Choosing between a move-in fee and a security deposit shapes both your cash flow at lease signing and your legal risk down the road. A move-in fee is a one-time, non-refundable charge that covers turnover costs like cleaning, rekeying, and paperwork. A security deposit is refundable money held to cover damage or unpaid rent when the tenant leaves.
The two charges aren't interchangeable, and in a growing number of states they aren't even treated the same way under the law. Some states cap or ban move-in fees outright, while others fold them into the same rules that govern security deposits. Understanding the difference between a move-in fee and a security deposit — and disclosing it clearly in your lease — helps you avoid disputes and stay compliant.
This guide breaks down what each charge covers, how much you can typically charge, where move-in fees are restricted, and how to decide which approach (or combination) fits your rental business.
Key Takeaway Table: Fast Facts for Landlords
What is a Move-In Fee?
Before comparing a move-in fee to a security deposit, it helps to define each term clearly, since the two are frequently confused by both landlords and tenants.
Definition and purpose
What is a move-in fee? A move-in fee is a one-time, non-refundable charge a landlord collects from a new tenant at the start of a lease. Unlike a security deposit, it is not held in trust and is not meant to be returned.
The primary goal is to compensate the landlord for the administrative and turnover costs of preparing a unit for a new tenant. These are real, out-of-pocket costs tied to tenant turnover, and the fee lets a landlord recover them immediately rather than waiting to deduct them from a future deposit.
Typical costs covered by move-in fees
What do these fees actually pay for? The exact list varies by property, but move-in fees generally cover essential services and administrative tasks needed to prepare a unit between tenancies — a distinction that separates them from a refundable security deposit.
Common costs include:
- Property Preparation & Cleaning: Professional cleaning of the unit, including carpets, plus minor cosmetic touch-ups so the space is ready for the next tenant.
- Security & Access Management: Changing or rekeying locks and issuing new keys, fobs, or access cards.
- Administrative Processing: Overhead for processing the lease application, running background checks (if not billed separately), and preparing lease documents.
So how much are move-in fees for apartments? Where unregulated, the amount typically runs 20% to 50% of one month’s rent, though some landlords charge a flat fee instead. That range doesn’t hold everywhere, though — several cities and states cap move-in fees well below it, or ban them outright. See the restrictions later in this guide for details.
What is a Security Deposit?
The security deposit is the more traditional and widely understood piece of move-in costs when renting. It serves a fundamentally different purpose than a move-in fee.
Definition and purpose
A security deposit is money a landlord holds at the start of a tenancy to cover potential damage to the property or unpaid rent during the lease.
For example, funds from a security deposit can cover a tenant’s unpaid rent, offset the cost of extensive cleaning, or repair damage that goes beyond normal wear and tear.
Unlike a move-in fee, a security deposit is refundable, provided the tenant follows the lease and leaves the unit in good condition. The non-refundable move-in fee, by contrast, is final the moment it’s paid.
Typical amount for a security deposit
How much is a deposit on an apartment? One month’s rent is the most common standard, though your state’s laws may set a different limit. Many states cap the amount a landlord can charge, and a few — including California and New York — now cap it at exactly one month’s rent for most landlords. Other states allow 1.5 or even two to three months’ rent, and a handful set no cap at all.
For more detail, see our guide on how much a security deposit is for an apartment.
What Renters Should Know About Move-In Fees
If you’re a tenant facing a move-in fee, a little homework upfront can save you an unpleasant surprise later.
- It’s not coming back. Before you pay, read the lease line by line and confirm exactly which charges are labeled non-refundable move-in fee versus refundable security deposit. If the lease doesn’t say, ask in writing.
- Check your state and city rules. Move-in fees are banned, capped, or folded into deposit law in a growing list of places — see the table below for where that applies before assuming the fee is standard.
- Ask for a receipt and an itemized breakdown. Even a non-refundable fee should come with documentation of what it covers. This protects you if a dispute comes up later, and it’s a reasonable request in any state.
- Know what to do if you’re overcharged. If a fee exceeds your local cap, document the charge, cite the specific law in writing to your landlord, and request a refund of the excess. If the landlord doesn’t cooperate, file a complaint with your state attorney general’s consumer protection office, or with the city agency that enforces rental fee rules where one exists (for example, Seattle’s Department of Construction and Inspections), or pursue the difference in small claims court.
Where Move-In Fees Are Restricted or Banned
Most states still leave move-in fees largely unregulated, but that’s changing. As of 2026, several states and cities either ban move-in fees outright, cap them, or treat them the same as a security deposit under the law.
Because this area of law is moving quickly — Illinois’s new rule doesn’t take effect until 2027, and Chicago’s proposal could still change — always confirm the current rule in your specific state and city, or consult a local attorney before setting or agreeing to a move-in fee.
