Verella’s Round-Up: The New Illinois Public Act 102-0896, Effective Jan. 1, 2023
- Details
- Category: Latest News
- Verella Osborne, President, Legal Document Management, Inc.
- Fall, 2022
For some time, housing providers in Chicago and Cook County have been required to consider applications that show “source of income” from sources not directly related to wages. However, the recent passage of House Bill 2775 – which extends “source of income” as a protected class across the entire state of Illinois beginning on the first day or January 2023 – will have a much larger impact on housing providers elsewhere in Illinois who will have to adjust their requirements to reflect this new mandate and will no longer be able to reject a potential tenant solely on the basis of their work history or wages.
Two other amendments were also proposed with HB 2775 but not included with the current legislation. I would not be surprised if these amendments got reintroduced next year. If that happens, this legislation would make even more dramatic changes to the rental housing industry in Illinois.
- The first of these amendments pertains to the Homelessness Prevention Act and attempts to “reduce undue administrative burden in the application process” by both housing providers and tenants who seek rental assistance. This amendment does not specify how this will be accomplished.
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The second amendment is the one to watch, and could have the most dramatic impact on housing providers in the state. This amendment pertains to the Eviction Article of the Code of Civil Procedure and would allow tenants an automatic affirmative defense in cases where the eviction is based on non-payment of rent – even in cases where the housing provider is not suing for rent!
This amendment would mandate that housing providers complete any rental assistance application offered by a government or social services agency. Failure do to so would trigger an automatic legal affirmative defense to the eviction. The only way to overcome this defense would be to prove to the court that the rental assistance application imposed a “significant administrative burden” on the housing provider to cooperate with the application process.
The Bill does not list “financial burden” as a defense, and “administrative burden” is almost impossible to prove. Housing providers can only overcome the tenant’s affirmative defense by proving that the tenant would not have been approved for the assistance. In essence, the state wants to prohibit ANY eviction based on non-payment of rent (i.e. 90% of evictions) unless the housing provider has first applied for rental assistance which could easily result in months of additional delay. As we well know, the eviction process in Illinois is already far longer and more cumbersome than in most other states. This is also at a time when much of the emergency funding has dried up and most of the agencies refuse to accept an application unless the tenant is at least three months delinquent in rent, adding another significant financial loss for housing providers.
To overcome this legal defense, housing providers would have to consider terminating tenancies for reasons other than non-payment of rent, or serve a 10-day notice for breach of lease that would include non-payment of rent as only one of several breaches.
If there is a silver lining, neither of these amendments currently appears in HB 2775. But that is not to say that these amendments won’t be back.
Focusing on the “source of income” provision which has been approved, it is important that housing providers understand what is meant by “source of income” and how to protect themselves against actions alleging that such discrimination has occurred.
“Legal” non-wage sources of income include subsidized rent portions, SSI, unemployment payments, public aid, food stamps, child credit, child support, alimony or any form of government or charitable subsidy. (Are cash payments illegal income if they’re not reported on a tax return? Should housing providers now start requesting copies of tax returns to identify and quantify “legal income?”)

Source of income is defined in the Act as “the lawful manner by which an individual supports himself or herself and his or her dependents.” (Take note of “lawful” – it will be useful.)
It is a civil rights violation for anyone (including brokers or salesmen) who engages in a real estate transaction to discriminate against a person’s source of income, in any manner whatsoever, including altering the terms or conditions of a contract or furnishing services in connection with the transaction; refusing to receive or transmit a bona fide offer; refusing to negotiate for a real estate transaction; alleging property is not available to a person for inspection, sale, rental or lease when it is available or failing to bring a listing to the attention of someone, or refusing to inspect the property. It is also illegal for any written document at all (advertisement, application, sign, notice, etc.) to be printed, posted, mailed or published that indicates any preference or limitation of unlawful discrimination based on source of income.
Please check all of your rental ads, listings, applications and, in particular, the written rental criteria required to be disclosed to each applicant in Cook County, to ensure you comply with this provision. Specifically, you should scrutinize leasing agencies and online applications to ensure they ask for “all sources of income” and itemize options under that heading.
The Act makes it a civil rights violation to stipulate any income ratio criteria that would automatically disallow a subsidized tenant (a highly ambiguous requirement).
The law does exempt housing providers who rent units in two to four-unit buildings in which they are also the owner-occupants. In all, there are twelve exempt categories, most of which will not apply to the members of the Rogers Park Builders Group. For more information on these exemptions, please contact my office.
Some crucial provisions mentioned in the Summary of the Bill, which would have significantly affected all decisions regarding rental or sales of real estate, are missing in the final Act passed but may be re-introduced. These are:
- If a housing provider requires a tenant to have a certain threshold level of income, the housing provider must subtract any subsidized source of income (e.g. Sec. 8) from the total of the monthly rent prior to calculating if the income criteria is met. This calculation is currently one of the most common financial criteria stipulated for rental approval in most applications and this is one of the most common questions I receive – do I consider the subsidy as part of an applicant’s income. Legally speaking, the answer is “yes.”
- A housing provider cannot apply an income/asset requirement to a non-wage source of income that he doesn’t apply to all applicants. This is something you should not be doing even now, as it constitutes discrimination.< Finally, it is not just written material that is governed by this law. Inappropriate telephone calls constitute a civil rights violation. I anticipate that tenants’ rights organizations will start an immediate telephone campaign to see if “you rent to Section 8 tenants.” Train your staff to always answer: “I rent to anyone who meets my rental criteria. Come and see the property and, if you’re interested, complete an application.”
Finally, it is not just written material that is governed by this law. Inappropriate telephone calls constitute a civil rights violation. I anticipate that tenants’ rights organizations will start an immediate telephone campaign to see if “you rent to Section 8 tenants.” Train your staff to always answer: “I rent to anyone who meets my rental criteria. Come and see the property and, if you’re interested, complete an application.”
Some applicants will request a copy of your rental criteria. As you are required in Cook County to make this available to all applicants BEFORE they submit an application, I strongly advise that you have one available to email to applicants. This new law will require that many housing providers who have not registered their building for federal subsidy will have to do so because you will have applicants with non-wage income who meet your rental criteria. Of course, many of them will not meet your criteria for credit record or FICO score, total household legal income to rent monthly ratio, civil judgment and eviction history, housekeeping inspections, etc.
When you’re reviewing your current rental criteria for applicant approval, just remember that the criteria must be applied to ALL applicants, so leave room for judgment, e.g., don’t stipulate a specific FICO score. Instead, put in a range. Don’t stipulate “no” accounts in collection. Make it no more than “x-number” of occurrences. You may stipulate no evictions filed or no eviction judgments. More housing providers may now require a current housekeeping inspection of applicants, etc. Just ensure that whatever your approval requirements are, they are applied to every single applicant – regardless of source of income.