Unlike the new Cook County RTLO, “security deposits” are not defined in the Chicago RLTO.
Pursuant to RLTO Sections 5-12-080(a)-(e), a Chicago Landlord has strict obligations with a Chicago Tenant’s security deposit.
If a Landlord violates any of the subsections of RLTO 5-12-080, the Tenant shall be awarded an amount equal two (2) times the security deposit as a penalty under Chicago RLTO Section 5-12-080(f)(2).
The following are the strict obligations of Chicago Landlords with respect to security deposits:
5-12-080(a)(1) – to not commingle the security deposit with the landlord’s assets;
5-12-080(a)(3) – to disclose the bank name and address where the security deposit is being held in the lease signed by the tenant;
5-12-080(b) – to give a written receipt for the security deposit at the time payment is tendered;
5-12-080(c) – to pay interest within thirty (30) after the end of each twelve (12) month rental period;
5-12-080(d) – to provide an itemization of deductions within thirty (30) days of the tenant vacating;
5-12-080(d) – to provide copies of paid receipts for all deductions;
5-12-080(d) – to return security deposits within forty five (45) days of the tenant vacating;
5-12-080(e) – to notify the tenant, in writing, if the security deposit is transferred during the tenancy.
Unlike the Chicago RLTO, “security deposits” are now defined in the Cook County RTLO, effective June 1, 2021.
Pursuant to Cook County RTLO Sec. 42-803(A)(11), “Security deposit means funds provided to a landlord to secure payment or performance of a tenant’s obligations under a rental agreement, or the obligations of the tenant for its guests or pets, and the identifiable proceeds of the funds, however denominated. The term does not include rent or fees.”
Pursuant to RTLO Sections. 42-811(A)-(C), a Cook County Landlord has strict obligations with a Cook County Tenant’s security deposit.
If a Landlord violates any of the subsections of RTLO Sec. 42-811(A)-(C), the Tenant shall be awarded an amount equal two (2) times the security deposit as a penalty under Cook County RTLO Section 42-811(M).
The following are the strict obligations of Cook County Landlords with respect to security deposits:
42-811(A) – to not demand or receive a security deposit in an amount in excess of one and one-half months’ rent;
42-811(C) – to provide an itemization of deductions within thirty (30) days of the tenant vacating;
42-811(C) – to provide copies of paid receipts for any deductions;
42-811(C) – to return security deposits within forty five (45) days of the tenant vacating.
First, pursuant RLTO Section 5-12-140(a), no Chicago rental agreement may provide that the landlord or tenant agrees to waive or forego rights, remedies or obligations provided under this chapter. Second, pursuant to Chicago RLTO Section 5-12-080(d), deductions may be made to a Chicago tenant’s security deposit for only two (2) things: (1) any unpaid rent which has not been validly withheld or deducted pursuant to state or federal law or local ordinance ; (2) a reasonable amount necessary to repair any damages caused to the premises, reasonable wear and tear excluded. Based on a clear reading of Sections 5-12-080(d)(1) and (2), a Chicago landlord has the right to use a security deposit for unpaid rent and the tenant has that same right. Under the Chicago RLTO, the landlord’s “remedy” for non-payment of rent by a tenant is to deduct from the security deposit.
Now the punch line: The infamous lease provision disallowing use of a security deposit for payment of rent waives and foregoes the rights, remedies, and obligations set forth in the Chicago RLTO 5-12-080(d)(1) as stated above. RIGHT?!
Pursuant to the Chicago RLTO, a provision such as this is unenforceable and If the landlord “attempts” to enforce this provision a tenant may recover two (2) months’ rent as penalty, plus reasonable attorneys fees, and costs.
The First District Court of Appeals in Illinois has now stated a clearer definition of what constitutes a copy of a “paid receipt” under the Chicago RLTO Section 5-12-080(d) in their recent holding from Boyer v Buol, 2014 IL App. 132780 (1st. 4th Division, November 20, 2014).
Paragraph 46: “We note initially that the Ordinance (Chicago RLTO) does not define the term receipt nor do the parties cite to any law as to its meaning. However, Black’s Law Dictionary defines a receipt as “[a] written acknowledgement that something has been received.” Black’s Law Dictionary 1382 (9th Ed. 2009); see also Miriam-Websters New Collegiate Dictionary 714 (7th ed. 1969) (defining “receipt” as “a writing acknowledging the receiving of money or goods”). Thus in order to qualify as a receipt, the documentation provided defendants would have to show that the $220.00 in question was actually received by Bolek & Lolek. This requirement is not satisfied by a photocopy of a check that has not been negotiated by the payee. A photocopy of an unnegotiated check can easily be produced without the check being given to anyone, just like a picture of cash.” (emphasis added).
Paragraph 47: “Accordingly, we affirm the trial courts finding that defendants failed to furnish plaintiff copies of paid receipts for the work done to her former apartment, in violation of section 5-12-080(d) of the Ordinance.”
RLTO Section 5-12-080(a)(1) 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
Chicago tenants 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, if a Chicago landlord fails to comply with the numerous guidelines of Chicago RLTO Sections 5-12-080. As ridiculous as this “penalty” may seem, the Illinois Supreme Court’s decision in Lawrence v Regent Realty (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.