Hi, everybody. I’m currently looking for a new appartment right now and I’ve come across something that I found odd. I wanted to get some opinions on this.
Basically, ontop of the rent, the landlord wants a one time “management fee” of $100 if I don’t want to sign a lease. I’ve never seen this before, so I’m a bit suspicious. As far as I can tell, it’s not a deposit, I won’t ever see the money again, although I haven’t had a chance to ask, yet.
I agree. We need clarification on what “not signing a lease” means. If it is code for “month to month”, then he/she is presumably doing this because they want some compensation knowing you may leave at a very inopportune time where they may not be able to rent the apartment again. That said, if the apartment is a good deal, ideal location, etc., it wouldn’t be a deal breaker for me, except that I would still want some kind of contract in place anyway to make sure the lack of a lease didn’t also allow the landlord to throw me out on my ass the moment they found a renter who was willing to pay a little more. In other words, what consideration beyond the month to month flexibility do you get for that $100?
The last place we rented, there was a $50 “Application fee.” That was used to run background checks, etc (in theory). I wonder if this is the same animal, but under a different name?
Assuming, as others have done, that “no lease” really means a month-to-month lease, this is fairly typical. In fact, it’s pretty advantageous for the renter. The most common practice for month-to-month leases is to simply increase the monthly rent. For example, rent would be $800 with a 12-month lease or $825 with a month-to-month lease. By charging you a one-time fee instead, you’re not being penalized if you choose to live there for a long time.
As Yarster said, the purpose is to give the management some compensation if you choose to move out and they can’t immediately find someone to fill that apartment.
That’s what I’m thinking, but since the OP said “if I don’t sign a lease” I’m thinking it’s a $100 application fee that you lose if you decide not to rent the apartment, but if you sign the lease it get’s applied to the deposit (or first months rent).
Or it’s just a $100 surcharge for being month to month. Might even only be a one time fee for being month to month.
Sorry, I didn’t realize I wasn’t being very clear.
I can either sign a lease or pay month to month. If I pay month to month, then I pay the $100 fee, but only once. I’ll be seeing the actual place tomorrow and I’ll be able to ask questions then. gallan said it was typical, and it does make sense, I had just never seen something like this before.
If you can pay a one time $100 fee and stay there as long as you want on a month to month basis without your rent getting hiked (as a premium for being month to month) I would jump on that. That’s a great deal. The question I’d have though is if they can terminate your rent at any time? That is, could they approach you and say “Hey, we’ve rented your place out, you have to be gone by the end of the month”
Something else to think about in a case like this though. Each month they could change your rent. So it’s $800 this month and it could be $850 next month and you might not have any recourse.
Not sure how Canada works, but in the US I have rarely seen scenarios where a reasonable quality apartment is allowed (by the owner) to be leased month to month unless the renter is paying a substantial rent premium for the privilege. Being able to bolt with 30 days notice is a huge advantage for the tenant in most cases and is worth (IMO) a lot more than a $100 one time fee.
Our home lease has this. If I don’t want to renew my lease within 30 days of the anniversary I have to pay 100 dollars management fee in order to rent by month.