Last updated October 13, 2026
A security deposit is money you pay up front and get back when you move out, minus unpaid rent and damage. A move-in fee is a smaller, one-time charge you never get back. Many Chicago landlords charge a move-in fee instead of a deposit because the city’s Residential Landlord and Tenant Ordinance (RLTO) has some of the strictest deposit rules in the country, with steep penalties for mistakes. A move-in fee costs you less on move-in day; a deposit can cost you nothing in the end if you leave the apartment in good shape.
How do a move-in fee and a security deposit compare?
| Move-in fee | Security deposit | |
|---|---|---|
| Typical amount | A few hundred dollars up to about $1,000 | Often one month’s rent |
| Do you get it back? | No | Yes, minus unpaid rent and damage beyond normal wear and tear |
| Interest paid to you | No | Yes, at a rate set by the city (0.01% for 2026) |
| Covered by the RLTO’s deposit rules | Generally no, if it’s truly a non-refundable fee | Yes |
| Better for you if… | You’re short on cash up front | You expect to leave the apartment in good condition |
In practice, more than half of the Chicago landlords listing on Domu, a local rental site, charge move-in fees, and only a small minority charge both a fee and a deposit.
Why do so many Chicago landlords charge move-in fees?
Because the RLTO’s deposit rules are detailed and the penalties are steep. A landlord who violates the deposit rules can owe the tenant twice the deposit, plus interest and attorney’s fees, even for technical mistakes like a missing receipt or late interest payment. Many landlords decide a non-refundable fee is simpler than holding deposits and risking those penalties.
What are the rules if your landlord takes a security deposit?
For apartments covered by the RLTO, a landlord who takes a security deposit must:
- Give you a receipt showing the amount, the date, and the name of the owner and the person who accepted it.
- Keep the deposit in a federally insured, interest-bearing account in Illinois, separate from the landlord’s own money, and tell you which bank holds it.
- Pay you interest every year if they hold the deposit for more than six months, at the rate set by the City Comptroller. For deposits taken in 2026, the rate is 0.01%, the same as in recent years, so the interest is tiny.
- Give you an itemized statement before deducting the cost of any damage.
- Return your deposit, plus any interest owed, minus unpaid rent and damage, within 45 days after you move out.
Landlords can’t deduct for normal wear and tear, such as minor scuffs or worn carpet from everyday living.
Is every Chicago apartment covered by these rules?
No. The most common exception is an owner-occupied building with six or fewer units, such as a two-flat or three-flat where the owner lives in one of the apartments. Illinois state deposit laws may still apply in those cases. If you’re renting in a small building, ask whether the owner lives there.
Which is better for you?
- A move-in fee makes sense if you need to keep your up-front costs down, or if you have pets or expect some wear on the apartment.
- A security deposit is usually the better deal if you plan to leave the apartment in good condition, because you should get it all back.
Some landlords will let you choose. It’s worth asking.
How do you protect your money either way?
- Read how the lease labels the payment. A move-in fee should be clearly described as non-refundable. If a “fee” works like a deposit, the deposit rules may apply to it.
- Get a receipt for any deposit or fee you pay.
- Take dated photos and video of the apartment when you move in and again when you move out.
- Report existing damage in writing when you move in.
- Give your landlord a forwarding address in writing when you move out.
- If your deposit isn’t returned within 45 days, send a written request. Tenant organizations and legal aid groups in Chicago can advise you if it’s still not resolved.
Frequently asked questions
Is a move-in fee refundable in Chicago?
No. A move-in fee is a one-time, non-refundable charge, which is why it’s usually smaller than a security deposit.
How long does a Chicago landlord have to return a security deposit?
45 days after you move out, for apartments covered by the RLTO, minus unpaid rent and documented damage.
Do Chicago landlords have to pay interest on security deposits?
Yes, for deposits held more than six months in covered apartments, at the city-set rate. For 2026, that rate is 0.01%.
Can a landlord charge both a move-in fee and a security deposit?
Some do, but it’s uncommon. Most Chicago landlords charge one or the other.
What happens if a landlord breaks the deposit rules?
Under the RLTO, the tenant can recover twice the deposit, plus interest and attorney’s fees.
This article explains general rules and isn’t legal advice. For a specific dispute, contact a tenant organization or a lawyer.
Sources
- 2026 interest rate and RLTO coverage: Domu, Chicago Security Deposit Interest Rate for 2026; Chicagoland Apartment Association
- Deposit receipt, interest and return rules: City of Chicago, Rate of Interest on Security Deposits; City of Chicago, Renting Right booklet
- Move-in fees and how common they are: Domu, Guide to Security Deposit Laws
- Penalties: TellUs, Illinois Security Deposit Rights
