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Is your landlord cool with this (you subletting, or someone living there who isn't on the lease)?
If it's against your lease to have people live there who aren't on the lease (and it usually is...), I would think it could likely render you powerless in a court of law (should it ever get to that point).
or I've been watching too much Judge Judy, which is also entirely possible.
LOL. Probably too much Judge Judy my friend. But seriously, our landlord does not care AT ALL. In fact, we tried getting people who live there on the lease but the landlord is too lazy to bring it over to us. I am not even on the lease.
So basically we live in an area of chicago called Lincoln Park, it is where Depaul College is located. So the apartment we rent is a 6 bedroom 3 bath. It is all mid 20 somethings living there, including myself. We are all friends you could say. 3 of the current renters are on the lease and they basically are the ones who are ultimately responsible to meet the rent payment every month. We work on an honors system (reckless I know), but since the landlord is so nonchalant we can't add anyone to the lease.
The landlord knows there is 6 people living there and that not everyone is listed on the lease. For all he cares, we could probably have 8 people living there, as long as he receives his rent payment. We pay all of our own bills, so he is pretty much hands off.
This $250 charge is to protect us 5 people in case they decide to default. Also, the reason we can't take first and last months rent is because the landlord doesn't care if the new guy pays since the other 3 people are the ones who have to pay since they are the only ones listed on the lease. Does this make sense? I know its sort of confusing.
Why make it non-refundable? If they make all their payments and don't do anything wrong why should you get to keep their money?
If they don't pay then you would take it.
(I'm not speaking at all about what is legal or illegal)
We thought about that as well, but then we run into the issue of somebody complaining that they paid their rent on time, but maybe they didnt give us money for utilities. People can be dumb sometimes and believe they are owed when they really aren't. Or, what if they break something and leave and we are forced to pay for it. Its kind of just a minor security blanket.
Also, since there is 5 roommates, who is going to hold that money until they move out? What if I hold the money and then move out without giving it back? Those are all tough issues that we ran into. Its just a tough situation all together. All I know is that people are more then willing to pay most of the time.
This one guy that claimed it was illegal probably wouldn't make a good roommate anyway. For example, if he had the money and was just unwilling to pay, he has the potential to be a pain in the rear end when it comes to bills and such. If he doesn't have the money, then he may not be the best one to rely on for on time payments. It kind of weeds out those who are cheap/broke/unwilling to stay very long.
Firstly, I would never rent a room with a nonrefundable fee. Secondly, the arrangement sounds like a mess. An honor system with six 20-somethings who can't figure out who would even hold the deposit??? No wonder the last person didn't pay rent.
Why not write a roommate contract or get something in writing? Or make your landlord do his job?
There are a lot of landlords in the Chicago area charging non-refundable move in fees as a way to dodge CRLTO rules regarding security deposits. We got into an issue w/ our past landlord over the summer and, before we ended up settling out of court, our lawyer informed us of the many security deposit rules our landlord broke, including not giving us a signed and dated receipt, that would have cost him as much as 3X our deposit. According to our lawyer (some random person assigned to us by the LCBH-Lawyers' Committee for Better Housing, IIRC), a lot of landlords switch over to move in fees which don't have all those multi layer rules on how to handle it. I have zero clue if you (or whoever is on the official lease), as someone basically subletting these rooms, are required to hold to the same rules.
I don't think there are any rules regarding these move in fees. I've seen them as low as $100 per person to as high as $750 per person, always non-refundable. On the one hand, move in fees tend to be lower than security deposits (sometimes lower than 50% of a typical one month deposit), so if you're having trouble coming up w/ that fund and don't mind losing that money, it's a good option, especially in you plan on staying longer than a year. On the other hand it is non-refundable and I can't imagine it gives tenants much of an incentive to keep a place clean and kept up since they won't be getting any money back. I personally prefer move in fees since it is a battle dealing with slumlords who may decide to pocket your security deposit for BS reasons or takes months to get it back to you.
I know we charged our roommates a non-refundable move in fee last year ($250). One had no issues w/ it, the other didn't complain but also left her room in a bit of a shamble after she left. I don't think it's illegal or particularly off putting b/c, again, such move in fees are usually lower than having to provide 1st month's rent and/or a security deposit. Of course, I'd suggest making a call to the LCBH and hope they have more info or advice, just to cover your bases. (I believe their office is in the Loop so you can visit). People may complain about you pocketing the cash, but I wouldn't worry about it, or at least set up a household fund if all rent/costs are up to date. For example, we used the fees we collected for regular maid service, basic household supplies, and deposits to set up utilities. It is nice having that cash put away if a roommate does flake out on bills or rent though.
One last thing: speaking as someone who has been living with roommates for almost 10 years, I can assure you the best investment you can make is a receipt book w/ carbon copies. About $10-15 at Office Depot. Use. them. for. everything. Anytime money changes hand, regardless if it's for $5 or $500, make out a receipt, have both parties sign it, and keep the carbon copy. Also, google "roommate lease" or "roommate agreement" for roommate specific leases that will in case issues arises. Make sure it details who pays what bills, is responsible for cleaning, pet and guest policies, etc. I learned a while back to have potential roommates fill them out, especially while in college. Don't work on the honors system, it will come back to bite you on the you-know-where.
We thought about that as well, but then we run into the issue of somebody complaining that they paid their rent on time, but maybe they didnt give us money for utilities. People can be dumb sometimes and believe they are owed when they really aren't. Or, what if they break something and leave and we are forced to pay for it. Its kind of just a minor security blanket.
Also, since there is 5 roommates, who is going to hold that money until they move out? What if I hold the money and then move out without giving it back? Those are all tough issues that we ran into. Its just a tough situation all together. All I know is that people are more then willing to pay most of the time.
