Property Management
What is a 'rent concession' and how does it affect property management in Illinois?
AA court-ordered rent reduction for uninhabitable units
BA temporary incentive (free month's rent, reduced deposit) offered to attract or retain tenants✓ Correct
CA mandatory reduction in rent under the Chicago RLTO when repairs are delayed
DA tax benefit for landlords who reduce rent for qualified tenants
Explanation
A rent concession is a temporary incentive offered by landlords to attract new tenants or retain existing ones—such as one month free rent, reduced security deposit, or a tenant improvement allowance. Property managers must account for concessions when calculating effective rent and occupancy costs.
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Key Terms to Know
Net Operating Income (NOI)
The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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