Illinois House bill bans move-in fees, but landlords fear higher rents

ROCKFORD, Ill. (WTVO) — The Illinois House passed legislation that would ban landlords from charging “move-in” fees, but property owners are worried the bill, if it becomes law, would create new problems, including higher rent costs.

“I mean, okay, so it’s saying that they can’t charge certain fees. Okay. So what they’re going to do then is they’re going to build … it into the rent aspect,” said Rep. John Cabello (R-Machesney Park), who opposed the bill. “So, the rents are going to go up.”

House Bill 3564 amends the Landlords and Tenants Act to prevent landlords from charging “for the processing, reviewing, or accepting of an application, or demand any other payment, fee, or charge before or at the beginning of the tenancy.”

“I exclusively use a move-in fee instead of a security deposit because my move-in fee is considerably less than an actual security deposit,” said Tim Jenkins, organizer for Rockford Real Estate Investors. “And I’ve noticed that helps a lot of residents. So it really is a cost saving measure for them.”

The bill also limits the amount landlords can charge for a late fee, with a $10 maximum for the first $1,000 owed, something Paul Arena, of the Rockford Apartment Association, said he worried could drive up delinquencies.

“The majority of rents here are under $1,000, and a 1% late fee is insignificant,” he said. “It will drive up delinquency and cause more landlords to fail. What they’re effectively saying is the tenant can pay late, and the landlord has to bear the financial penalties for the tenant’s lateness.”

Jenkins added that if the bill does pass in the Senate, it will send ripples throughout the renting community.

“I think you’re going to flush out a lot of the established landlords who have decades of experience. They’re going to say, look, I’ve had enough,” he said.