Illinois HOA Short-Term Rentals

Quick-Reference Table

Last verified: July 17, 2026

Section 1: Overview — Can an HOA restrict short-term rentals in Illinois?

An Illinois condominium or common interest community can restrict or prohibit short-term rentals through its declaration, and because Illinois courts generally enforce validly adopted rental restrictions against existing owners, a properly adopted restriction reaches current owners, not just future purchasers. That's the opposite of the grandfathering-protective posture found in Florida and California.

Two separate statutes supply the framework. Condominiums fall under the Condominium Property Act, 765 ILCS 605,¹ and non-condominium planned communities — townhome, master, and single-family-home associations — fall under the Common Interest Community Association Act, CICAA, 765 ILCS 160,² which exempts the smallest associations, 10 units or fewer or annual budgeted assessments of $100,000 or less, unless they opt in.³ The controlling appellate authority, Apple II Condominium Ass'n v. Worth Bank & Trust Co., holds that a leasing restriction placed in the declaration is presumptively valid and binds existing owners, subject to the restriction being reasonable, not against public policy, and properly adopted.⁶ Illinois runs as a home-rule state that doesn't preempt local short-term-rental regulation; Chicago in particular regulates extensively through its Shared Housing Ordinance.¹⁵ Local licensing and the state and city lodging taxes stand as owner-facing layers that govern the owner-to-government relationship and neither grant nor remove association authority. The sections below lay out the statutory framework, the enforceability of amendments, the local and tax layers, the operational mechanics of adoption and enforcement, and recent legislative and judicial activity.

Section 2: The legal framework for HOA short-term rental restrictions

2A. The two statutes and the source of rental authority

Illinois isn't a Uniform Common Interest Ownership Act state, and its two governing statutes aren't interchangeable. Condominiums — properties created by recording a declaration of condominium that establishes individual unit ownership plus an undivided interest in common elements — fall under the Condominium Property Act, 765 ILCS 605.¹ Non-condominium planned communities fall under CICAA, 765 ILCS 160, which defines a common interest community as real estate other than a condominium or cooperative in which owners must pay for the maintenance of common areas administered by an association, and which expressly excludes master associations from that definition.²

CICAA doesn't apply uniformly. Under 765 ILCS 160/1-75, a common interest community association organized under the General Not For Profit Corporation Act of 1986 and having either 10 units or fewer or annual budgeted assessments of $100,000 or less stays exempt from the Act unless it affirmatively elects to be covered by a majority of its directors or members.³ For an exempt small association, the declaration and the General Not For Profit Corporation Act supply the operative rules. Associations incorporated as nonprofits separately answer to the General Not For Profit Corporation Act of 1986, 805 ILCS 105, for corporate governance matters such as membership voting and board procedure.¹⁷

Within each statute, the declaration is the source of rental authority. The Condominium Property Act recognizes at 765 ILCS 605/18.4(h) the board's power to adopt rules governing use of the property, and at 765 ILCS 605/18(n) it imposes obligations on owners who lease.¹⁰ Importantly, authority over long-term leasing and authority over short-term or transient rentals run analytically distinct: a declaration that addresses "leases" may not, by its terms, reach a transient arrangement structured as a license — a distinction that has proved decisive in litigation, discussed in 2B.

2B. Restricting rentals and the enforceability of amendments

The standard method for adding or strengthening a short-term-rental restriction is to amend the declaration. For condominiums, 765 ILCS 605/27(a)(i) requires an affirmative vote of two-thirds of unit owners to approve an amendment unless the condominium instruments specify a different percentage; Section 27 caps that figure so the instruments may not require more than three-fourths.⁴ For common interest communities, CICAA sets no statutory percentage; Section 1-20 prescribes only the mechanics of amendment — execution, recording, and a mortgagee-consent procedure — so the declaration's own amendment provision controls the vote.⁵

The defining feature of Illinois law sits in the treatment of existing owners. In Apple II Condominium Ass'n v. Worth Bank & Trust Co., the First District Appellate Court held that an owner-approved amendment prohibiting leasing was valid and enforceable, and it rejected the argument that the restriction could reach only future purchasers. The court reasoned that purchasers are charged with knowledge that the declaration is subject to amendment and that, absent a provision preserving the status quo, owners have no vested right in the declaration as originally written. Restrictions placed in the declaration are, in the court's words, "clothed in a very strong presumption of validity" and will be upheld unless shown to be arbitrary, against public policy, or violative of a fundamental constitutional right.⁶ This is the point that separates Illinois from Florida and California, which shield owners who purchased before a rental restriction was adopted. Illinois provides no such general shield.