Key Differences: Move-In Fee vs Security Deposit
Grasping the difference between a move-in fee and a security deposit is essential for every landlord who wants to stay compliant and avoid disputes. The table above covers the fast facts — here’s the detail behind each one.
1. Refundability
The core difference between a move-in fee and a security deposit comes down to whether the money can be returned. A move-in fee is non-refundable: once a tenant pays it, they won’t get it back no matter how well they care for the unit.
Say you charge a $300 move-in fee. As soon as you receive it, you can put it toward cleaning, painting, or changing the locks — and you keep it regardless of the condition the tenant leaves the unit in.
A security deposit works differently. If you collect $1,200 as a security deposit for an apartment, that money legally still belongs to the tenant unless they damage the property or owe unpaid rent.
At move-out, if minor nail holes may qualify as normal wear and tear, depending on state law and the circumstances, you return the full deposit. But if the tenant broke a window or left a large stain on the carpet, you deduct the repair cost — and most states require you to give the tenant an itemized list of those deductions.
2. Purpose
These two charges serve different roles. A move-in fee covers your move-in costs when renting — paperwork, rekeying, cleaning — so you have funds on hand for those tasks right away.
A security deposit exists for protection, not upfront costs. It shields you against real lease breaches, like damage beyond normal use or a tenant who skips the last month’s rent, giving you a financial cushion if things go wrong.
3. Regulation
Regulation is where the two charges diverge the most. Security deposit rules are clear and strict almost everywhere: many states cap the maximum typical security deposit for an apartment at one or two months’ rent, and some require landlords to hold the money in a special account, pay interest on it, and return it within a set window after move-out — usually 14 to 60 days, with an itemized statement for any deductions.
Move-in fees for apartments used to face far fewer rules, but that’s shifting, and the three strictest states don’t all get there the same way. Massachusetts bans a separate move-in fee outright through its closed list of permitted charges. New York bans it directly, too, but through a different statute: Real Property Law § 238-a prohibits any extra fee before or at the start of a tenancy, separate from the one-month deposit cap set by Gen. Obligations Law § 7-108. California takes a third approach, folding any move-in charge into its security deposit rules under Civil Code § 1950.5 rather than banning it outright. Seattle caps move-in fees at 10% of the first month’s rent, and Seattle caps move-in fees at 10% of the first month's rent, and Illinois will require every non-optional fee — a move-in fee included — to be listed on page one of the lease starting January 1, 2027, or it can't be collected at all.. Always check your specific state and city before assuming a move-in fee is unregulated.
4. Holding Requirements
Some states — including Massachusetts and New York (for buildings with six or more units) — require security deposits to be held in a separate, often interest-bearing account. Most states don’t impose this requirement, but where they do, landlords may need to disclose the account information to tenants or pay annual interest, as in Massachusetts or Illinois.
This requirement doesn’t apply to a move-in fee, in states where the fee itself is still legal. That money can go straight into the landlord’s business account with no need to track interest, keep separate records, or return it later.
5. Typical Amount Limits
Roughly half the states cap security deposits, typically at one to two months’ rent. The rest leave the amount to the market. For a $1,500 apartment, that puts the maximum deposit anywhere from $1,500 to $3,000, depending on state law.
Move-in fees historically faced fewer limits — commonly 20% to 50% of one month’s rent where unregulated — but that ceiling is dropping in some markets: Seattle caps the fee itself at 10% of the first month’s rent, and cities that follow its lead are likely to set similarly tight limits. Charging more than the local market, or law, allows can lead to complaints or scare off good applicants.
6. Return Timeframe
A security deposit must be returned by a legal deadline — commonly 14 to 60 days after move-out, depending on the state. In California, for example, landlords have 21 days to return the deposit along with an itemized list of any amounts withheld; in New York, the deadline is 14 days.
There’s no return timeframe for a move-in fee, because it was never meant to be returned in the first place — assuming, of course, that charging one is legal in your state.
7. Tenant Perception
Most renters expect to pay a standard security deposit for apartments and view it as their own money, refundable if they treat the property well — which gives them an incentive to keep the unit in good shape.
A move-in fee, by contrast, is often seen as a sunk cost of moving. Tenants may grumble, especially if it’s high, but a reasonable fee that’s clearly explained in the lease is usually accepted without much friction. In competitive markets, lower upfront move-in costs when renting can help attract more applicants, while an excessive fee can scare quality renters away.
Pros & Cons of Move-In Fees
Choosing a move-in fee has distinct advantages and disadvantages that landlords should weigh carefully.
Pros:
- Immediate Cash Flow: The fee is non-refundable and available right away for turnover expenses.
