No tenant wants to open their mail to find a rent increase letter telling them that the landlord intends to increase the rent at lease renewal, but landlords shouldn't procrastinate if they intend to do so. You should let your tenants know as soon as you have decided to raise the rent so that they, in turn, can decide whether they’ll be renewing the lease. And if your unit is regulated by the CRLTO, the law requires that you provide a certain amount of lead time for your tenants.
In July 2020, in an effort to create more housing stability for renters, the Chicago City Council adopted the "Fair Notice Ordinance." This notice requires landlords to provide more time to tenants before lease termination if the landlord intends to increase the rent or to withhold a lease renewal. Specifically, tenants who have occupied a rental unit for three or more years are entitled to 120 days' advance notice of rent increase or termination letter; tenants who have occupied a unit for six months but less than three years are entitled to 60 days' notice, and tenants of less than six months are entitled to 30 days' notice. Consider utilities, too – if the current lease provides that any utilities are included in the monthly rent, but you intend to transfer responsibility for utilities to your tenant at lease renewal, you need to give 30 days’ notice of that change, too (see Illinois Rental Property Utility Service Act, 765 ILCS 735/1.2). Note that the Fair Notice rules apply even if there is no written lease.
What if you don't intend to renew the apartment lease as a landlord?
In Chicago, if the landlord fails to provide the minimum notice of non-renewal or notice of increase required by the Fair Notice Ordinance, the tenant may remain in the unit for up to 60 days (for tenants who have occupied the property for at least six months but less than three years) or up to 120 days (for tenants who have occupied the property for at least three years), and subject to the terms and conditions of the lease prior to the delivery of the notice from the landlord. In other words, if the landlord fails to provide the written notice in a timely manner, the tenant may opt to extend the lease for the entirety of the required notice period, even if the termination date of the lease passed. The details can be found in Section 5-12-130(j) of the Chicago Residential Landlord Tenant Ordinance.
So, don’t be late in sending the rent increase letter! But if you choose to let your tenants know early, which you certainly can do, remember that you can’t ask them to renew until 90 days before the lease terminates. The Chicago Residential Landlord Tenant Ordinance states that “no tenant shall be required to renew a rental agreement more than 90 days prior to the termination date of the rental agreement.” Chicago Municipal Code Section 5-12-130(i).
Summary of the CRLTO