Chicago condo Security Deposit VS Move In Fee (Admin Fee) ?

Question

Hi Chicago,

For all the Chicago landlord out there, do you guys do Security Deposit or a non-refundable Move In Fee (Admin Fee) ?

I own a condo unit in Chicago downtown area. Someone has suggested me to do Move In Fee (Admin Fee) instead of security deposit. Or someone call it Admin Fee. Basically, it is a non-refundable fee charged by landlord to new tenants when they move in and may use to cover turnover costs later.

To be clear, my HOA charge a $350 non-refundable move fee and a $300 refundable move in deposit. This $500 Admin Fee is on the top of what HOA charged. This is a total of $350 (HOA charge) + $500 (Admin fee) = $850 non-refundable fee. Will this scare off applicants?

Also, what do you guys name this fee? Since HOA charge a Move In Fee. I don't want to confuse people by saying another Move In Fee by landlord.

Thank you!

Jonathan Klemm · Answer

@Sihang Sun - Personally, I just go with the move-in fee.  There are some tedious rules you have to follow for the security deposit and should you not follow it can definitely cost you!

Nathan Gesner · Answer

If a $350 fee is charged by the HOA, that should be passed on to the Tenant. That leaves you with nothing, so you should be charging your own fee or deposit on top of that.

Will it scare renters off? Some. It didn't scare you off as an investor, so there must be some value there. Make sure you find a way to cover the HOA fee while still providing a level of protection for yourself.

Mark Ainley · Answer

@Sihang Sun we always encourage doing the nonrefundable move-in fee option over security deposit in the city of Chicago. When it comes to the HOA fees A lot of your competition has some of the similar fees or you have to make a decision to help contribute to those as your own expense if you feel you need to be more attractive to the market for an incoming tenant.

Crystal Smith · Answer

I recommend you charge the Move In Fee. Call it a Move IN Fee & Indicate that a portion of the move in fee is being charged by the HOA.