A rental license is a must if you are a landlord in Cook County and surrounding areas.

Here’s everything you need to know about getting a rental license.

What Is a Rental License?

A rental license is a permit that landlords must obtain to legally rent out their properties. It ensures that rental units comply with local housing codes, health, and safety standards. A rental license acts as a safeguard for both landlords and tenants by maintaining property quality and protecting against issues like overcrowding and unsafe living conditions.

But not everyone needs a rental license. 

Who Needs a Rental License?

In Chicago, landlords don't need a rental license—unless they're running vacation rentals. For short-term stays like those on Airbnb, you need a Shared Housing Unit Operator License (SHUOL), which costs $250 and lasts 2 years. For whole properties rented as vacation homes, a Vacation Rental License is required, costing $500 per unit and also renewable every 2 years. 

But in Cook County, which covers many Chicago suburbs, landlords with buildings of four or more units need to get a Residential Rental License under the Rental Dwelling Ordinance. Check the Housing Authority of Cook County’s website to see if your property’s suburb falls under this rule.

Additionally, specific suburbs like Evanston, Oak Park, Skokie, Des Plaines, Arlington Heights, and Mount Prospect have their own rental license ordinances. 

Why Is a Rental License Important?

The primary goal of requiring a rental license is to protect tenants and ensure that rental properties meet basic health and safety standards. It helps municipalities monitor compliance with building codes, health regulations, and local zoning laws. For landlords, maintaining a rental license shows a commitment to providing a safe and livable environment for tenants, which can help reduce tenant complaints and legal issues down the road.

A rental license also contributes to maintaining community standards. By enforcing habitability regulations, local governments can prevent issues like overcrowding, property neglect, and safety hazards. This, in turn, keeps neighborhoods stable and attractive, which benefits both property owners and residents.

Steps to Obtaining a Rental License

A rental license is renewed yearly and isn’t transferable—you can’t sell it or move it to another suburb. You’ll need to apply personally, not through an agent.

The process of securing a rental license varies depending on your location, but generally follows these steps:

1. Submit Your Application

You’ll need to fill out and submit an application, typically available through your local government or village website. Be sure to check for the most up-to-date information and requirements specific to your area. 

2. Attend Mandatory Seminars

Some suburbs need you to attend a seminar before your rental application gets approved. For example, in Skokie, you must complete the Village Residential Rental Property Landlord Seminar within three months of registering. And in Des Plaines, you must attend the certification seminar of the Crime Free Multi-Housing Program. Here, the Des Plaines Police Department equips landlords with essential tools to screen tenants effectively, reduce crime, and maintain safer rental properties.   

3. Pass a Property Inspection

Once you’ve submitted your application, your property will need to pass an inspection. Inspectors will evaluate the following areas:

• Structural Integrity: Inspect for foundation cracks, wall damage, and roof leaks.

• Plumbing: Check water pressure, leaks, hot water heater, and drainage.

• Electrical System: Check for properly installed wiring, functional outlets, switches, and lighting.

• HVAC System: Ensure that heating, cooling, and ventilation systems are in working order.

• Safety Features: Verify that smoke and carbon monoxide detectors are installed and operational, and that fire extinguishers are available.

• Maintenance and Sanitation: Ensure windows and doors function properly, and that the property is clean and well-maintained.

• Local Codes: Confirm that the property complies with local building codes and zoning laws.

Fix any issues promptly to avoid fines or a notice to vacate.

4. Pay the Rental License Fee

The cost of a rental license varies by location and property size, ranging from $25 to $300. Licenses are renewed annually or biannually. If you fail an inspection, you'll need to reapply and pay for a re-inspection. 

Once everything checks out, your rental license will be issued.

Conclusion

Not every Chicago neighborhood requires a rental license, but if you're in Cook County or the suburbs we’ve covered, you’ll need one. It’s not just paperwork; it’s your commitment to quality and integrity.

While the process of obtaining a rental license may seem like extra paperwork, it’s an essential part of being a responsible landlord. Not only does it keep your property compliant with local laws, but it also ensures that you’re providing a safe and healthy living environment for your tenants. Maintaining a rental license can also help you avoid costly fines, legal disputes, and potential damage to your reputation as a landlord.