Condo Association Transfer Fee (Chicago: sublet, renters, HOA)

[ChiGuy2.5]

Hello fine folks of CD!
I have a question about Transfer fees imposed on unit owners by Condo Associations. My intention was to use it as a long term income property. I didn't realize though that there is a transfer fee of $300 a month required by the Condo Association! This essentially cuts into any profit made throughout the year on my unit. It is required for ANY new tenant which means yearly for a 1 year lessee.

Is anybody familiar with the laws surrounding transfer fees? This fee in particular seems exorbitantly high. Anybody else pay transfer fees whenever they lease to a new tenant?

[pureistheword]

I assume you mean aside from the common charges?
I have seen condos impose a monthly sublet fee, which I believe is legal to my knowledge.

[compactspace]

Originally Posted by ChiGuy2.5

Hello fine folks of CD!
I have a question about Transfer fees imposed on unit owners by Condo Associations. My intention was to use it as a long term income property. I didn't realize though that there is a transfer fee of $300 a month required by the Condo Association! This essentially cuts into any profit made throughout the year on my unit. It is required for ANY new tenant which means yearly for a 1 year lessee.

Is anybody familiar with the laws surrounding transfer fees? This fee in particular seems exorbitantly high. Anybody else pay transfer fees whenever they lease to a new tenant?

It's both legal and reasonably common. Some associations will charge the tenant a 'move in fee' instead of the landlord. The idea is to discourage high turnover and repair wear-and-tear to common elements done by people moving in and out. Conveniently, it also nicely fills the coffers of the HOA, which benefits owner-occupiers at the expense of landlords.

I'm a landlord in Chicago so I have to pay fees like this too. C'est la vie. I just factored it into my overhead costs. And frankly, in my experience, fees like this are small potatoes next to the disaster of destructive tenants or those who get on the blower to change a lightbulb.

[ChiGuy2.5]

Originally Posted by pureistheword

I assume you mean aside from the common charges?
I have seen condos impose a monthly sublet fee, which I believe is legal to my knowledge.

Aside from elevator/move-in deposit and the monthly HOA fee, those all I expect. This is strictly just a charge made to the owner whenever a new tenant moves in.

Originally Posted by compactspace

It's both legal and reasonably common. Some associations will charge the tenant a 'move in fee' instead of the landlord. The idea is to discourage high turnover and repair wear-and-tear to common elements done by people moving in and out. Conveniently, it also nicely fills the coffers of the HOA, which benefits owner-occupiers at the expense of landlords.

I'm a landlord in Chicago so I have to pay fees like this too. C'est la vie. I just factored it into my overhead costs. And frankly, in my experience, fees like this are small potatoes next to the disaster of destructive tenants or those who get on the blower to change a lightbulb.

This makes me wonder how anybody is able to make money on renting out their places... You basically have to own it for forever and/or have no mortgage. Thanks for your response!

[damba]

Originally Posted by ChiGuy2.5

Aside from elevator/move-in deposit and the monthly HOA fee, those all I expect. This is strictly just a charge made to the owner whenever a new tenant moves in.



This makes me wonder how anybody is able to make money on renting out their places... You basically have to own it for forever and/or have no mortgage. Thanks for your response!

Yep. If I still had a mortgage I would have sold it already

[Vlajos]

It's a monthly fee?

[s0nginmyheart]

My last 2 highrise buildings began to impose this fee to owners renting out their units. It was something like $300 per new lease and there was even a fee for lease renewals (albeit a smaller fee). Your post said $300/month which is insane if that is really what you meant to type. Anyway this fee... it was a charge "to keep track" of the rentals/leases in the building. I think it's supposed to deter from having too many renters and keep owner occupied ratio higher.

I don't agree with this fee at all because it's not really a service that the condo or property management company provides. For clarification, it's a separate fee from the move in fee, elevator deposit, etc. It's strictly to "file" a copy of someone's lease in a filing cabinet IMO.

The only way around this fee is to pass the fee along to the tenant. But I don't know how that's going to work if it's $300/month.

[rcrichlo]

In the past I had heard of condos just saying that only X% of units in the building could be rented. If additional condo owners wanted to rent out their unit but the X% was exceeded they would have to wait on a waitlist.

This was done do keep rentals down which is what this fee sounds like it's trying to do. In addition to a money grab obviously.

[ChiGuy2.5]

OH NO! EDIT! I did not mean PER MONTH. It was a one time fee. Still crazy in my opinion but it sounds like this isn't all that uncommon.

[pureistheword]

If its one time per move in, than that sounds fairly normal to me. I know condos that use that as a source of extra income (I know of one that charges $1000 move in fee, on top of a monthly sublet fee)