Security Deposits

“Security Deposits” under the official Chicago Residential Landlord-Tenant Ordinance (RLTO) Section 5-12-080 (pages 6-9 below) is one of the most important, overlooked, and unique provisions contained in the Chicago RLTO. FACT: A security deposit is your money, and must be kept by the landlord in a manner that accords with the very specific provisions in the Chicago RLTO.

“Damages in an Amount Equal to Two (2) Times The Security Deposit”

Chicago RLTO Section 5-12-080(f)(1) is the key section which provides statutory penalties against Landlords for failing to comply with the law.

“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 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.”

Bottom Line:  If a Chicago Landlord fails to comply with the numerous guidelines of Chicago RLTO Sections 5-12-080(a)-(e), a Chicago tenant shall be awarded damages equal to two (2) times the amount of the security deposit (including refundable key, pet, and parking security deposits) plus reasonable attorneys fees and costs.

As ridiculous as this “penalty” may seem, the Illinois Supreme Court’s decision in Lawrence v. Regent Realty Group (2003) confirms that a landlord need not acted willfully to have been found in violation of Section 5-12-080 and thus liable to the tenant for two (2) times the amount of security deposit.  In other words, this security deposit law in Chicago equates to strict liability.

Chicago RLTO Section 5-12-080(a) prohibits the “commingling” of security deposits with “assets” of Chicago Landlords.  In other words, Chicago tenants’ security deposits shall “continue” to be the tenant’s property, and must be maintained in a separate, interest-bearing account (located in the State of Illinois). These are strict mandates; and are often times violated by Chicago landlords.  How do you find out if your Landlord commingled your security deposit?  Simply request the front and back bank images of your security deposit payment from your Bank (this information is sometimes easily located online and you can print the images).  Is it really worth the effort though? Absolutely.

Chicago RLTO Section 5-12-080(c) mandates that Chicago Landlords pay security deposit interest annually; not in a lump sum at the end of one’s tenancy.  If a Chicago Landlord fails to pay interest annually (or at all) a Chicago tenant shall be awarded damages equal to two (2) times the full security deposit (including refundable key, pet, and parking security deposits) plus all interest (no matter how small) plus all court costs and reasonable attorneys fees.  As ridiculous as this may seem, the Illinois Supreme Court ‘s decision in Lawrence v. Regent Realty Group (2003) confirms that a Landlord need not acted “willfully” to be found liable to the tenant for two (2) the security deposit for failing to pay interest.

Many of us have experienced frustrations and unfairness in dealing with landlords and security deposits in our lifetimes. Amazingly, the Chicago RLTO uniquely balances the powers between tenant and landlord so that anticipated frustration is replaced by pure relief – or at least compliance with the law.

Your rights per the Chicago RLTO cannot be waived – they’re yours and must be protected. Contact Aaron Krolik today to learn about legally breaking your lease and making sure your rights as a renter or landlord are protected. Aaron will diagnose your lease at no out of pocket charge to you. Contact Aaron Krolik today to legally break your unlawful lease in Chicago.