Security Deposit Return? Need to break a Chicago lease?
Most rentals of apartments, condo units, and single family homes are protected by the Residential Landlord Tenant Ordinance (RLTO) in Chicago and the ERLTO in Evanston. Illinois law statewide protects certain tenants at buildings with five or more units. We have helped hundreds of renters get their security deposits back, or end leases tenants needed to cancel.
Chicago Tenant Rights News:
◊ After January 1, 2012 most Cook County Landlords must change locks with start of each new tenancy under new Section 765 ILCS 705/15.
◊ New 2013 RLTO deposit interest rate 0.023%
|Tenants are usually offered a free consultation, so we can find out if we can help. Sometimes the landlord has to pay the tenant's attorney fees. There is a flat fee for lease terminations. We also help people recover for injuries suffered at work and their apartments. Maybe we can help you.||
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October 8, 2012: Look up who really owns the unit before you sign a lease.
Renting in Illinois & Chicago This is Not Legal Advice
The Illinois Court of Appeals has said there is a "historical disparity between the bargaining powers of landlord and tenant." Plambeck v. Greystone Mgmt. & Columbia Nat'l Trust Co., 281 Ill. App. 3d 260, 266-267 (1st Dist. 1996). Some of the laws in Illinois and especially Chicago are meant to offer a little help to residential tenants. This gives tenants some leverage, and satisfaction, when almost everything else favors landlords. Examples of what happens sometimes in these cases can be viewed on the our Cases page. For both tenants and landlords, seeing what happened to others in similar situations can be helpful. Take it from Polybius, "the only method of learning how to bear bravely the vicissitudes of fortune is to recall the calamities of others."
I. LEASES & BREAKING THEM:
Except in DeKalb, Mount Prospect, and Oak Park, Illinois apartment leases need not be in writing. Leases in DeKalb Mount Prospect and Oak Park for residential rentals must be in writing. Everywhere else in Illinois, if a tenant has no written lease, they are probably renting on a month-to-month basis. This kind of lease is valid and enforceable. It still requires written notice to terminate properly.
Even though a written lease is not a prerequisite to renting, a tenant may prefer a written lease. Verbal rental agreements are enforceable, but unreliable. Who promised what exactly? It's not clear. Still, a tenant may want no written lease so they can move out on short notice. Landlords usually want a written lease so they can bind their tenants to paying rent for a long term. A written 12-month lease is a promise by the tenant to pay 12 months of rent. Landlords might successfully sue tenants for all the rent due under a written 12-month lease even if the tenant never moved in. So there are times when signing a written lease is good, and times when it's bad. If you have a month to month lease the flexibility is nice, but you could wind up having to put all your things in a storage facility and find a new apartment fast.
If a tenant breaks a lease improperly, that tenant is probably on the hook for rent for the rest of the lease term. Under no circumstances should a renter rely on a landlord's VERBAL agreement to let the tenant break the lease. Nor should the tenant give only a VERBAL 30-day notice to terminate a month-to-month rental. This is true even if the lease itself isn't in writing. If an agreement to terminate a lease before its natural expiration date is not in writing, the renter should not rely on it. That unfortunate renter may wind up owing rent after they moved out early and their landlord said "sure don't worry about it" on the phone, or in person. The tenant will at least jeopardize their security deposit. A renter can wind up owing rent for months that the tenant doesn't even live at the property. There are cases where a tenant simply cannot legally terminate their lease early, no matter how much they need to. Even in Chicago. Be careful breaking leases. If you can't do it right, don't do it.
Roommate problems? Tenants cannot easily escape a lease they signed with roommates just because some, but not all, tenants are violating the lease or making the apartment disgusting. Tenants on a lease are usually jointly and severally liable. That means the landlord can sue any one of the tenants on a lease for ALL the rent due under the lease. Yes, you may be responsible for your deadbeat roommate's rent, even if you paid all of your rent. So be careful who you sign a lease with. At least in Chicago you may have grounds to legally break the lease and get a fresh start on your own or with a more responsible roommate. You might decide to talk to a Chicago renters-rights attorney about this option. Besides the risk of owing rent for a former "friend" or "valentine", that person is also going to have access to the common areas and maybe even your bedroom in the rented apartment. This can put the security of your valuables and even your person at risk. Even your trash containing receipts, bank statements, or credit card offers put your identity and credit at risk once a roommate-gone-bad situation arises. After all, you cannot evict your roommate for not paying rent, or lock them out of the property. This is just one reason some tenants turn to services such as Life Lock, who keep a consistent eye on your personal info and alert you to any sudden or suspicious changes.
