Posts Tagged ‘RLTO’
An August, 2015 Illinois Appellate Court decision has confirmed that a Chicago tenant who successfully prosecutes a counterclaim in an eviction action for damages under Chicago’s Residential Landlord and Tenant Ordinance (RLTO) is entitled to an award for the tenant’s attorney fees. The First District Appellate court in Shadid v Sims rejected the landlord’s argument that RLTO only provides for an award of attorney fees where a tenant prevails in a separate action initiated by the plaintiff.
In the Shadid case, the plaintiff landlord had filed what the court characterized as a “garden-variety eviction lawsuit” for non-payment of rent. The tenants counterclaimed alleging various violations of RLTO. After a bench trial, the lower court ruled that the tenant had met their burden of proving a RLTO violation and that they were entitled to a full offset of the rent then owed. The Court then granted the tenants the right to file a Petition for Attorney Fees, which they did, seeking $9,878. The landlord argued that the tenants were not entitled to attorney fees because they were not the plaintiffs; rather they were defendants and counter plaintiffs. The trial court agreed and dismissed the Petition for Attorney Fees. The appellate court reversed the trial court decision and remanded the case to the trial court with instructions to grant the Petition and award the tenants reasonable attorney fees under RLTO.
Feel free to contact an experienced Illinois landlord eviction law attorney at Kreisler Law if you have questions about how to properly serve eviction notices or any other area of the laws governing landlords and tenants.
The Chicago Residential Landlord and Tenant Ordinance (“RLTO”) applies to all Chicago residential properties in which the owner does not reside or which contain more than six residential units. For landlords who are subject to RLTO, accepting a security deposit means the landlord must literally cross a minefield of possible penalties. The situation is so extreme that it has led a number of Chicago landlords to discontinue the time honored practice of requiring the traditional security deposit in the amount of one month’s rent, in favor of requiring a non-refundable move-in fee usually equal to a fraction of a month’s rent.
The reason for this extreme reaction is that RLTO basically imposes absolute liability in the amount of two times the security deposit, plus the attorney fees of the tenant’s attorney, for violation of each of a variety of technical rules as to the receipt, handling and return of security deposits. The provision of attorney fees for the tenant’s attorney has even given rise to a group of attorneys who make most or all of their income from suing landlords.
The rules are many:
1. Security deposits must be held in a federally insured interest bearing account in an Illinois financial institution.
2. Security deposits must be in an account completely separate from and not commingled with any funds of the landlord.
3. The name and address of the financial institution holding the deposit must be conspicuously disclosed in the written rental agreement signed by the tenant or if there is not a written rental agreement, by a written notice given to the tenant within 14 days of receipt of the deposit.
4. The tenant must be given a receipt when the deposit is received which specifies the amount of the deposit, the name of the person accepting the deposit, and if that person is an agent, the name of the landlord, the date of receipt and a description of the dwelling unit rented.
5. If a security deposit is retained for more than six months, the landlord must pay interest on the security deposit, at the rate specified by the Chicago Comptroller each year, within 30 days after the end of each anniversary of the beginning of the lease term.
6. When the tenant vacates the dwelling unit, the landlord is required to return the security deposit within 45 days after the tenant has vacated.
The landlord may deduct from the returned deposit any unpaid rent and a reasonable amount to repair damages to the unit. If any amount is deducted for damage, the landlord must deliver to the tenant within 30 days an itemized list of the damages and the estimated or actual costs of repair or replacement. If an estimate is provided, then within 30 days, the landlord must provide copies of paid receipts or if the work is performed by the landlord’s employees, a certification of the actual costs of the repairs.
Feel free to contact an experienced Illinois landlord attorney at Kreisler Law if you have questions about the handling of security deposits for properties subject to RLTO or any other area of the laws governing landlords and tenants.