You might be excited about moving to a new city. But finding an apartment in a new city can be overwhelming, especially if you don’t have prior experience with renting. In your pursuit to find a dream house, you will encounter some unfamiliar terms. This will probably include terms related to move in fees and security deposits.
When you find a new apartment, your landlord is likely to ask you for a security deposit or a move-in fee. The terms might sound the same but they aren’t. With this in mind, it is important that you know the difference between move in fees and security deposits so that you can properly weigh their pros and cons.
Move in fees might be confusing for the majority of new renters. These fees are non-regulated, meaning landlords have free reign in determining. How much they will charge a new tenant to move into an available unit. However, the general practice is to set move in fees at a range between 30-50% of the monthly rent.
A landlord may also ask for additional fees depending on the expenses they incurred while preparing the apartment for a new tenant. These may include the costs of making minor repairs and repainting the apartment prior to move-in. The funds may also be used for any future repairs necessary once you move in.
Landlords must mention that move-in fees are non-refundable in the lease. So that the tenant fully understands that they will not receive all or any portion of the fee at the end of the lease. If a landlord does not bring up move in fees. It is a good idea to ask about them before moving in so you can budget for the additional fees.
Unlike the move-in fee, a security deposit is a refundable amount that is paid to the landlord when moving in. A security deposit of the apartment is subject to the terms of the rental lease. If you stick to the lease terms, you will get your security deposit back when you move out.
Security deposit amounts are subject to some regulation, but landlords can still assess whatever fee they deem appropriate. Traditionally, the fee is 1-2 month’s rent. The landlord is supposed to keep the security deposit in a separate bank account. The information about the bank account must be shared with the tenant.
There are two main reasons why a security deposit may not be refunded in its entirety when the tenant moves out. The first reason is if the tenant caused major damage to the apartment while living there (i.e. broke a window). However, normal wear and tear do not count against you and shouldn’t reduce the amount of your security deposit.
The second possibility is if there are any outstanding fees due at the end of your lease such as a missing rent payment. Depending on the extent of the damage. The tenant may or may not receive most or any of the security deposit back.
From the tenant’s perspective, a security deposit looks better than move in fees since security deposit funds are paid in advance to cover any repairs to the tenant’s apartment. As long as the tenant respects the terms and conditions of the lease and does not do any major damage to the property. The tenant will get the money back. On the contrary, move-in fees are something that the tenant is not going to see again once he or she pays it to the landlord.
From the landlord’s perspective, move-in fees are preferable to a security deposit even though the security deposit makes tenants take care of the property. Landlords are attracted to it because they are more comfortable when there are no administrative hassles associated with collecting them as they are not regulated by laws.