Some renters in Oak Park have a defect in their lease that can get them out of the written lease on 30 days' written notice.
Renters in most of Illinois have no certain means to legally terminate a lease before its written expiration date. These tenants' best hope is to negotiate some resolution with their landlord and commit it to signed writing. The defense of "constructive eviction" is perhaps an option, but tough to prove, and unreliable.
II. IS YOUR RENTAL COVERED BY THE RLTO IN CHICAGO?
Most apartment, condo, and house rentals in Chicago are covered by the RLTO because the RLTO applies to all rental agreements in the City, written and unwritten, unless the rental is subject to some exclusion found under section 020 of the RLTO. That section excludes a number of rentals, and this discussion touches only on a few of those exclusions. Tenants are advised to make sure they don't take any action or inaction in reliance upon this discussion, or the RLTO, without consulting an attorney. It won't turn out well if the RLTO doesn't apply. The Chicago RLTO only applies in Chicago; not all of Cook County. A Guide for Chicago and Illinois tenants not protected by any deposit laws is available here. There is also an Evanston RLTO, which is not the same as the Chicago RLTO. In this section II we are talking just about Chicago.
Owner Occupied and Less than 7 Apartments in the Building
The RLTO does not apply to a rental in a building if the owner of the property lives in the building AND the building has only six units, or fewer. It does not matter how many of the units are actually being rented at the time. See Meyer v. Cohen, 260 Ill. App. 3d 351, 358 (1st Dist. 1993).
Also, as we have learned the hard way, even though a detached coach house on the same property is not lived in by the owner of the property, if the owner lives in the main house, the coach house is still considered "owner occupied" and excluded from coverage under the RLTO if it has fewer than seven (7) units. See Berven v. Marquette Nat'l Bank & Trust No. 14662, 394 Ill. App. 3d 22 (1st Dist. 2009). Is the result the same if the whole property has more than seven (7) units, but not the coach house? Who knows. Sounds like another appellate case. However, if there are five (5) or more units on the whole property, although split between both buildings, the tenants in both buildings ought to still be covered by the Illinois Security Deposit Return Act even if the RLTO does not apply because an owner lives there. See Hoffman v. Altamore, 352 Ill. App. 3d 246, 256 (2d Dist. 2004) ("'residential real property' for purposes of section 1 of the Security Deposit Return Act is limited to buildings on the same parcel of real property") (emphasis added by us).
A single-family home will be covered by the RLTO in Chicago, because the owner of the rented house does not live in the rented house. Only the renter lives in the rented house. Same goes for a single condo unit rented out in a large building. Even if the condo landlord only owns one unit in the building, they are covered by the RLTO. See VG Marina Mgmt. Corp. v. Wiener, 378 Ill. App. 3d 887 (2d Dist. 2008).
The Illinois court of appeals has held that town-homes in a row under the same roof are still separate buildings under the RLTO. Allen v. Lin, 356 Ill. App. 3d 405, 413 (1st Dist. 2005). So if there is a row of five town-homes and your landlord lives in one, and you rent the one next-door, you may still be protected by the RLTO. On the other hand, if you rent a unit in a duplex, and the owner lives in the other unit, you are not protected by the RLTO. But if the building has seven or more units and the landlord lives in the same building, you are still protected.
The question of who is an "owner" is answered by Section 030, which defines "owner" as anyone with a beneficial interest in the property and right to present enjoyment. In other words, even if a trust holds the title to the property, its beneficiaries are "owners" even though their name appears nowhere on the deed. Also, there can often be multiple owners, and non-human owners like LLC or corporation owners. In other words, the person or company you pay rent to is not necessarily the only owner, or even an owner. In Detrana v. Such, 368 Ill. App. 3d 861, 869 (1st Dist. 2006), it was held that a partial owner who lived in a basement but didn't get any income from the property, or manage the property, was still an owner. So the RLTO didn't apply to the building.
The question of
what "occupied" means is unanswered by the published opinions.
We were recently involved in a case where the appellate court
reversed the trial court's finding that an owner occupied a
small building when the tenants saw the landlord only once in
two years, In a 2010
the court of appeals outlined its reasoning:
Needless to say, we agree that an owner cannot live in their house in Joliet and claim their Chicago apartment building is "owner occupied."