- Less Administrative Work: No separate account, no interest calculations, no formal deduction paperwork at move-out.
- Lower Dispute Risk: A non-refundable fee removes the argument over deductions that often comes up at lease-end.
- Lower Upfront Cost for Applicants: A move-in fee is usually smaller than a full security deposit, which can make a property more attractive to tenants with limited move-in cash.
Cons:
- No Protection Against Major Damage: The fee covers administrative costs and typically isn’t large enough to cover serious property damage or months of unpaid rent.
- May Discourage Some Applicants: Some tenants are wary of non-refundable charges and would rather pay a refundable deposit.
- Legal Exposure Is Growing: Even though move-in fees are lightly regulated in many states, that’s changing fast — Massachusetts bans them, New York and California treat them as deposits, and several cities cap or restrict them. Charging one without checking local law first is now a real compliance risk, not just a minor one.
Pros & Cons of Security Deposits
The traditional security deposit remains popular for good reason, but it comes with its own challenges.
Pros:
- Stronger Financial Protection: A deposit of one to two months’ rent is a meaningful buffer against damage or a tenant who breaks the lease.
- Encourages Good Behavior: Because it’s the tenant’s own money at stake, a deposit gives them an incentive to treat the property well and pay rent on time.
- Clear Legal Framework: The rules can be detailed, but they give landlords a well-defined process for handling, deducting from, and returning the money.
Cons:
- Strict Compliance Requirements: Mistakes — like missing the return deadline — can trigger substantial penalties, sometimes up to three times the deposit’s value.
- Administrative Overhead: Separate accounts, interest tracking, and itemized deduction letters all take time.
- Higher Potential for Conflict: Disputes over what counts as “normal wear and tear” versus damage are common and frequently contested.
- Tied-Up Cash: The money isn’t available for the landlord’s operating expenses; it has to sit in reserve for the tenant, generating no usable cash flow.
When Each Option Makes Sense
Deciding between a move-in fee, a security deposit, or both often comes down to your priorities and your local law.
When a move-in fee makes sense:
- You want to cover routine turnover costs — cleaning, rekeying, admin — without waiting until move-out to recover them.
- You’d rather avoid the administrative work of escrow accounts, interest tracking, and formal deduction paperwork.
- You’re in a competitive, high-turnover market where a lower upfront cost helps you fill units faster.
- You’ve confirmed the fee is legal, capped appropriately, and clearly disclosed as non-refundable in your area.
When a security deposit makes sense:
- You’re renting a higher-value property where the risk of major damage or unpaid rent is meaningful.
- Your state or city has clear, well-established deposit rules you can follow with confidence.
- You want stronger legal standing, and a larger financial cushion, if something goes wrong.
- You’re prepared to handle the compliance side — interest, itemization, and return deadlines — accurately and on time.
Can Landlords Charge Both Move-In Fees and Security Deposits?
Yes, in many jurisdictions, landlords can legally charge both a move-in fee vs a security deposit. This hybrid approach allows a landlord to use the non-refundable fee for immediate turnover costs while holding the refundable deposit for protection against future damages or unpaid rent. However, landlords must be strategic.
Combining a full security deposit with a large move-in fee can create a very high barrier to entry, potentially scaring away excellent applicants. The key is to be transparent and reasonable, clearly defining the purpose of each charge in the lease agreement.
When managing a property with roommates, it's crucial to have a clear policy on how these fees are handled, which is why understanding the dynamics of having multiple tenants on a lease is so important.
How Much Should Landlords Charge for Move-In Fees and Security Deposits?
Determining the right amount for a move-in fee vs a security deposit depends heavily on local laws and market conditions.
Legal overview by state
Rental fee and deposit laws vary dramatically by state, and even by city. Some states set no limit on security deposits, while others cap them at one to two times the monthly rent, as detailed above.
Move-in fees, historically less regulated, are increasingly subject to the same kind of scrutiny: banned in Massachusetts, folded into deposit law in New York and California, capped at 10% of rent in Seattle, and restricted statewide in Illinois starting in 2027 (see the table above for the full breakdown).
At LeaseRunner, we always recommend consulting a local attorney or landlord association to confirm the current rules in your area before setting any fees.
Best practices for landlords
Beyond legal compliance, here are some best practices for setting your fees:
- Check the Local Market: Research the total move-in costs — deposit plus any move-in fee — that comparable units in your area charge. If your total is more than roughly $500 higher than a similar nearby listing, it may take longer to lease your unit.
- Be Upfront: Develop trust with potential tenants by being upfront about all fees, listing the fees, the extent of the fees, and what the fees apply to (i.e., refundable vs non-refundable) in your lease. If you disclose that to them upfront, there should be no disputes afterwards.