Two later cases sharpen the mechanics. In Stobe v. 842-848 West Bradley Place Condominium Ass'n, the First District held that where a declaration grants owners a right to lease, a board may not diminish that right by rule; any augmentation or diminution must happen by declaration amendment.⁷ In Wood v. Evergreen Condominium Ass'n, the First District held that an Airbnb transaction can be a license rather than a lease, so a declaration barring "leases" of under 30 days didn't reach it, but a separate prohibition on business or commercial use did bar the short-term rental.⁸ CICAA contains one narrow statutory grandfather: under 765 ILCS 160/1-20(c), if an association that permits leasing amends to prohibit it, a unit owner that's a 501(c)(3) organization already leasing at the time of the prohibition may continue until voluntary sale, with no special fine or penalty.⁵ Beyond that carve-out, Illinois doesn't broadly limit association rental authority by statute; no Illinois analogue exists to California Civil Code 4741 or Arizona Revised Statutes 33-1806.01.

2C. Home rule, Chicago, tax, and the local layer

Illinois doesn't preempt local short-term-rental regulation, and home-rule municipalities regulate heavily. Chicago's Shared Housing Ordinance (Chicago Municipal Code chapters 4-13 and 4-14) requires each shared-housing unit to be registered, subjects hosts who list more than one unit to a Shared Housing Unit Operator's License, and screens every registration against a prohibited-buildings list maintained by the commissioner, a zoning review, and a restricted-residential-zone list.¹⁵ The prohibited-buildings mechanism matters for associations: a building placed on that list can't host lawful short-term rentals, which is how associations obtain government-level enforcement to back up their governing documents. The City of Chicago counted 3,901 active registered short-term rental units as of November 2025.¹⁶ Illinois imposes no statewide short-term-rental licensing regime.

On tax, short-term rentals get treated as hotel accommodations. The state Hotel Operators' Occupation Tax, 35 ILCS 145, applies to the business of renting rooms for periods of less than 30 consecutive days at a rate of 6% of 94% of gross receipts,¹⁴ and Public Act 104-0006, effective July 1, 2025, redefined "hotel" to include short-term rentals and made qualifying hosting platforms responsible as re-renters. As the Illinois Department of Revenue states, "Beginning July 1, 2025, hosting platforms for short-term rentals that meet the definition of 're-renter' are subject to Hotel Operators' Occupation Tax."¹⁴ Chicago layers on a 4.5% Hotel Accommodations Tax plus a 6% shared-housing surcharge — a 4% shared-housing surcharge and a 2% domestic-violence surcharge — for a total City tax of 10.5% on the gross rental charge, before county and state taxes.¹⁶ Accounting for Cook County's 1% Hotel Accommodations Tax and state taxes, the City of Chicago Office of Financial Analysis reports that "the total tax liability, including taxes imposed by other governmental units, for short-term rental units in the City of Chicago is 27.75%," with an annual registration fee of $150, a Shared Housing Unit Operator's License fee of $250, and ordinance fines ranging from $1,500 to $3,000.¹⁶

The critical point: all of this local and tax regulation governs the owner-to-government relationship and neither grants nor removes association authority. An owner who registers with Chicago, obtains a license, and remits every tax may still violate a declaration that prohibits transient rentals; conversely, an association's permission doesn't excuse an owner from local licensing or the hotel tax. The two systems operate in parallel.

Section 3: Operational mechanics and enforcement

Adopting a valid restriction (the tools)

The two common mechanisms are minimum-lease-term restrictions — a bar on leases or occupancies of fewer than 30 days, say — and rental caps, a ceiling on the percentage of units that may be leased at one time. For condominiums, both work best placed in the declaration by amendment under 765 ILCS 605/27;⁴ a cap adopted only by board rule runs vulnerable where the declaration already grants a leasing right, per Stobe.⁷ For common interest communities, the declaration and its amendment provision govern. To be enforceable against existing owners, a restriction must be reasonable, not against public policy, and adopted through the proper procedure; a declaration-based restriction then carries the strong presumption of validity described in Apple II.⁶ Associations may also impose administrative requirements internally, such as owner and tenant registration, lease-filing, and move-in fees, which Illinois courts have treated as permissible administrative rules distinct from restrictions that diminish the underlying right to lease.

Enforcement

Before fining an owner for a short-term-rental violation, the board must provide notice and an opportunity to be heard. For condominiums this comes required by 765 ILCS 605/18.4(l), which authorizes the board, after notice and an opportunity to be heard, to levy reasonable fines for violations of the declaration, bylaws, and rules.¹⁰ CICAA imposes the parallel requirement at 765 ILCS 160/1-30(g).¹¹ These are statutory floors that the governing documents may supplement but not eliminate.

Available remedies are fines, injunctive relief, and liens. Injunctive relief frequently works as the most effective tool against a persistent short-term-rental operator, and Illinois courts have granted injunctions to enforce declaration restrictions. On liens, the two statutes diverge. A condominium association has an automatic statutory lien for unpaid common expenses and fines, plus interest, late charges, and reasonable attorney fees, under 765 ILCS 605/9(g).¹² CICAA creates no statutory lien; a common interest community association's lien and foreclosure authority must arise from its declaration or governing documents.² Association enforcement runs separately from local-government enforcement: in Chicago, the city can pursue its own penalties under the Shared Housing Ordinance while the association independently enforces its declaration, and the two proceedings don't depend on each other.

