Illinois at a glance
- License
- Broker or residential leasing agent license to rent for others; exemptions for owners and for registered hotel operators
- Trust account
- Escrow account at a federally insured depository by the next business day; non-interest-bearing unless the principals require it in writing
- Records kept
- 5 years
- Reconciliation
- Monthly, within 10 days of the bank statement (bank, journal, ledger)
Details and citations for each point are below.
Who needs a license
- A broker includes anyone who, for another and for compensation (or expecting it), rents or leases real estate, offers or negotiates to, or supervises the collection of rent for the use of real estate.225 ILCS 454/1-10
- A residential leasing agent license covers residential leasing and rent collection only, and the agent must be sponsored by a broker. Brokers and managing brokers do not need it to lease.225 ILCS 454/5-5
- Exemptions include an owner or lessor (and their regular employees) acting only for the owned or leased property — not for anyone else’s — an attorney-in-fact under a recorded power of attorney, court-appointed fiduciaries, and an on-site resident manager of an apartment building or complex.225 ILCS 454/5-20
Short-term rental rules
- Also exempt: a hotel operator registered with the Department of Revenue and paying Hotel Operators’ Occupation Tax who rents hotel rooms for no more than 30 consecutive days and no more than 60 days in a calendar year, and a person who rents out all or part of their own residence through an online marketplace.225 ILCS 454/5-20
- We found no exemption in the Act for managing someone else’s short-term rental for pay.225 ILCS 454/5-20
The trust account
- Escrow money entrusted to a licensee is kept in a special account, separate from personal and other business accounts, until the transaction is consummated or terminated, except as the principals direct in writing, a signed contract provides or a court orders. Commingling is grounds for discipline.225 ILCS 454/20-20(a)(17), (18), (22); 68 Ill. Adm. Code 1450.750
- Escrow accounts are held at a federally insured depository. A sponsoring broker may keep only enough of their own money in the account to avoid service charges, documented as such.68 Ill. Adm. Code 1450.750
- Escrow money is deposited no later than the next business day after the transaction (or after receipt, per the contract).68 Ill. Adm. Code 1450.750
- Escrow accounts are non-interest-bearing unless the law requires interest or the principals require it in writing; the principals name who receives the interest, in writing.225 ILCS 454/20-20(a)(17), (18), (22); 68 Ill. Adm. Code 1450.750
- Only the sponsoring broker keeps escrow accounts — sponsored licensees may not — and the Division is told each depository, account name and authorized signer.68 Ill. Adm. Code 1450.750
Advance rents and deposits
- Escrow money includes security deposits, except where the person holding the deposit is the sole owner of the leased property.225 ILCS 454/1-10; 68 Ill. Adm. Code 1450.750
- Under a written property management agreement, rent paid to a licensee for transmittal to the owner is not escrow money under the rule.68 Ill. Adm. Code 1450.750
- Security deposits remitted to a sponsoring broker stay in an escrow account for the duration of the lease, unless the tenant waives that in writing (in bold print if it is in the lease) or state or local law prohibits it.68 Ill. Adm. Code 1450.750
- A broker’s commissions or fees come out of escrow no earlier than the day the transaction is consummated or terminated, unless all principals direct otherwise in writing.68 Ill. Adm. Code 1450.750
Records and how long to keep them
- Escrow records — journals, monthly bank statements, ledgers, monthly reconciliations and the master escrow account log — and transaction records, including property management agreements, leases and owner statements, are kept for five years.68 Ill. Adm. Code 1450.755
- The most recent two years of escrow records stay at the sponsoring broker’s office and are produced within 24 hours of a Division request. Electronic records are backed up at least monthly.68 Ill. Adm. Code 1450.755; 225 ILCS 454/20-20(a)(17), (18), (22)
Reconciliation and ledgers
- Each escrow account has a journal with a running balance and a ledger for each transaction, kept separate by type (for example, leases).68 Ill. Adm. Code 1450.750
- Each escrow account is reconciled within 10 days after the monthly bank statement arrives (unless there was no activity), with a written worksheet comparing the bank statement, the journal and the ledger. Each reconciliation is kept at least five years.68 Ill. Adm. Code 1450.750
Check with the Illinois Department of Financial and Professional Regulation (Division of Real Estate)
We could not confirm these from a primary source, so we don’t state them as rules:
- Whether guest advance payments for vacation stays are escrow money or rent for transmittal to the owner — the rule draws that line for property management agreements, but we found no IDFPR guidance on short stays.
- Whether the escrow depository must be in Illinois — the rule says only “federally insured”.
- Whether Illinois or local security deposit laws (Chicago’s, for example) reach vacation rental damage deposits — not researched for this page.
- The Act is scheduled to be repealed on January 1, 2030 unless extended.
Sources
Each source was read on 2026-10-25.
- 225 ILCS 454/1-10 — Illinois General Assembly
- 225 ILCS 454/5-5 — Illinois General Assembly
- 225 ILCS 454/5-20 — Illinois General Assembly
- 225 ILCS 454/20-20(a)(17), (18), (22) — Illinois General Assembly
- 68 Ill. Adm. Code 1450.750 — Illinois General Assembly (Joint Committee on Administrative Rules)
- 68 Ill. Adm. Code 1450.755 — Illinois General Assembly (Joint Committee on Administrative Rules)
The reconciliation itself
Whatever your state’s rules, the monthly check is the same idea: the bank, your books and what you hold for each owner and guest should agree. Our three-way reconciliation guide walks through it with a free worksheet. If your reservations run on VacayOps, trust accounting is part of the Full Platform: guest payments are recorded into trust, owner statements build each owner’s balance, and the month’s reconciliation is signed off and exported as a PDF for your accountant. VacayOps records and reconciles the money in your own bank and processor accounts. It never holds or moves funds.