I've handled many, many cases involving landlord-tenant disputes in
Chicago, and one of the most frequently litigated (or settled) areas of
the law among landlords and tenants is the security deposit portion of
the Chicago Residential Landlord Tenant Ordinance. And after representing both landlords and tenants, it's become more clear than ever that it's time to amend these statutes.
review, the Chicago Residential Landlord Tenant Ordinance provides
remedies for tenants -- and landlords -- for violations of lease terms
and other city ordinances. The Ordinance also explains
often-misunderstood portions of lease agreements. The Ordinance is
extremely helpful for both landlords and tenants.
most punitive portions of the Ordinance deal with security deposits, and
the landlord's obligations with respect to security deposits. These
duties include providing annual interest payments, statements of
interest, the name and location of the bank holding the deposit, and so
forth. In some instances, the punishment for violating these sections of
the Ordinance is double the security deposit. Interest and attorney's
fees are also applicable in certain violations.
The purpose of
these harsh punishments has been to ensure that landlords don't
co-mingle or misuse tenant deposits. This is viable reasoning. After
all, I know of landlords who would make some good money by pooling
deposits together and investing wisely. However, it's not the violation
itself that should be amended, but the punishment.
Double the security deposit plus interest and attorney's fees is excessive, even if the courts have ruled that it is not.
This is reward is especially harsh today, given the fact that many
potential commercial real estate investors are electing to buy property
outside of Chicago, citing the Ordinance as a reason.
that all of this can be resolved if the landlord simply follows the
Ordinance and complies with the law. However, the impact of such
punitive legislation is starting to hinder the real estate marketplace
in Chicago. In the end, for what usually amounts to the contents of a
tip jar, property owners are on the hook for, generally, thousands of
dollars and lengthy litigation.