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| Are you a
tenant or a landlord with a
question about your security deposit? Contact us: Reda | Ciprian | Magnone, LLC 8501 W. Higgins Suite 440 Chicago, Illinois 60631 773.399.1122 fax 773.399.1144 email us Useful Links Comparison Table of Various Security Deposit Laws Security Deposit Interest Rates illinois-attorny.com security deposit return services Calculating Interest Due on Deposit illinois-attorney.com landlord consulting services |
Chicago Law:
The Chicago Residential Landlord and Tenant Ordinance (CRLTO) governs, among other things, security deposits for most Chicago tenancies. Landlords who are not exempt from the ordinance must strictly follow the rules prescribed by the law or suffer stiff penalties for noncompliance. Chicago Residential Landlord Tenant Ordinance dose it apply? The first step in analyzing the rights and responsibilities of landlords and tenants under the CRLTO is to determine if the ordinance applies to a particular tenancy. Section 5-12-020 of the CRLTO indicates that the rules of the ordinance are applicable to all residential rental property within the City of Chicago except for certain excluded circumstances. The most commonly applied exclusion is for dwelling units in owner-occupied buildings containing six or fewer units or less. There are a number of other exclusions cited in the act. Other than the excluded situations cited in the act, all other tenancies, whether there is a written lease or not, are covered by the CRLTO. Thus, if a landlord owns one unit in a five unit condominium building and does not occupy that building, the tenancy is subject to the CRLTO. what does it say about security deposits? Section 5-12-080 sets forth the procedures landlords must follow regarding security deposits. The ordinance sets forth five requirements landlords must follow. Click on each of the following links for more information related to the specific section of the ordinance. 5-12-080(a) - obligation to deposit security deposit in interest bearing account and prohibition on commingling security deposit with landlord's personal assets; 5-12-080(b) - requirements to provide a receipt to a tenant who tenders a security deposit; 5-12-080(c) - obligation to pay tenant interest on security deposit; 5-12-080(d) - right to set off deposit for damage and requirements regarding return of deposit; 5-12-080(e) - requirements upon turnover of deposit on landlord's sale or disposition of rental property. what happens if the landlord violates the ordinance? Section 5-12-080(f) requires that a landlord pay damages equal to two times the amount of the security deposit plus interest to a tenant if the landlord fails to comply with any portion of Sections 5-12-080(a)-(e). Section 5-12-180 also entitles a tenant to recover reasonable attorney's fees and court costs in any action to enforce the tenant's rights under section 5-12-080. Application of the law The seminal case in enforcement of the CRLTO is, without a doubt, Lawrence v. Regent Realty. This case established that, unlike the Illinois Security Deposit Law, the Chicago Ordinance does not require a tenant to establish that a landlord's violation of the law was willful or in bad faith. Instead, the court recognized that "the city council has elected to address this problem by imposing an absolute duty on landlords". As a result, judges do not have any discretion in the application of the penalty under 5-12-080(f) and 5-12-180 (or the other provisions of the ordinance for that matter). In Sternick v. Hunter Properties, the court clarified its interpretation of the statute of limitations regarding violations of certain sections of the CRLTO based upon whether they are punative or remedial in nature. In Krawczyk v. Livaditis, the First District Court of Appeals of Illinois determined that the ordinance penalty under section 5-12-080(f) may only be imposed once for multiple violations of Section 5-12-080 in effect preventing the "stacking" of counts under the ordinance. Have an issue? If you believe your landlord has violated the obligation to make a timely return of your deposit or to pay interest on your deposit, please feel free to telephone us at 773-399-1122 for a free telephone consultation (most consultations require approximately ten to fifteen minutes) or email us. |
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