The Essential Security Deposit Guide

The Essential Security Deposit Guide

If you’re an apartment landlord, you’re lucky if you’ve never been rudely surprised by a lawsuit claiming you violated the Chicago Residential Landlord and Tenant Ordinance. The CRLTO or RLTO (as it’s known colloquially) is a Chicago municipal ordinance whose express purpose is to regulate apartment rental agreements covering the vast majority of dwelling units within the city. It can be found in Chapter 5-12 of the Chicago Municipal Code.

The penalties that the RLTO imposes on landlords are often grossly disproportionate to the infractions, largely because the ordinance allows tenants to recover their reasonable attorneys' fees and court costs, even in legal proceedings brought to recover something as nominal as a $100 statutory penalty (and even if the penalized omission was utterly harmless). What’s more, dozens of Chicago lawyers specialize in representing tenants in these types of cases. These lawyers aggressively hunt for clients, knowing that a landlord who may have unwittingly violated the ordinance in even the most minor respect will end up having to pay the tenant’s court costs and fees. In the case of multi-unit buildings, they turn just about any individual case into a class action. Over the years, thousands of Chicago homeowners and landlords have been forced to fork over hefty sums, routinely totaling in the thousands of dollars, for failing to comply with the RLTO, even in cases where the tenant was never actually harmed.

The most common pitfalls for apartment landlords under the CRLTO stem from the collection and administration of a security deposit. Landlords should be aware, however, that a Chicago security deposit is also regulated under two Illinois statutes, the Security Deposit Interest Act, 765 ILCS 715/0.01, and the Illinois Security Deposit Return Act, 765 ILCS 710/.01. The obligations imposed under the RLTO are generally more onerous than those under the Illinois acts, so, for the most part, landlords will be in compliance with state law by virtue of complying with city law, but not always (as explained in this guide).

So, in the hope of saving landlords from expensive litigation that ultimately just raises the cost of living for all tenants, Domu offers this manual, free of charge, to the Chicago apartment community. Read it carefully, and use it in good health!