7 Illinois Rules That Change the Day a Homeowner Rents Out Their Basement

The day your tenant signs the lease, you’re a landlord.

That title comes with duties, and some of them start before anyone moves in.

Here’s what Illinois homeowners need to sort out before they rent out their basement.

Note: This is general information, not legal advice. Property laws and local ordinances are subject to change.

1. Smoke Detector Act

The Smoke Detector Act makes you, as the owner of a structure, responsible for supplying and installing every smoke detector a basement rental needs.

Each dwelling unit needs at least one approved detector in working order within 15 feet of every room used for sleeping.

Your tenant has to test the detectors and replace the batteries.

But you have to make sure those batteries work on the day your tenant takes possession.

A willful failure to install or maintain a required detector is a misdemeanor.

Tampering is worse.

Anyone who removes a detector’s battery, outside of inspection, maintenance or replacement, faces a more serious misdemeanor charge on a first conviction and a felony on a second.

2. Carbon Monoxide Alarms

Your basement rental needs a second device, a carbon monoxide alarm.

The Carbon Monoxide Alarm Detector Act makes you, as the owner, supply and install every alarm it requires.

Section 20 of the Act exempts some units, including those in a building that burns no fossil fuel for heat, ventilation or hot water and has no garage connection.

The exemption also turns on the local building commissioner finding that the unit sits away from any source of carbon monoxide.

That call isn’t yours.

Without an exemption, an approved alarm in working order has to sit within 15 feet of every room used for sleeping.

Willfully failing to install or maintain a required alarm is a misdemeanor.

Your tenant, for their part, has to notify you in writing of any problem they can’t correct.

3. Radon Disclosure for Tenants

The tenant rules in the Illinois Radon Awareness Act began on January 1, 2024, and they start with a state guide.

The guide is the Illinois Emergency Management Agency’s “Radon Guide for Tenants.”

You give it to your tenant at application, before you and your tenant sign a lease, or whenever your tenant asks.

You also hand over any radon records that show a hazard, plus a state disclosure form.

Then your tenant gets 90 days from the start of the lease to run a radon test.

If the result tops the level the state recommends acting on and you decline to reduce the radon, your tenant may end the lease.

Your tenant can walk.

The agency’s page says these duties cover units below the third story, so a basement unit falls under them.

4. Security Deposit Return Act

The deposit you collect when a basement tenant moves in falls under the Security Deposit Return Act.

To keep any part of the deposit for damage, you have to send your tenant an itemized statement within 30 days of move-out, with paid receipts or copies attached.

If you skip the statement, you have to return the full deposit within 45 days.

A court can order you to pay twice the deposit, plus court costs and attorney’s fees.

The penalty applies to a landlord who refused to supply the statement or supplied it in bad faith.

That landlord also has to have failed or refused to return the deposit within the time limits.

The Act, as amended by Public Act 103-224, the law that took effect January 1, 2024, covers any landlord of residential property who has received a security deposit.

That includes you.

5. Chicago’s Rules for Owner-Occupied Buildings

Chicago’s Residential Landlord and Tenant Ordinance excludes dwelling units in owner-occupied buildings of six units or fewer, a category that includes a basement apartment in the house where you live.

Two of its provisions still apply, though, to every rented unit in those buildings.

Section 5-12-130(j) requires you to give written notice before you refuse to renew.

Under Section 5-12-160, you can’t change the locks, block an entrance or cut off services such as heat, water and electricity to push your tenant out without legal authority.

Fines run $200 to $500, and each day counts as a separate offense.

That adds up fast.

Your tenant can also sue for possession plus damages of up to two months’ rent or twice the actual damages, whichever is greater.

6. Tenant Utility Payment Disclosure Act

Billing a basement tenant a share of master-metered utility service comes with paperwork under the Tenant Utility Payment Disclosure Act.

Master-metered means one meter feeds more than one unit.

Suppose one electric meter feeds your house and the basement, and the monthly bill is $200.

A proportionate share is your tenant’s slice of that bill, which would be $100 if you split it evenly.

Here’s the catch.

If your lease has your tenant pay a proportionate share of that bill, you can’t demand payment until you give your tenant the formula in writing.

Your formula has to include everyone who uses that service.

Differences in apartment size or usage can shape each share.

If your tenant asks, you also have to hand over a copy of the utility bill for any billing period you’re charging for.

There’s a simpler route: Section 5 of the same Act still lets you rent a basement at one price that includes utilities and doesn’t break out their cost.

7. Cook County’s Residential Tenant Landlord Ordinance

Cook County’s Residential Tenant Landlord Ordinance (RTLO) covers rentals in suburban Cook County, not Chicago.

Its anti-lockout provisions took effect in January 2021, months before the rest of the ordinance, and they reach every rental unit.

That means you can’t change the locks on a suburban basement tenant, even in an owner-occupied building.

No exceptions.

Your tenant’s protection against a lockout doesn’t depend on that exemption.

The rest of the ordinance went into effect on June 1, 2021, and it exempts owner-occupied buildings with six units or fewer.

Outside that exemption, the county caps a security deposit at 1.5 times the monthly rent, so $1,000 rent means a deposit of no more than $1,500.

Chicago’s Additional Dwelling Units Ordinance

Chicago’s Additional Dwelling Units Ordinance, which covers basement conversions, became permanent on April 1, 2026, after a pilot that covered a smaller share of the city.

Chicago Cityscape’s guide says the ordinance lets you build a basement unit outright in the city’s multi-unit residential, business and commercial zoning districts.