Can you ask for last month's rent?

Question

Seems to be the consensus a non-refundable move-in fee is preferred in Chicago -- legal reasons.

What about getting, in addition, first and last month's rent prior to move in? Does this open you up to more litigation similar to a security deposit?

Does anyone implement this or similar?

J Rose · Answer

, Why are you charging a move out fee? That is so greedy

Jonathan Klemm · Answer

@Ian W. - I like the idea of doing first and last months rent, but I would also still do a move-in fee.  I also started charging a moveout fee and just wrote that into my lease.  Also, if it's not an investment property and its a house hack I don't believe the CLTO applys, just fyi.

@Mark Ainley - Do you know of any issues in charging a move out fee as well as move in?

Mark Ainley · Answer

@Ian W. We will collect first and last months rent in the city and suburbs when the applicant is higher risk based on our internal leasing matrix. Applicants that are less then perfect seem to prefer putting down last months rent vs higher security deposit in the burbs and in the city if they are less then perfect they seem to expect it.  I would not expect to be able to collect last months rent on an applicant with a strong application.

@John Warren

Crystal Smith · Answer

Asking for 1st & last month's rent will only open you up for litigation if you do not have your guidelines/procedures for leasing written down and you do not provide those guidelines/procedures to every applicant. You are allowed to treat applicants differently if you are using subjective criteria that is clearly outlined & every applicant knows the criteria. Landlords get in trouble & sued when they use objective criteria.

Mark Ainley · Answer

@Crystal Smith Very true....defending Fair Housing is a guilty to proven innocent process so it is important to do it the same everytime and even better provide publically how you do it up front to applicants before applying.

@Jonathan Klemm The issue with CRLTO is you are not supposed to be charging these "fees" up front to exceed more then 50% of the monthly rent so that is where you can run into issues in Chicago.

Cook County has a similar proposal on the table that compares to CRLTO that will govern the parts of Cook County outside of Chicago and that proposal does not allow non refundable move in fees at all.  I will have an interview I did with my friend from IAR up on our YouTube Page today or tommorrow that talks about it.

The one thing that isnt talked about here is Surety Bonds.  We started using that in lu of deposits or fees this past year in all areas outside of Chicago but we are talking about using them inside soon.

Jonathan Klemm · Answer

Hey @J Rose - Move-out is no different than move-in.  We use it as more of a marketing play.  Here in Chicago, you can't charge more than half of the rent as a move-in fee.  So if the rent was 1000, then we would charge $250 move-in and $250 move-out, while most other house providers might just charge a $500 move-in fee.

We just try to be different, personally, I don't believe we are being greedy, but to each their own on how they run their business.

Eliott Elias · Answer

I do it, I can't speak for Chicago.

J Rose · Answer

What is a move out fee ?  that is so greedy

John Warren · Answer

@Mark Ainley I am interested to hear if you all switch to surety bonds in the city proper. There has to be some way to protect land lords if you can't use a security deposit. That could be an interesting alternative.

Sarita Scherpereel · Answer

Hi Ian, Yes, be careful with the Chicago Land Lord Tenant Ordinance. It's available online to review. My concern is also that first and last months rent collection (when signing a lease) is not a market standard. Like in NYC for example. Therefore, you might be limiting the amount of interest you get in the property. Personally, I don't know anyone that requires that in the Chicago areas I work in. I'm sure we have people that do but I wouldn't want to be the exception to the standards of this market. It might make it more difficult for people to sign a lease, in these uncertain times. This might also depend on the area. While going into the fall/winter months landlords need to be competitive with fewer tenants moving during these seasons.  Best of luck!

Can you ask for last month's rent?

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