Sec. 42-811 - Security Deposit

 

A. A landlord may not demand or receive a security deposit in an amount in excess of one and one-half months’ rent. A landlord may not avoid the coverage of this subsection by labeling the fee or charge as anything other than a security deposit.

 

B. A tenant shall pay the landlord, at the time the tenant moves into the premises or at any other time mutually agreed upon by the parties, the amount of the security required by the landlord. Any portion in excess of one (1) month’s rent, at the election of the tenant, shall be paid either at the time the tenant pays the initial security deposit, or shall be paid in no more than six (6) equal installments no later than six (6) months after the effective date of the lease.

 

C. Upon termination of the tenancy, property or money held by the landlord as a security deposit shall be returned to the tenant within 30 days after the tenant has vacated their dwelling, provided that the landlord or successor landlord may deduct from the security deposit for the following:

 

1. Any unpaid rent that has not been validly withheld or deducted pursuant to state or federal law or local Ordinance and any courts costs (but not attorney’s fees) awarded by a court in a case that has not been subsequently settled;

 

2. Any reasonable amount necessary to repair any damage caused to the premises by the tenant, or any person under the tenant’s control or on the premises with the tenant’s consent, reasonable wear and tear excluded. In the case of such damage, the landlord shall deliver or mail to the last known address of the tenant, within 30 days, an itemized statement of the damages allegedly caused to the premises and the estimated or actual cost for repairing or replacing each item on that statement, attaching copies of the paid receipts for the repair or replacement. If estimated cost is given, the landlord shall furnish the tenant with copies of paid receipts, or a certification of actual costs of repairs of damage if the work was performed by the landlord’s employees, within 30 days from the date the statement showing estimated costs was furnished to the tenant.

D. A landlord shall hold all security deposits in a federally insured account in a bank, savings and loan association, or other financial institution located in the state of Illinois. A security deposit shall continue to be the property of the tenant making such deposit, shall not be commingled with the assets of the landlord, and shall not be subject to the claims of a creditor of the landlord or of the landlord’s successors in interest, including a foreclosing mortgagee or trustee in bankruptcy.

 

E. Notwithstanding this section, a landlord may accept the payment of the first month’s rent and security deposit in one check or one electronic funds transfer and deposit the check or electronic funds transfer into one account if, within seven (7) business days of acceptance of the check or electronic funds transfer, the landlord transfers the amount of the security deposit into a separate account that complies with this section.

 

F. The landlord shall clearly and conspicuously disclose the name of the financial institution where the landlord has deposited the security deposit in the written rental agreement signed by the tenant.

 

G. If, during the pendency of the rental agreement, the landlord transfers the security deposit from one financial institution to another, the landlord shall notify the tenant in writing of the name of the new financial institution within 14 days of the transfer or within a reasonable time, given all circumstances.

 

H. Any landlord who receives a security deposit from a tenant shall give a receipt indicating the amount of such security deposit, the name of the person receiving it, and, in the case of the agent, the name of the landlord for whom such a security deposit is received, the date on which it is received, and a description of the dwelling unit. The receipt shall be signed by the person receiving the security deposit. Failure to comply with this subsection shall entitle the tenant to immediate return of the security deposit.

 

I. Upon payment of the security deposit by means of an electronic funds transfer, the landlord shall give the tenant a receipt that complies with this section, or an electronic receipt that complies with this section, or an electronic receipt that acknowledges the receipt of the security deposit, a description of the dwelling unit, and an electronic or digital signature of the person receiving the deposit.

 

J. If a landlord, who has received a security deposit, sells, leases or transfers ownership or otherwise transfers control or other direct or indirect disposition of residential real property, the successor landlord of this property shall be liable to that tenant for any security deposit which has been paid to the transferor.

 

K. The transferor shall remain jointly and severally liable with the successor landlord to the tenant for such security deposit unless and until this transferor transfers the security deposit to the successor landlord and provides written notice to the tenant of the transfer, specifying the name, business address and business telephone number of the successor landlord or their agent within ten (10) days of the transfer.

 

L. Within 14 days from the date of the transfer, the successor landlord shall notify the tenant, in writing, that the security deposit was transferred to the successor landlord and that the successor landlord is holding the security deposit. This written notice shall also contain the name, business address and business telephone number of the successor landlord or their agent.

 

M. If the landlord fails to comply, the tenant shall have a right to seek damages.

 

1. If the landlord fails to comply with section 42-811(A). 42-811(B), 42-811(C), the tenant shall be awarded damages in an amount equal to two times the security deposit and reasonable attorney’s fees. This section does not preclude the landlord or tenant from recovering other damages to which they may be entitled under this Article.

 

2. If the landlord fails to comply with one or more of the disclosure requirements as set forth in sections 42-811(D) through 42-811(L), the tenant may notify the landlord of the landlord’s failure to comply with this section by written notice. Within two (2) business days after the receipt of the tenant’s written notice, the landlord shall remedy and provide the disclosures as described in those sections. The written notices required by this section may be delivered electronically if the parties have previously communicated electronically. The written notice from the tenant to the landlord must include that there has been a breach of the rental agreement and that the landlord must remedy the breach within two (2) business days after the tenant delivered the written notice or face damages. If the landlord fails to remedy within two (2) business days, the tenant shall be awarded damages in an amount equal to two times the security deposit and reasonable attorney fees. This section does not preclude the landlord or tenant from recovering other damages to which they may be entitled under this Article.

 
 
 

811(M)(1) is the new 080(f)(1).

When can these strict-liability penalty damages be sought by a tenant without any notice or chance to cure by the landlord? 

 

811(A) punishes a landlord for requesting an amount greater than a month and a half of rent as a security deposit. 

811(B) punishes landlords only if they refuse to let a tenant pay the amount of their security deposit that exceeds one month's rent (if any) over six monthly installments after the lease starts.

 

811(C) mirrors RLTO 5-12-080(d), where a landlord may be punished for failing to itemize damage deductions within 30 days or support those deductions with copies of paid receipts or a certification when allowed.

Bad faith security deposit deduction for countertop

Security deposit deductions in Cook County don't have to be proven "bad faith" to result in penalty damages being awarded the tenant.

42-811(H) is like Chicago's 5-12-080(b), and will require a landlord to give the tenant back their security deposit on-demand for failing to give the proper receipt that meets all of the requirements of this subsection.

Now, effective June 1, 2021, most residential tenants all over Cook County will enjoy some of the same security deposit protections that tenants in Chicago have had for years.  Only three kinds of security deposit violations appear to yield the same kind of strict-liability exemplary damages called for under Chicago's RLTO, but, there is also provision for immediate return of a security deposit in case the landlord fails to give exactly the right kind of receipt at the right time for the deposit.  Also, there are a handful of extra ways a landlord can face the same catastrophe if, after getting a notice from the tenant, they fail to cure whatever transgression  they committed.