WHERE is your Chicago Security Deposit Held?

Is the Name and Location of the Security Deposit Account in the Rental Agreement?  If Not, This Violates The Law.

All Chicago renters who have signed ANY rental agreement or renewal lease as of August 28th, 2010, need to take careful note of a recent amendment to the Chicago Residential Landlord and Tenant Ordinance (also commonly known as the Chicago "RLTO").

The Chicago City Council has now added Chicago RLTO Section 5-12-080(a)(3), which states that a landlord shall disclose in the parties' rental agreement the bank name and address where a tenant's security deposit is going to be deposited and held for the duration of the tenancy.  If a Landlord fails to comply with this requirement, the penalty is two (2) times the security deposit - end of story.

Pursuant to RLTO Section 5-12-080(f)(1):

"Subject to subsection (f)(2), if the landlord fails to comply with any provision of Section 5-12-080(a) – (e), the tenant shall be awarded damages in an amount equal to two (2) times the security deposit plus interest at a rate determined in accordance with Section 5-12-081. This subsection does not preclude the tenant from recovering other damages to which he may be entitled under this chapter."

The Illinois Supreme Court in Lawrence v. Regent Realty (2003), expressly upheld the 2x security deposit penalty under the Chicago RLTO for the following reason:

"[The Landlord's] violation of the ordinance's interest requirements may have been the product of poor judgment, as the trial court believed, is of no consequence. Nothing in section 5-12-080(f) requires proof that the landlord's actions were knowing or willful. A landlord's duty to comply with the statute is absolute. If a landlord requires a security deposit, the landlord is required to pay the tenant interest on that deposit. If he fails to do so, he is liable to the tenant for the damages specified in the ordinance. There are no exceptions. Where a statute is clear and unambiguous, as this one is, the court should not look to extrinsic aids for construction...The statute must be enforced as written, and a court may not depart from its plain language by reading into it exceptions, limitations, or conditions not expressed by the legislature."

Based on the Supreme Court's ruling in Lawrence and the policy of protection of renters rights, all Chicago renters should review his or her full rental agreement.

"These changes to the RLTO drastically change the lease requirements by landlords and the rights of renters living here in Chicago," says Aaron Krolik, a Chicago attorney with a concentration in tenant-landlord rental law disputes and owner of www.securitydepositlaw.com.  "With the recent increase in renters, the City has strengthened tenant rights in Chicago. I am urging renters to call me if they have signed a lease that failed to contain the bank name and location where the security deposit is being held."

"These laws are not going anywhere and it is wise of both renters and landlords to understand the intricate details of compliant lease documentation," adds Krolik.  For more information on Aaron Krolik's law firm visit www.securitydepositlaw.com.

Click Here To See Original Press Release from June 2011.