By Don DeBat

May 18, 2025 – A donnybrook is developing between landlords and tenants in Chicago’s highly competitive North Side apartment rental market.

Some Chicago apartment renters are grumbling that they are being charged non-refundable move-in fees that provide them little or no transparency about why the fees are being assessed.

Until about a decade ago, most Chicago landlords charged a traditional security deposit, typically equal to one month’s rent. Security deposits are usually refundable at the end of a lease, depending on the condition of the apartment when the lease expires. However, a flat move-in fee, which typically ranges from $350 to $500, is different than a security deposit, because it is non-refundable.

On May 16, State Senator Michael Simmons (D-7th) introduced a bill in the Senate Executive Committee – an amendment to HB3564, which outlawed or capped various fees that housing providers could charge tenants.

The newly-amended HB3564, called the Rental Fee Transparency and Fairness Act, provides for the following consumer protection:

• All fees, whether they are one-time fees or recurring fees, must be disclosed on the first page of the lease agreement. Otherwise, the tenant is not liable for the fees.

• Any listing for a unit must disclose “in a clear and conspicuous manner” the non-optional fees included with the total amount for rent.

• In the lease disclosure or the listing, the housing provider must disclose whether utilities are included in the rent.

The amendment to HB3564 expressly notes that a housing provider may not charge a tenant both a security deposit and a move-in or move-out fee. Here are other provisions of the amended bill:

The security deposit may not exceed the amount of the first full month’s rent.

If the housing provider charges a move-in or move-out fee, the housing provider must provide an itemized list of the cost of the services, including “bundled services.”

The total amount of the move-in or move-out fees may not exceed 20 percent of the first full month’s rent. A tenant may pay a one-time fee in six monthly installments that begin at the inception of the tenancy.

The amendment states that the housing provider cannot impose a fee or charge interest if the tenant opts for an installment plan. However, the tenant may propose an alternate installment schedule. If the housing provider agrees to the alternative schedule, the schedule must be described in the rental agreement.

The amended bill spells out schedules for leases of six months or less, and month-to-month leases.

Tenants cannot elect to pay one-time fees in installments if the one-time fee does not exceed 25 percent of the first full month’s rent and payment of the last month’s rent is not required in the lease.

A violation of the amended Act constitutes an unlawful practice under the Illinois Consumer Fraud and Deceptive Practices Act. Any person alleging a violation of this Act may bring a civil action. The court may order injunctive relief, monetary relief, attorney fees, and costs.

A housing provider may not rename a fee or charge to avoid application of this Act.

A final note on preemption – the amended bill states as follows: “A home-rule governmental unit, such as Cook County and the City of Chicago, may not regulate transparency for rental fees in a manner inconsistent with the provisions of this Act.”

Language of the bill causes concern

Critics of the amendment to HB3564 ask that since the proposed act regulates security deposits, does this mean that the stricter Chicago Residential Landlord and Tenant Ordinance (RLTO) requirements regarding security deposits and violations thereof no longer apply?

“The amendment raises more questions than it answers,” notes Joe Moore (left), president of Joe Moore Strategies, LLC, and a former Chicago alderman from 1991 to 2019.

Another critic, Michael Glasser, president of the Neighborhood Building Owners Alliance, which represents 11 real estate builders and investor groups, noted that RLTO’s strict language leaves judges with no discretion.

“Any proven infraction, no matter how small or unintentional ‘shall’ result in damages of double the security deposit plus attorney’s fees,” said Glasser (right), quoting the RLTO. “It’s no wonder why housing providers in Chicago almost universally opt for non-refundable move-in fees instead of security deposits.”

Glasser said move-in fees usually require tenants to provide a significantly lower upfront payment than a security deposit.

“Ideally, housing providers should be able to offer their tenants a choice: a refundable security deposit, or a considerably smaller, non-refundable move-in fee,” he said. “The latter allows us to create a reserve for damages and cleaning without the high risk associated with Chicago [RLTO] compliance.”

The funds, said Glasser, also help to offset the rising costs of tenant screening – especially with increased identity fraud – and apartment preparation.

“Without the ability to collect move-in fees, we might be forced to increase the rent for all tenants, which would unfairly affect our long-term, responsible residents,” Glasser said. “Additionally, eliminating the requirement to pay interest on security deposits – which has been negligible for well over a decade and creates considerable administrative burdens – would be beneficial.”