Illinois General Assembly - Full Text of HB4387

LRB104 17495 JRC 30921 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB4387

Introduced 1/14/2026, by Rep. Jed Davis

SYNOPSIS AS INTRODUCED:

New Act

Creates the Corporate Ownership of Residential Property Act. Provides that, beginning January 1, 2027, a company to which the Act applies is prohibited from owning more than 500 residential properties in Illinois, including residential property held by affiliated entities or persons. Requires each company owning more than 500 residential properties to register annually with the Department of Financial and Professional Regulation. Requires each company owning more than 200 residential properties but less than 500 residential properties to provide to the Department a list of all residential properties owned, a disclosure of all affiliated entities and beneficial owners, and an affirmation of compliance with the Act. Requires the Department to enforce the Act. Grants the Department rulemaking powers. Limits home rule powers. Makes other changes. Effective immediately.

A BILL FOR

AN ACT concerning civil law.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Corporate Ownership of Residential Property Act.

Section 5. Findings and purpose. The General Assembly finds and declares the following:

(1) Residential housing is a critical public good essential to the health, safety, and welfare of the people of Illinois.

(2) A growing number of residential properties are being acquired and held by corporations and institutional investors, which contributes to rising housing costs, reduced homeownership opportunities, and displacement of long-term community members.

(3) The concentration of residential property ownership by non-natural persons presents a threat to the accessibility and affordability of housing in Illinois.

(4) It is in the public interest to limit the number of residential properties that a company may own and to ensure transparency in property ownership.

Section 10. Definitions. As used in this Act:

"Affiliate" means a person or entity that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with another person or entity.

"Company" means (i) any legal entity that is not a natural person, including corporations, limited liability companies, partnerships, real estate investment trusts, or other entities and (ii) any group of such entities under common ownership or control or with overlapping beneficial interests of at least 25%.

"Department" means the Department of Financial and Professional Regulation.

"Nominee" means a person or entity who holds bare legal title without having a beneficial interest for the benefit of some other person or entity.

"Own" or "ownership" includes direct or indirect legal, equitable, or beneficial interest in property, including through affiliated entities, land trusts, nominee agreements, temporary holding structures, or any other form of agency.

"Residential property" means any real property located in this State that is improved by one to 4 dwelling units or any single condominium, townhouse, or cooperative unit intended for human habitation, including properties used for short-term rental or combined into multiunit developments.

Section 15. Ownership limitation. Beginning January 1, 2027, no company to which this Act applies may own more than 500 residential properties in Illinois, including any residential property held by affiliated entities or persons.

Section 20. Exemptions. This Act does not apply to:

(1) governmental or public housing authorities;

(2) nonprofit organizations certified by the Department for affordable housing;

(3) development entities selling units within 24 months;

(4) financial institutions holding properties through foreclosure for less than 12 months; or

(5) residential property used as a primary residence by a natural person, including, but not limited to, residential property held in a revocable living trust or a single-member entity established solely for estate planning or liability purposes.

Section 25. Registration and disclosure.

(a) On or before January 1, 2027, each company to which this Act applies that owns more than 500 residential properties must register with the Department.

(b) The company's registration must include:

(1) a list of all residential properties it owns;

(2) a disclosure of all affiliated entities and beneficial owners for these residential properties; and

(3) an affirmation of compliance with this Act.

(c) Registration must be renewed annually. The Department may impose fines not to exceed $100,000 for filings that are knowingly false or that contain material omissions. The fines described in this subsection (c) do not apply to clerical errors or good-faith mistakes. The Department may impose fines based on the severity of the false misrepresentation or omission.

(d) The Department may initiate investigations into suspected circumvention.

(e) On or before January 1, 2027, each company to which this Act applies that owns more than 200 but less than 500 residential properties must provide annually to the Department the following information:

(1) a list of all residential properties owned;

(2) a disclosure of all affiliated entities and beneficial owners for the residential properties; and

(3) an affirmation of compliance with this Act.

Section 30. Evasion prohibited. A person may not knowingly acquire residential property in violation of this Act through the use of an affiliated entity or nominee purchaser. A violation must be established through evidence of knowing circumvention. No presumption of invalidity applies to any transfer.

Section 35. Civil penalties. A person who violates this Act is subject to repayment of any improperly obtained benefit and a civil penalty not to exceed 25% of that benefit. The Department must determine the amount of the repayment and to whom receives it under this Section. No other per-property per-day, or per-month penalties may be imposed under this Act.

Section 40. Rulemaking. The Department must adopt rules to implement and administer this Act by no later than January 1, 2027.

Section 90. Home Rule. A home rule unit may not regulate corporate ownership of residential property in a manner less restrictive than the regulation by the State as provided in this Act. This Section is a limitation under subsection (i) of Section 6 of Article VII of the Illinois Constitution on the concurrent exercise by home rule units of powers and functions exercised by the State.

Section 95. Applicability. This Act applies only to the acquisition of residential property occurring on or after the effective date of this Act. Nothing in this Act may be construed to require the sale, divestiture, or restriction of residential property lawfully owned before the effective date of this Act.

Section 97. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

Section 99. Effective date. This Act takes effect upon becoming law.