City of Chicago Vacation Rental License

Effective January 1, 2011, the City of Chicago has enacted a new business license to regulate daily/weekly rentals.  The lawmakers at the City of Chicago probably had this one in mind when Chicago was in the running for the Olympics.  This law will not affect “traditional” landlords, but will affect many people who rent out their real estate for short periods of time.

The Ordinance is located at Chapter 4-207 of the Municipal Code of Chicago and applies to “Vacation Rentals”.  The Ordinance defines a Vacation Rental as a dwelling unit with up to six sleeping rooms that are available for rent or for hire, for transient occupancy by guests which are not owner-occupied.

There is a limit of six dwelling units per building which can be licensed as a vacation rental at the same time.

The ordinance excludes: (1) single room occupancy buildings; (2) bed and breakfasts; (3) hotels; (4) month to month tenancies; and (5) corporate housing.

In order to obtain the license, an applicant must pass a Department of Zoning board review, an inspection by the Department of Buildings, and file an application with the Department of Business Affairs and Consumer Protections.  The license fee is $500 per location and is renewable every two years.

Finally, the City of Chicago amended the Hotel Accommodations tax eliminating the previous seven unit minimum in effect before a property would be considered a hotel accommodation, meaning that all vacation rentals are now subject to the City of Chicago’s 3.5% Hotel Accommodations Tax.

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8 Responses to City of Chicago Vacation Rental License

  1. Terry says:

    If a friend or relative is allowed to stay in your house, (empty house) with no rent and only pay the utilities that they use, are you considered a landlord or a good person? If you ask them to leave and they will not, can you give notice and then move their stuff onto the curb and change the locks? What other recourse do we have…

    • Richard Magnone says:

      Terry, without knowing more facts, I can’t provide you an answer that is “legal advice” (keep in mind, we don’t represent you at this time). In general, a property owner who let’s a person occupy a property, with or without a written lease, and with or without the payment of rent can certainly find that the occupant can correctly assert the claim that a “tenancy” was created. If there is a tenancy, then the local police will certainly not remove the occupant as a trespasser and a landlord could get in serious trouble for forcibly evicting a tenant, a tenant’s possessions, or changing the locks. A landlord who does that can be held responsible for an illegal lockout and/or wrongful eviction – nothing to mess around with. Because the property owner allowed the occupant in, the only lawful way (other than voluntary turnover of the real estate by the occupant) to remove the occupant is with a court order from a judge and enforcement of the order by the County Sheriff. Property owners need to be very careful about who they let into their property and under what circumstances because this exact situation can become a real nightmare.

  2. tavares says:

    Can a evition notice be left on the door step

    • Richard Magnone says:

      Not usually. The FED statute provides three methods of service and that is not one of them. I have blogged on this topic in the past and it might be possible (although not advised) to have service by alternative means if the tenant admits receipt (not something a landlord can usually count on and something that is highly dependant on the judge hearing the case). Every fact situation is different. Consult with and hire a lawyer before acting!

  3. Richard says:

    I have been hosting guests in the spare bedroom in my condo through the website called AirBNB.com. The guests do pay a nightly fee to stay however I am an owner occupier and have been present and living in the condo throughout all the stays. Do I need a license for this?

    • Richard Magnone says:

      I don’t know where the property is or what the local laws are there. Best to check with your local municipality or governmental unit where the property is located.

  4. Diane says:

    If a renatl property advises that it has a renatl licnce is there a way I can check online
    #*******. The number provided has 7 numbers