Section 4: Recent legislative and judicial activity

A. Recent bills

B. Recent appellate rulings

No published, precedential Illinois state appellate or Supreme Court decision issued in the past 36 months squarely addresses rental-restriction enforceability, short-term-rental restrictions, or declaration amendments restricting rentals. The controlling Illinois authorities remain Apple II Condominium Ass'n v. Worth Bank & Trust Co., 277 Ill. App. 3d 345 (1st Dist. 1995);⁶ Stobe v. 842-848 West Bradley Place Condominium Ass'n, 2016 IL App (1st) 141427;⁷ and Wood v. Evergreen Condominium Ass'n, 2021 IL App (1st) 200687.⁸ The most consequential recent decision comes from federal court.

C. Active legislative or local debates

The Illinois Department of Revenue has proposed amending its Hotel Operators' Occupation Tax rule, Section 480.105, to implement Public Act 104-0006's inclusion of short-term rentals and hosting platforms, with a 2026 comment period.¹⁴ Chicago continues to administer and periodically amend its Shared Housing Ordinance, most recently amending the registration provisions in 2025.¹⁵

Section 5: National positioning and related coverage

Illinois occupies a middle position among state approaches to short-term rentals and community associations. Unlike Florida, Arizona, and Idaho, Illinois runs as a home-rule state that doesn't preempt local short-term-rental regulation, so municipalities — Chicago above all — impose their own registration, licensing, and tax regimes. Unlike Florida and California, Illinois doesn't shield owners who purchased before a restriction was adopted; it generally enforces validly adopted rental restrictions against existing owners, with association authority set by the declaration within each statute's procedural requirements. The Chicago Shared Housing Ordinance and the state and city lodging taxes restrain owners and their compliance obligations, not associations. For a multi-state operator entering Illinois, the practical implications run three deep: identify whether a property is a condominium (Condominium Property Act) or a common interest community (CICAA), check the CICAA size exemption for smaller associations, and recognize that a properly adopted declaration amendment will bind current owners.

HOA Weekly's Illinois Short-Term Rentals coverage updates quarterly as the General Assembly, the Illinois Appellate Court and Supreme Court, and home-rule municipalities act. Federal frameworks — the Fair Housing Act, the ADA, the FDCPA, the SCRA, and the OTARD rule — also apply to Illinois associations regardless of the state framework.

Footnotes

1. Condominium Property Act, 765 ILCS 605, Illinois General Assembly ↩
2. Common Interest Community Association Act, 765 ILCS 160, Illinois General Assembly ↩
3. 765 ILCS 160/1-75, exemptions for small common interest communities, Illinois General Assembly ↩
4. 765 ILCS 605/27, amendments to the declaration or bylaws, Illinois General Assembly ↩
5. 765 ILCS 160/1-20, amendment of community instruments (leasing carve-out at subsection (c)), Illinois General Assembly ↩
6. Apple II Condominium Ass'n v. Worth Bank & Trust Co., 277 Ill. App. 3d 345 (1st Dist. 1995) (discussed in 175 East Delaware Place v. Hinojosa, Illinois Courts) ↩
7. Stobe v. 842-848 West Bradley Place Condominium Ass'n, 2016 IL App (1st) 141427 (First District) ↩
8. Wood v. Evergreen Condominium Ass'n, 2021 IL App (1st) 200687 (First District) ↩
9. Mogan v. City of Chicago, No. 22-2801, 115 F.4th 841 (7th Cir. Sept. 20, 2024) ↩
10. 765 ILCS 605/18.4, powers and duties of board of managers (fines at subsection (l); use rules at subsection (h)), Illinois General Assembly ↩
11. 765 ILCS 160/1-30, board powers (fines at subsection (g)), Illinois General Assembly ↩
12. 765 ILCS 605/9, sharing of expenses and lien for nonpayment (subsection (g)), Illinois General Assembly ↩
13. Hotel Operators' Occupation Tax Act, 35 ILCS 145, Illinois General Assembly ↩
14. Illinois Department of Revenue, Bulletin FY 2025-28, Hotel Operators' Occupation Tax Updates for Hosting Platforms for Short-Term Rentals (Public Act 104-0006) ↩
15. City of Chicago, Shared Housing Registrations, Department of Business Affairs and Consumer Protection (Municipal Code ch. 4-13/4-14) ↩
16. City of Chicago Office of Financial Analysis, Aldermanic Request: Short-Term Rental Taxes and Fees (2025) ↩
17. General Not For Profit Corporation Act of 1986, 805 ILCS 105, Illinois General Assembly ↩
18. Illinois Courts, Appellate Court (five districts) ↩