What penalty fees can I charge? (Chicago)

Question

Hi All,

How and what am I allowed to charge in the way of penalty fees to tenants in Chicago? Our rental is owner-occuipied, so I'm really just thinking about 1) fee for pet that is not on the lease (we allow pets), 2) fee for trashing/not cleaning up the common spaces (yard/stairwell) 3) fee for storing items in utility rooms/inappropriate places outside the unit.

Can I do that? I'm not trying to be a tyrant, but after reading through the CRLTO (which yes, I know, doesn't apply to me) it seems like all I can do is sit pretty and wait until the end of the lease, or evict (which is a HUGE PAIN in Chicago.

All thoughts are appreciated. Currently playing around with the free DOMU lease.

Brie Schmidt · Answer

@Esther Page - I would not use the DOMU lease, even if you are exempt from the RLTO now. If you ever move you could be in violation.  Use the Chicago realtor lease, just search the files at www.biggerpockets.com/files and look for Chicago lease 2020.  I put the new one up every year

Jonathan Klemm · Answer

@Esther Page - @Brie Schmidt and @John Warren gave you some great advice.

I approach the whole pet issue similar to John.  I encourage pets because most other landlords shy away from them and when you do that you cut out a huge portion of potential tenants.  I charge an upfront fee and then an additional monthly fee.

If you vet your tenants properly you should have a good idea if they are the type to let their pets destroy your house or not, but it still has to be a calculated risk you are willing to take.

John Warren · Answer

@Esther Page I have gone the other way with pets, and I tell tenants I encourage the pets. Whenever they get a new pet, I just charge them the $25 pet fee. This fee really adds to the bottom line.

Brie Schmidt · Answer

@Esther Page - it would technically be a breach of the lease, you can always write a new one mid year if that happens with an increase in rent

Esther Page · Answer

@John Warren Thanks so much for the advice!

Esther Page · Answer

@Brie Schmidt Thanks for the lease! They looks the same, but if you say this one is better then I'm happy to defer.

Do you know if in Chicago we're allowed to do a penalty for an unauthorized animal, though? Everything in the lease you shared (and DOMU) just say "no, no, no". I'd prefer to not immediately jump to eviction warnings.

John Warren · Answer

@Esther Page we always charge a $25 pet fee. I am considering bumping this up in the future as most tenants haven't blinked when they see it. We don't charge for trash/cleaning up as most of our tenants are respectful and this hasn't been a huge issue. The inherited tenants that cause these issues are normally people we work towards getting out. We avoid eviction though as most of these inherited tenants will eventually leave on decent terms. It is MUCH cheaper to trash out a couch or two than to pursue people in court, and it isn't worth the mental bandwidth.

What penalty fees can I charge? (Chicago)

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