigger change may be advertising.
If you advertise a rental price, non-optional fees also need to be disclosed clearly. That includes listings on platforms like Zillow or the MLS.
You also need to identify which utilities are included and which are not.
I actually understand the logic behind this part.
A renter should not see a unit advertised at one price, apply, pay money, and then discover a pile of mandatory charges when the lease shows up.
For good operators, transparency should not be a scary concept.
The operational challenge is making sure every listing, every website, every leasing agent, and every lease template is consistent.
Application fees are another major change.
The episode discusses a $50 cap, unless the actual screening cost is higher and the landlord follows the required process for documenting that expense.
Lease renewal and modification fees are also going away.
That already affected us because we begin renewals months ahead of expiration. If we are renewing a lease now that starts in 2027, we have to think about the new rules now, not December 31.
Other restrictions discussed include fees for inspections, move-in or move-out walkthroughs, certain maintenance-related charges, and pest control charges unless the landlord can establish that the tenant caused the infestation.
The lesson here is simple: do not assume the lease you used in 2026 is automatically safe for 2027.
Why This Matters Even More For Small Landlords
The part of HB3564 that worries me most is not any single $50 fee.
It is the compliance risk.
For years, a small suburban landlord could download a lease online, fill in the rent, hand over the keys, and probably survive.
That world is disappearing.
Now you have rules around what fees can be charged, how they are described, where they are disclosed, what appears in marketing, what can be collected during renewals, and what costs can be passed back to residents.
Changing the name of a fee does not magically make it legal either.
If something functions like an application fee, calling it an "administrative processing charge" does not necessarily solve the problem.
The episode also discusses tenants having the ability to pursue civil remedies for violations, including monetary relief, attorney fees, and costs.
That is why landlords outside Chicago should pay attention too.
Chicago landlords are already used to operating in a highly regulated environment.
A landlord in a suburb that historically had fewer rental rules may actually have the bigger adjustment.
This is also where the value of professional management has changed.
Years ago, hiring a property manager was mostly about not taking maintenance calls or showing apartments.
Today, a big part of the job is risk management.
It is making sure the lease is current, the disclosures are correct, fees are handled properly, inspections are documented, notices are delivered correctly, and somebody is paying attention when the law changes.
You can still self-manage.
But if you do, you have to treat compliance like part of the job.
Common Questions
Q: Has Chicago passed PRO or FAIR yet?
A: No. At the time of this episode, neither proposal had received a final City Council vote.
Q: When do the HB3564 changes discussed in this episode begin affecting landlords?
A: The episode focuses on changes taking effect for 2027, which means landlords preparing 2027 leases and renewals need to start updating procedures now.
Q: What is one of the biggest practical changes for landlords?
A: Fee transparency. Required fees need to be clearly disclosed in leases and rental advertising, while several categories of tenant fees are restricted or prohibited.
Show Notes and Timestamps
- 00:25 First frost and Chicago heat reminders
- 01:20 Latest update on Chicago PRO and FAIR
- 02:50 FAIR support versus PRO support among aldermen
- 03:43 Why FAIR supporters may need more than 26 votes
- 04:46 Could a new Chicago ordinance really start January 1?
- 11:17 Breaking down HB3564 for 2027
- 13:44 Lease renewal fees and the first changes already affecting landlords
- 14:28 Required fees on page one of the lease
- 15:17 Rental advertising and mandatory fee disclosures
- 19:38 Application fee limits and other prohibited tenant charges
Key Takeaways
- FAIR appears to have more negotiating momentum than PRO, but neither proposal was final at the time of recording.
- HB3564 is the more immediate compliance issue because landlords are already preparing leases and renewals for 2027.
- Rental listings and leases will require greater transparency around mandatory fees and utilities.
- Small and suburban landlords need to take compliance more seriously because outdated lease templates and fee practices can create real legal exposure.
Guest Information
Mark Ainley
Founder & Partner – GC Realty & Development
Podcast Co-Host – Straight Up Chicago Investor
Tim Harstad
Founder – Chicago Style Management
Because finding good tenants and property management shouldn’t feel like online dating.
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Dear Investor,
If you are an investor in either the city or suburbs of Chicago, I would love to speak with you about how we can help you on your real estate journey. At GC Realty & Development LLC, we help hundreds of Chicagoland real estate owners and brokers each year manage their assets with both full service property management and tenant placement services.
We understand that every investor’s goals are unique, and we love learning about each client’s individual needs. If there is an opportunity to help you buy back your time by managing your rental property or finding quality tenants, please check us out.
Best Investing,
Founder, Partner, Podcast Co-Host, and Investor