The RLTO does not apply to a unit rented by a member of a co-op that holds a proprietary lease. Our office was involved in one case where the landlord alleged that a huge building it managed was a co-op, and so not covered by the RLTO. The court decided that this was not true, because the tenants did not own any shares in the corporation that owned the building. True holders of "proprietary leases" in a co-op own shares in the co-op corporation, and the tenants in our case did not own shares in the "Tenants Association" that held title to the building.
Monasteries, School Dorms, Hospitals, Transitional Care Facilities, Not-for-Profit Homes for the Elderly, Asylums
All of the above are not covered by the RLTO. Until the beginning of 2008, a college dorm was only excused from coverage by the RLTO if it was owned AND operated by the school. But if you rented at a private dorm, not owned by the institution, it may still have been covered by the RLTO. However, city council amended the RLTO in early 2008 to turn the "and" into an "or" so that previously covered buildings became excluded from RLTO coverage. This amendment probably came at the desperate request of institutions like Roosevelt and DePaul Universities, as certain residence hall of theirs were being sued in class action lawsuits alleging violations of the RLTO. It is also important to mention that, even though a not-for-profit home for the elderly is not covered by the RLTO, if it has 25 or more units and is not "public housing," it may still be covered by the Illinois Security Deposit Interest Act and Security Deposit Return Act.
Hotels, Rooming Houses, Bed & Breakfasts
If you rent at a flophouse-type establishment, and pay rent daily or weekly, you are not protected by the RLTO until you've rented there more than 32 days in a row. Then, you might be covered if you start paying a monthly rent. The RLTO is unclear about what happens if you keep paying weekly or daily rent for more than 32 days, and never pay a "monthly rent." It is our opinion that renters at a hotel or boardinghouse with 25 or more units who give deposits and stay more than six months are protected by the Illinois Security Deposit Interest Act regardless of whether the RLTO applies or not.
Purchaser or Seller Pursuant to a Real Estate Purchase Contract Prior to the Transfer of Title
The definition of "real estate purchase contract" in this section is regrettably open to interpretation. Does this exclusion encompass to a rent-to-own situation? How about an option, or a right of first refusal? Unless there will be a transfer of title, for sure, according to the written terms of the contract, tenants renting to buy or holding other options can reasonably argue they do not have a "real estate purchase contract." Only the courts or City Council can resolve the ambiguity arising from this exclusion.
Employee of a Landlord Whose Right to Occupancy is Conditional Upon Employment At the Premises
Tenants who get an apartment because they work on or at the property are not protected by the RLTO. If you are the building super, the renter across the hall might be protected by the RLTO while you aren't. There are situations we have encountered where tenants have leases and pay rent, but their rent is discounted on account of work the tenant does at the building. Coverage of these arrangements by the RLTO is unknown. Those tenants may argue that their occupancy is not "conditional upon employment" because, if they just pay the higher rent amount, their employment doesn't matter. Only the courts or City Council can answer this.
III. Chicago's RLTO is More Than Just Security Deposit Law
If it applies, there is more to the Chicago Landlord Tenant Ordinance than just security deposit law. Chicago law also offers opportunities to break a lease, and recover damages for excessive late fees, annoying apartment showings, and retaliatory evictions, to name just a few common violations. Forcing a tenant to renew their lease more than 90 days before it expires, trying to enforce a lease provision requiring the tenant to pay the landlord's attorney fees, threats to lock a tenant out, failure to turn over possession at the beginning of the lease, and failure to disclose code citations against a building before the tenant signs a lease all can entitle a tenant to automatic damages even if the tenant suffered no actual harm. We have recovered substantial damage awards for Chicago renters who did not even give security deposits. Chicago apartment laws are more complicated than just paying interest and returning the security deposit within 45 days.
IV. Application of Tenants' Rights Law Outside Chicago in the Rest of Illinois
With few local exceptions, Apartment rentals in the rest of Illinois are governed only by the Illinois Security Deposit Interest Act and Illinois Security Deposit Return Act. These Acts are not as generous towards tenants as the local ordinances in Chicago, Evanston, Mount Prospect, Oak Park, DeKalb, and Urbana.
