Chicago Landlords Charge Nonrefundable Fees in Backlash

Chicago’s strict security deposit rules had an inadvertent side effect: some landlords stopped taking them.

Instead, a growing number of Chicago landlords are charging renters nonrefundable move-in fees, often costing hundreds of dollars, without providing clear justification for what the money covers, Block Club reported.

The practice has drawn ire from tenants and housing advocates. But the accelerated fee-stacking leading the market away from traditional deposits is likely rooted in the city’s own tenant protection laws.

At the center is the Residential Landlord and Tenant Ordinance, which imposes strict rules on how landlords handle security deposits. Landlords must store the funds in a separate, interest-bearing account and return them within 45 days of move-out, along with an itemized list of deductions. Even technical violations, such as commingling funds, or accepting rent and deposit in the same check, have exposed landlords to lawsuits.

To avoid that liability, many landlords have replaced deposits with “move-in fees,” which are largely unregulated and often not tied to any tangible services like cleaning or repairs.

Renters interviewed by the outlet cited $500 to $1,000 upfront charges, sometimes with no breakdown of costs and no clear benefit.

Tenant advocates argue the fees not only lack transparency but may disproportionately burden low-income renters and people of color, especially in tight housing markets.

Some landlords cap move-in fees and apply them to actual expenses, but others use rent increases as a justification to raise fees without providing any extra services.

The issue comes at a time when rents in Chicago are hitting breaking records and landlords already have the upper hand.

Average downtown apartment rents crossed $3,000 for the first time last month, with units in Streeterville topping $3,600.

Only about 500 units are expected to be delivered this year, down from a 10-year average of 3,500, according to Integra Realty Resources. Rents are forecast to spike further through 2026 while few new projects start due to construction costs and capital constraints.

Some municipalities are pushing back. Evanston prohibits move-in fees unless clearly tied to specific services, and Cook County’s landlord-tenant ordinance adopted a similar framework in 2021. A statewide bill that would ban move-in fees and other upfront charges has passed the Illinois House and awaits Senate action.

Advocates have advised renters to request itemized breakdowns, document payments and negotiate fees where possible. One attorney put it so: “Everything’s negotiable. And if someone tells you it’s not, they’re lying.”

— Judah Duke