This one guy that claimed it was illegal probably wouldn't make a good roommate anyway. For example, if he had the money and was just unwilling to pay, he has the potential to be a pain in the rear end when it comes to bills and such. If he doesn't have the money, then he may not be the best one to rely on for on time payments. It kind of weeds out those who are cheap/broke/unwilling to stay very long.
Good point. I am not in your area, but I see nothing wrong w/ calling it a deposit period. You can explain verbally that is meant to help remedy the occasional roomate that "stiffs" the rent budget. It isn't a huge amt, and as long as the lease holders sign something, and maintain the funds, they should manage all of it. You are just a renter, not on lease. Did you pay this deposit also?? So, what is the money used for intially?? Nice size apartment btw.
Firstly, I would never rent a room with a nonrefundable fee. Secondly, the arrangement sounds like a mess. An honor system with six 20-somethings who can't figure out who would even hold the deposit??? No wonder the last person didn't pay rent.
Why not write a roommate contract or get something in writing? Or make your landlord do his job?
I dont know if you live in Chicago or not, but $250 to lose for a room is really really cheap. Also, the honor system relies on the honesty of individuals. I know it might be reckless but how else are you supposed to split bills and share a lease? The only reason we cant figure out who would hold the deposit is merely because people come and go occasionally, and lets face it, we aren't all rich. We are 20 somethings living in chicago, I wouldn't want to give my money to some other peer to hold onto for last months rent and expect him/her to not spend it.
Making my landlord do his job is a lot easier said than done. Unfortunately we tried and they kind of suck in that regard. They don't know how lucky they have it. We dont complain and we all make sure expenses are covered without much fuss, we find our own roommates (which I think is good since we can choose our roommates).
There are a lot of landlords in the Chicago area charging non-refundable move in fees as a way to dodge CRLTO rules regarding security deposits. We got into an issue w/ our past landlord over the summer and, before we ended up settling out of court, our lawyer informed us of the many security deposit rules our landlord broke, including not giving us a signed and dated receipt, that would have cost him as much as 3X our deposit. According to our lawyer (some random person assigned to us by the LCBH-Lawyers' Committee for Better Housing, IIRC), a lot of landlords switch over to move in fees which don't have all those multi layer rules on how to handle it. I have zero clue if you (or whoever is on the official lease), as someone basically subletting these rooms, are required to hold to the same rules.
I don't think there are any rules regarding these move in fees. I've seen them as low as $100 per person to as high as $750 per person, always non-refundable. On the one hand, move in fees tend to be lower than security deposits (sometimes lower than 50% of a typical one month deposit), so if you're having trouble coming up w/ that fund and don't mind losing that money, it's a good option, especially in you plan on staying longer than a year. On the other hand it is non-refundable and I can't imagine it gives tenants much of an incentive to keep a place clean and kept up since they won't be getting any money back. I personally prefer move in fees since it is a battle dealing with slumlords who may decide to pocket your security deposit for BS reasons or takes months to get it back to you.
I know we charged our roommates a non-refundable move in fee last year ($250). One had no issues w/ it, the other didn't complain but also left her room in a bit of a shamble after she left. I don't think it's illegal or particularly off putting b/c, again, such move in fees are usually lower than having to provide 1st month's rent and/or a security deposit. Of course, I'd suggest making a call to the LCBH and hope they have more info or advice, just to cover your bases. (I believe their office is in the Loop so you can visit). People may complain about you pocketing the cash, but I wouldn't worry about it, or at least set up a household fund if all rent/costs are up to date. For example, we used the fees we collected for regular maid service, basic household supplies, and deposits to set up utilities. It is nice having that cash put away if a roommate does flake out on bills or rent though.
One last thing: speaking as someone who has been living with roommates for almost 10 years, I can assure you the best investment you can make is a receipt book w/ carbon copies. About $10-15 at Office Depot. Use. them. for. everything. Anytime money changes hand, regardless if it's for $5 or $500, make out a receipt, have both parties sign it, and keep the carbon copy. Also, google "roommate lease" or "roommate agreement" for roommate specific leases that will in case issues arises. Make sure it details who pays what bills, is responsible for cleaning, pet and guest policies, etc. I learned a while back to have potential roommates fill them out, especially while in college. Don't work on the honors system, it will come back to bite you on the you-know-where.
Great advice, I appreciate the help! In my last apartment we had the option of a $2100 refundable security deposit, or a $750 non refundable security deposit. We chose the $750 because its just easier. I would rather just know my money is gone and not worry as opposed to paying 2100 and wondering if we will get most of it back, and/or fighting for it back.
In September somebody moved into our apartment, they paid Septembers rent right away, hasstle free. It wasn't until November that he paid October's rent and then he left mid December without ever paying November.
September - Paid On Move In
October - Paid November 5th
November - Didnt Pay
December 10th - Moved Out
Basically, we all share a lease and so we are forking out the dough for rent if somebody decides they no longer want to be responsible. To counter act this we have started telling new renters that there is a Non Refundable $250 Security Deposit. This helps ensure that they stay for at least 1-2 Months, and it gives us a way to recoop some of the loses should they default.
So far there has been no issue with most people surrounding this, until today. Some guy online today told me that it was illegal to have a non refundable deposit. Basically, I don't care and will just ignore him but now I am curious if it is illegal since I paid a $750 non refundable security deposit for my last apartment.
I live in Chicago, Illinois BTW. Also, there is NO other deposit, so it really is a good deal for anybody looking for a place in Chicago.
had this happen to me. it doesnt matter how close of a friend it is, DO NOT DO IT ANYMORE.
people are shady when it comes to money.
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