- Consider a Hybrid Approach: A modest, non-refundable move-in fee for admin costs, paired with a reasonable refundable deposit (such as one month’s rent), can give you immediate cash flow and long-term protection — where local law allows it.
- Keep Amounts Reasonable: Even where there’s no legal cap, an excessive move-in fee can look predatory and invite challenges. Keep it in line with your actual turnover costs.
This also applies to other fees, where the distinction between a pet fee vs a pet deposit follows similar principles of non-refundable vs. refundable charges.
Conclusion
Whether you charge a move-in fee, a security deposit, or both comes down to your property, your market, and — increasingly — your state and city’s rules. A move-in fee gives you quick cash for rekeying locks, cleaning, or minor repairs before a new tenant arrives, but it’s now illegal in Massachusetts, tightly capped in cities like Seattle, and treated as a security deposit in states like California and New York. A security deposit takes longer to access and comes with stricter compliance requirements, but it offers real protection against major damage or unpaid rent, and it remains the safer default almost everywhere.
Before you set either charge, confirm the current rule for your state and city — the laws in this space are changing quickly, and a fee that was standard practice a year ago may already be restricted. Whatever you decide, disclose it clearly in the lease so tenants know upfront what’s refundable and what isn’t.
LeaseRunner makes that easier. Our platform gives you state-specific lease agreements that reflect current move-in fee and security deposit rules, so you can document these charges correctly from the start — plus integrated tenant screening and online rent collection to manage the rest of the tenancy in one place. Create a Lease with LeaseRunner today and take the guesswork out of move-in charges.
FAQs
Q1. Are non-refundable move-in fees considered a rental scam?
In most states, no. A non-refundable move-in fee is a legitimate charge many landlords use to cover the real costs of preparing a unit for a new tenant, as long as it’s clearly disclosed and the amount is reasonable. But the answer isn’t the same everywhere: in Massachusetts, a separate move-in fee is illegal outright, regardless of how it’s disclosed. In California and New York, any charge collected at move-in beyond rent is treated as, or capped like, a security deposit, so labeling it “non-refundable” carries real legal risk. Before assuming a move-in fee is safe, check your state and city rules (see the table above).
Q2. Why do landlords charge move-in fees?
Landlords charge a move-in fee to cover the administrative and logistical costs associated with tenant turnover. These expenses include things like advertising the vacancy, screening applicants, preparing lease documents, rekeying locks, and professional cleaning, which are not covered by a security deposit.
Q3. Can a landlord charge both a move-in fee and a security deposit?
In many states, yes, provided each charge is clearly disclosed and the deposit portion stays within any applicable cap. But this isn't universal: from January 1, 2027 Illinois requires every non-optional fee to appear on the first page of the lease or it becomes uncollectible; New York's one-month cap on all deposits and advances, combined with RPL § 238-a, leaves no room for an additional fee; and Massachusetts bans a separate move-in fee outright while California folds any such charge into deposit rules.
Q4. How much is a security deposit for an apartment?
One month’s rent is the most common standard nationally, though the exact amount depends on your state. Roughly half the states cap deposits — typically at one to two months’ rent — while the rest leave it to the market. California and New York now cap most deposits at exactly one month’s rent, following recent reforms.
Q5. Do I get my move-in fee back if I don’t move in?
It depends on your lease and, more importantly, on your state, since the answer follows a different rule in each of the three strictest states. In most places, if the charge is a true, signed move-in fee tied to services the landlord has already started — like rekeying or prepping the unit — it’s generally treated as non-refundable, even if you back out before moving in, though you should check the specific cancellation language in your lease or application agreement.
In Massachusetts, the question is almost moot: a standalone move-in fee isn’t a lawful charge in the first place, so any money collected under that label should be returned regardless of whether you moved in. In New York, Real Property Law § 238-a bars landlords from collecting a separate move-in fee at all, so if one was charged, you have a strong basis to demand it back whether or not you took occupancy. In California, a move-in fee is legally part of the security deposit, so if you never move in, the same refund and itemization rules that apply to a deposit apply to that money — the landlord can only keep amounts tied to documented costs it already incurred on your unit.
A separate holding deposit or reservation fee paid before you signed a lease is different from all of the above: it’s typically refundable if your application is rejected, and many landlords apply it toward move-in costs if you’re approved. Whatever the label, ask for the specific cancellation terms in writing before you pay.
Disclaimer: The information provided in this post is intended for general informational and educational purposes only. It should not be construed as legal, accounting, or tax advice. For guidance specific to your situation, we recommend consulting with a qualified professional in the relevant field before taking any action based on the content provided.