A. EVANSTON RENTERS RIGHTS LAW: We have obtained favorable results for tenants under the Evanston RLTO which is unique in the state because it requires security deposits be returned and accounted for within 21 days after a tenant moves out, even if the withholding is for rent. We represent many Northwestern University students who rent in Evanston under the Evanston RLTO. In one case we represented the tenants in, the Court of Appeals held that the landlord's "inability to obtain a damages estimate within 21 days is irrelevant to a landlord's duty under section 5-3-5-1(C) to return the security deposit." Nadhir v. Salomon, 2011 Ill. App. LEXIS 1011 (Ill. App. Ct. 1st Dist. 2011).
B. DOWNSTATE ILLINOIS RENTERS RIGHTS LAW: The Illinois Security Deposit Interest Act only applies to renters of landlords who own or manage properties with 25 or more units. The Illinois Security Deposit Return Act only applies to renters at buildings with five or more units.
The Illinois Security Deposit Interest Act requires that a tenant show their landlord "willfully failed" to pay interest as required by the Act, or refused. Proving a compensable violation under either of the Security Deposit Acts is more complicated than in Chicago. Our office has filed several class action cases under these Acts against large downstate and Cook County suburban landlords of apartment complexes with hundreds of units.
Under the Illinois Security Deposit Return Act, the tenant is only entitled to penalty damages equal to two-times the amount the landlord withholds if "bad faith" or a refusal to provide a written statement supplemented by receipts is proven. This may not be easy. However, a tenant is entitled to return of their deposit in full if the landlord claims to have paid outside contractors or vendors to do work on the apartment but fails to provide the tenant with copies of paid receipts within 60 days after the tenant moved out. Even if this failure was not a refusal, or in bad faith, the deposit itself must be returned (without penalty damages or attorney fees for the tenant). If the tenant can show the failure was a refusal, then the penalty damages and attorney fees may be awarded. We have helped tenants draft letters to their landlords in order to prove "refusal."
When renting outside of Chicago, an Illinois tenant needs to understand that there may be no law governing their security deposit return except the provisions of their lease, or the common law.
Also, unlike in Chicago and Oak Park, there is likely no way a downstate Illinois tenant can legally get out of a long-term lease. Tenants cannot escape liability under their leases due to economic hardship, a job transfer, marital discord, or alleged "mold." A landlord can always accept a tenant's surrender and voluntarily release a tenant from their lease obligations, but make sure to get that in WRITING. If a tenant can really prove that habitability issues render the apartment or house totally uninhabitable, according to a competent government agency or licensed inspector, the tenant may be able to get out of a lease by claiming "constructive eviction." This is not easy though.
Renters outside Chicago in Illinois are protected by a less effective version of the RLTO provisions allowing for rent-withholding when a tenant has to make repairs the landlord ought to. The Illinois Residential Tenants' Right to Repair Act does not let tenants break leases, but may allow them to withhold from rent up to $500 or half the monthly rent, whichever is less, for payments the tenant makes to contractors to fix problems that are the landlord's responsibility. But this is allowed only after the tenant has written the landlord a certified letter (return receipt) informing the landlord of the problems and giving the landlord at least 14 days to fix the problems themselves. Obviously the tenant cannot exercise this right if the tenant caused the damage.
The Illinois Safe Homes Act does also provide that a tenant may be able to avoid liability under the remainder of a lease if they moved out under a "credible imminent threat of domestic or sexual violence at the premises; and (2) the tenant gave written notice to the landlord prior to or within 3 days of vacating the premises that the reason for vacating the premises was because of a credible imminent threat of domestic or sexual violence against the tenant or a member of the tenant's household." What's a "credible imminent threat"? It's up to the judge or jury.
New for January 1, 2012 is an amendment to the Illinois Landlord and Tenant Act that creates a requirement for landlords in counties with more than three million people (Cook County - not just Chicago) to change the locks on apartments after each tenancy. That is, except for owner occupied buildings with four or fewer units. This new section, 765 ILCS 705/15 "Changing or rekeying of the dwelling unit lock" is meant to offer protection to new tenants from theft by former unit owners, or people who obtained old keys. If the landlord does not comply with this section and there is a theft, then the landlord becomes liable to the tenant for the loss sustained.
Finally, downstate renters have some protection against retaliatory evictions or refusals to renew leases under theIllinois Retaliatory Eviction Act. If a tenant has exercised their rights under state law or complained to a government agency about the landlord, or PROPERLY withheld rent under the Right to Repair Act, then the tenant may have a defense to eviction. This is only if the tenant is current on rent and not otherwise in breach of their lease.
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