Security Deposit Law

 

 

               DEPOSIT RETURN EXAMPLES          

 

     In this case the tenants were four Northwestern University students renting a house in Evanston on Hamlin Street. 

House on Hamlin, Evanston

     The tenants gave a $3,300 security deposit.  They paid all rent and lived at the house 12 months and moved out the last day of the lease: August 31, 2006. 

     In envelopes postmarked September 22, 2006 the landlord returned only $606.44 from the $3,300 security deposit.  The landlord enclosed a written statement alleging $2,700 in damage and dirtiness. 

22 SEP 2006 PM 3

     The tenants were smart, and kept the envelopes.  Section 5-3-5-1(C) of the Evanston Residential Landlord & Tenant Ordinance says:

  "Upon termination of the tenancy, property or money held by the landlord as security or prepaid rent may be applied to the payment of accrued rent and the amount of damages which the landlord has suffered by reason of the tenant抯 noncompliance with Section 5𦠬-1 hereof, all as itemized by the landlord in a written notice delivered to the tenant together with the amount due twenty one (21) days after tenant has vacated his unit. Any security or prepaid rent not so applied, and any interest on such security due to the tenant, shall be paid to the tenant within twenty one (21) days after tenant has vacated his unit."

     Section 5-3-5-1(F) says:

  "If the landlord fails to comply with subsection (C) of this section, the tenant may recover the property and money due him together with damages in an amount equal to twice the amount wrongfully withheld and reasonable attorney fees."

      The landlord rejected our written demand for return of the tenants' deposit:

Dear Mr. Silverman: Your letter to *** has been placed into my hands. Frankly, I find your clients' claim lacking in merit and their demand outrageous. Consequently, their demand is hereby denied. Furthermore, please be advised that, should your clients pursue their frivolous claim, we will file a counterclaim against them for additional damages incurred subsequent to the return of the diminished security deposit. Of course, we will then seek appropriate attorney fees pursuant to the terms of the lease. Finally, and pursuant to Order 2.3 of the General Orders of the Circuit Court of Cook County, I expect any litigation to be commenced, and prosecuted, in the Second Municipal District. Any attempt to have this matter litigated within the first Municipal District will be met with a motion to transfer as well as a motion for sanctions.

     We filed the tenant's lawsuit in the Circuit Court of Cook County.  Tenants alleged the landlord's return of the deposit refund and written accounting were one day late, and that the landlord therefore owed the tenants double the amount withheld plus court costs and attorney fees.

     At trial the the judge awarded tenants return of another $1,750 from their deposit, plus awarded their court costs against the landlord.  The judge also believed that the deposit and accounting were not provided by the landlord within 21 days.  But the judge refused to order the landlord to pay the tenants twice the amount wrongfully withheld and the tenants' attorney fees. 

     The judge said "I don't find one day to be a significant breach of the ordinance."

     We appealed to the Illinois Court of Appeals, which reversed the decision.  The one day late was enough, so the landlord was found liable for the $1750 plus twice the amount wrongfully withheld plus tenants' attorney fees and court costs.  The order from the appellate court is unpublished pursuant to Illinois Supreme Court Rule 23, and so is not precedent.  But it is still interesting.

Thus, we agree with plaintiffs that under subsection (F), it is within a tenant's discretion whether to recover the stated damages and fees, and not within the trial court's discretion whether to make such an award. See In re R.C., 338 Ill. App. 3d 103, 111 (2003) (contrasting statutory provision where "may" referred to an endowed trial court with discretion with statutory provision where "may" attached to and granted discretion to respondent). Given the Ordinance's general purpose of protecting tenants, we cannot find that the singular appearance of the word "may" in subsection (F) negates the overall compulsory nature of section 5-3-5-1. As in Lawrence, it is reasonable to impose an absolute duty on the landlord in this case because "[w]ithout the prospect of liability for significant additional damages, landlords would therefore have little incentive to meet their statutory obligations." Lawrence, 197 Ill. 2d at 10. For the reasons explained above, we affirm the portion of the trial court's judgment granting plaintiffs $1,750 plus costs, but reverse the portion of the judgment refusing to award damages in an amount equal to twice the amount wrongfully withheld and reasonable attorney fees. We remand for the calculation appropriate attorney fees.         

     In Evanston 21 days means 21 days.  (Unless that 21st day falls on a weekend or holiday).

 

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