Why were the tenants awarded damages even after the eviction was dismissed?

After the eviction was dismissed, the court still reviewed the tenants' counterclaims under the Chicago Residential Landlord and Tenant Ordinance. While the trial court initially rejected some claims, the Appellate Court ruled that the landlord violated the law by mortgaging the tenant's security deposit. That violation allowed the tenants to recover damages, costs, and attorney fees.

What does it mean to unlawfully mortgage a tenant's security deposit?

Chicago law prohibits landlords from using tenant security deposits as collateral for their own debts. In this case, the landlord subjected the tenant's security deposit to a mortgage held by a creditor. The Appellate Court found this violated RLTO § 080(a), even though the tenants did not lose the deposit outright.

Why did the court award double the amount of the security deposit?

Under RLTO § 080(f), tenants are entitled to damages equal to two times the security deposit when a landlord unlawfully handles or exposes the deposit to creditor claims. Because the deposit was $1,200, the court awarded $2,400, along with costs and attorney fees, as required by the ordinance.

Tenant Avoids Eviction and Wins Damages

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Tenant Avoids Eviction and Wins Damages on Appeal

In this case the the Tenants rented an apartment in Chicago. The tenants gave a $1,200 security deposit. The Landlords filed an eviction action after tenants paid their June rent late. The Landlords claimed to have never gotten that check. We entered our appearance and filed a counterclaim for three alleged violations of the RLTO.

We got the eviction dismissed, and the Court proceeded to rule on the Tenants' counterclaims. We won $100 for one violation, but the trial court rejected our claim that the Landlord (1) retaliated and (2) unlawfully mortgaged the tenant's security deposit.

The Tenants asked us to appeal the ruling. The Appellate Court affirmed the award of $100:

We lost again on the retaliatory eviction claim. But the Appellate Court reversed the trial court's ruling against the Tenant's "mortgaged deposit" counterclaim. Thus, the Tenants were awarded damages under RLTO § 080(f) equal to two times the $1,200 security deposit; or $2,400, because the Landlords violated RLTO § 080(a) by subjecting the Tenants' security deposit to the claims of the landlords' creditor; as collateral in their mortgage. Tenants were also awarded costs and attorney fees.

The result in this case was consistent with the Supreme Court's opinion in Lawrence v. Regent Realty Group, Inc., 197 Ill. 2d 1 (2001) that:

"The purpose of the law is to help protect the rights of tenants with respect to their security deposits..."

The assessment of a penalty against landlords for mortgaging tenant security deposits is the only way to convince landlords not to mortgage tenant security deposits in Chicago. Especially these days, too many tenants are losing their security deposits due to their landlords' financial irresponsibility. There is no bailout for tenants when their landlord goes under.