State and Local Security Deposit Return Laws
Most landlords collect a security deposit from their tenants to guarantee the tenant’s performance of the obligations under a lease or a tenancy. It is a common misconception that the security deposit is an advance on rent. Contrary to popular belief, the security deposit cannot be used by the tenant to pay the last month’s rent and, absent any other evidence in a lease, the security deposit will not be judged to be advanced rent. The security deposit may be used to setoff any damage done to rental property (except for ordinary wear and tear) and as an additional assurance that the tenant will perform the duties contained in the lease. Under Illinois law, there is no maximum or minimum legal amount, but most security deposits range from one to two times the monthly rent (although some municipalities specify by local ordinance the minimum or maximum security deposit amount). In all cases, while the landlord holds the security deposit, the security deposit funds remain the tenant’s property.
In many instances, upon the termination of a tenancy, the law or the lease may impose a set period of time on the landlord to return the tenant’s security deposit or to provide a reasonable explanation of set-offs from the security deposit. In these situations, a landlord’s failure to return a security deposit or to provide an explanation as to the application of the funds may result in the landlord’s exposure to severe penalties. Among the laws relating to security deposits, there are two main laws regulating security deposits on landlords: the Illinois Security Deposit Return Act and the Chicago Residential Landlord Tenant Ordinance. (there are other ordinances in other municipalities in Illinois – you should check if your local municipality is governed by one).
The legislature of the State of Illinois and the governing bodies of many municipalities (Chicago, Evanston for example) have recognized that security deposit abuse exists and have instituted laws to provide a remedy to tenants. The penalties imposed by these laws for failure to comply are severe and serious in many cases.
The Illinois Security Deposit Return Act
The Illinois law (found at 765 ILCS 710) applies to all landlords throughout the State of Illinois for residential property containing five units or more in an apartment complex or in a single building. Under the Illinois statute, a landlord may not keep any part of a security deposit unless he or she has, within 30 days from the date the tenant vacates a property, delivered an itemized statement of damages containing estimated or actual costs, including receipts (for estimated costs, the landlord must send a receipt within 30 days of the date of the letter) to the tenant. If such a letter is not delivered within 30 days, the landlord must return the entire security deposit to the tenant within 45 days from the date the tenant vacates a property. (This does not defeat the landlord’s ability to recover from the tenant for damage later. Instead, it limits the landlord’s ability to deduct for damage from the deposit.) If the landlord refuses to return the deposit, supplies a statement in bad faith or refused to supply a statement, the tenant has an action in Court for a return of the deposit plus a penalty of double the amount of the deposit being held plus court costs and attorney fees. According to the case law relating to the statute, the law does not apply in cases where a landlord holds a security deposit for a good reason or where the landlord was not wanton and willful in disregard of the tenant’s rights.
The Chicago Residential Landlord Tenant Ordinance
The City of Chicago has enacted its own law specific to residential properties located within the city limits of Chicago. The Chicago ordinance is more biased in favor of tenants than the State law. The ordinance applies to all tenants renting within the City of Chicago except for those units specifically excluded in Section 5-12-20. The most common exception to the Chicago ordinance is owner occupied properties containing six or fewer units. The Chicago Ordinance places a number of duties upon a landlord related to the deposit. The landlord must hold a security deposit, separate and apart from the landlord’s own funds, in a federally insured interest-bearing account and must provide the tenant with a receipt for the security deposit. Upon the transfer of a property to a new owner, the landlord must provide the tenant with certain information about the successor landlord. The landlord must also pay interest on the security deposit. (See Section 5-12-080) In addition to these duties, within 45 days from the date the tenant vacates the premises, the landlord must return the security deposit to the tenant. However, the landlord may deduct any unpaid rent or any amounts needed to repair any damage to the premises. Like the Illinois statute, a landlord intending to withhold security deposit funds must, within 30 days from the date the tenant vacates a property, deliver an itemized statement of damages containing estimated or actual costs, including receipts (for estimated costs, the landlord must send the actual receipt within 30 days of the date of the letter) to the tenant. In the event that the landlord fails to comply with any provision of Section 5-12-080 , a tenant may be entitled to a return of the deposit plus a penalty of two times the security deposit plus costs and attorneys fees. It should be noted that a willful violation on the part of the landlord is the key to recovering the penalty available at law under the Illinois statute, however, there is no such requirement under the Chicago Ordinance. The Illinois appellate courts have strictly construed a violation under the Chicago Ordinance as resulting in a penalty.
Getting A Deposit Back
Security deposit recovery can be difficult. Landlords sometimes take advantage of tenants. Sometimes, however, they may not understand the law, may be moving slowly, or may have forgotten. As such, the best solution to getting your security deposit back is to begin simply by asking. Send a letter via certified mail requesting the deposit back. If the landlord does not respond, you may be ready to take some further action.
In most cases, we begin the security deposit recovery process with an attorney’s letter to the landlord. Sometimes a letter from an attorney alerts the landlord that the tenant means business and the landlord complies with the request. In other instances, the landlord may ignore such a request to resolve the problem. If the landlord does not comply with our request, we bring an action in the municipal court for the security deposit amount and any penalties available to you under the law.
Services and Fees
We represent tenants who desire to obtain a return of their security deposit. We currently represent only tenants who are covered by the Chicago Residential Landlord Tenant Ordinance or the Evanston Landlord Tenant Ordinance. We represent tenants throughout the process of recovering a security deposit. We typically represent clients in security deposit recovery work on an hourly basis at an hourly rate of $275 plus costs. We usually charge an hour for a review of a tenant’s situation and contact with the landlord via letter.
How to Get Started
To learn more and discuss the possibility of engaging Reda | Ciprian | Magnone, LLC to assist you with recovering your deposit, please feel free to contact Richard Magnone or one of our security deposit recovery associates at 773-399-1122.
The majority of security deposit recovery cases we accept are brought under the Chicago Landlord Tenant Ordinance. We will usually need to review a copy of your lease, security deposit receipt, and canceled checks. We are generally willing to have a short (5 to 15 minutes) initial discussion over the telephone to determine if we can assist in your situation and to determine if we might be an appropriate match to work with you.
Face to face initial consultations are by appointment only and a consultation fee is generally charged.
To get this process started, please feel free to contact Richard Magnone via email or by phone at 773-399-1122.