The Chicago Residential Landlord and Tenant Ordinance (“RLTO”) contains many mandatory requirements as to the holding of security deposits by landlords to which the ordinance applies. Any violation of those provisions, even an unintentional or minor violation, comes with a penalty of double the entire security deposit and makes the landlord liable to pay the tenant’s attorney fees for enforcement. Because of this, it has become increasingly common for Chicago landlords to cease the formerly widespread practice of requiring a security deposit, typically in the amount of one month’s rent, for every lease. Many landlords instead are now requiring a non-refundable “move in” fee, usually in the amount of a fraction of a month’s rent.
The recent Illinois First District Appellate Court decision in Steenes v MAC Property Management sanctions the new move-in fee practice. In Steenes, the Appellate Court affirmed a lower court decision that a $350.00 non-refundable move in fee was permissible in the case of a lease providing for rent in the amount of $715.00 per month. The court concluded that the $350.00 fee was “a ‘charge’ made in return for plaintiff’s moving into her unit, which would cover defendants’ resulting expense, time, and the interruption of business related to the move.” The Court’s reasoning was based upon its finding that the “amount of the move-in fee appears inadequate to be considered as security for any nonpayment of monthly rent or secure…” tenant’s performance of the lease terms. Because the move-in fee was expressly made non-refundable, the Court found that the fee could not be considered “as a surety for either unpaid rent or compensation for damage to the apartment” and thus was not a security deposit under RLTO.
Feel free to contact an experienced Illinois landlord law attorney at Logan Law, LLC if you have questions about how to properly serve eviction notices or any other area of the laws governing landlords and tenants.