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This money is deemed to be
security for any damage to the premises or non-payment of
rent. The security deposit does not relieve the tenant of
the duty to pay the last month's rent. It must be returned
to the tenant upon vacating the premises, if no damage has
been done beyond normal wear and tear
and the rent is
fully paid.
If a landlord fails to
return the security deposit promptly, the tenant can sue
to recover that portion of the security deposit to which
the tenant is entitled.
5-12-080 Chicago Security
Deposits
(a)A landlord shall hold all security deposits received
by him in a federally insured interest-bearing account in
a bank, savings and loan association or other financial
institution located in the State of Illinois. A security
deposit and interest due thereon 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 any creditor of the landlord
or of the landlord's successors in interest, including a
foreclosing mortgagee or trustee in bankruptcy.
(b)Any landlord or landlord's agent who receives a
security deposit from a tenant or prospective tenant shall
give said tenant or prospective tenant at the time of
receiving such security deposit 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 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 security deposit
(c)A Chicago landlord who holds a security deposit or
prepaid rent pursuant to this section for more than six
months, after the effective date of this chapter shall pay
interest to the tenant accruing from the beginning date of
the rental term specified in the rental agreement at the
rate determined in accordance with Section 5-12-081.
(Amendment Effective June 1, 1997) The landlord shall,
within 30 days after the end of each 12 month rental
period, pay to the tenant any interest, by cash or credit
to be applied to the rent due.
(d)The landlord shall, within 45 days after the date
that the tenant vacates the dwelling unit or within 7 days
after the date that the tenant provides notice of
termination of the rental agreement pursuant to Section
5-12-110(g), return to the tenant the security deposit or
any balance thereof and the required interest thereon;
provided, however, that the landlord may deduct from such
security deposit or interest due thereon for the
following:
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(1)Any unpaid rent which has not been validly
withheld or deducted pursuant to state or federal
law or local ordinance; and
(2)A reasonable amount necessary to repair any
damage caused to the premises by the tenant or any
person under the tenant's control or on premises
with the tenant's consent, reasonable wear and
tear excluded. In 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, or actual 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 ate the statement showing estimated
cost was furnished to the tenant.
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(e)In the event of a sale, lease, transfer or other direct
or indirect disposition of residential real property,
other than to the holder of a lien interest in such
property, by a landlord who has received a security
deposit or pre aid rent row a tenant, the successor
landlord of such property shall be liable to that tenant
for any security deposit, including statutory interest, or
prepaid rent which the tenant as paid to the transferor.
The successor landlord shall, within 10 days from the
date of such transfer, notify the tenant who made such
security deposit by delivering or mailing to the tenant's
last known address that such security deposit was
transferred to the successor landlord and that the
successor landlord is holding said security deposit. Such
notice shall also contain the successor landlord's name,
business address, and business telephone number of the
successor landlord's agent, if any. The notice shall be in
writing.
The transferor shall remain jointly and severally
liable with the successor landlord to the tenant or such
security deposit or prepaid rent, unless and until such
transferor transfers said security deposit or prepaid rent
to the successor landlord and provides notice, in writing,
to the tenant of such transfer of said security deposit or
prepaid rent, specifying the name, business address and
business telephone number of the successor landlord or his
agent within 10 days of transfer.
(f) If the landlord or landlord's agent fails to comply
with any provision of the code (a) - (e), the tenant shall
be awarded damages in an amount equal to two times the
security deposit plus interest at a rate determined in
accordance with Section 5-12-081 (Amended February 7,
1997) This subsection does not preclude the tenant from
recovering other damages to which he may be entitled under
this chapter.
If a building contains 25
or more residential units, the landlord must also pay
interest on the deposit from the date it was paid, if held
more than 67 months. (Interest is calculated at the rate
paid by the largest bank in Illinois, as determined by
total assets, on a passbook security account.) Landlord
and tenant matters can become complex. Both landlord and
tenant should consult an attorney for assistance with
particular problems.
Note: There are two
requirements to avoid the obligation to pay interest on
the Illinois Security Deposit. The first requirement is
that there are six or fewer units in the subject apartment
building. The second requirement is that the owner must
occupy one of those units in the building. If you cannot
meet both of those tests, you owe interest on any security
deposits you hold. You would owe interest even if there is
only one unit involved. Interest is payable on the rental
of houses, because they are dwelling units, but they
cannot be owner-occupied. The same applies for condominium
ownership in a high-rise building. You might occupy one of
the dwelling units in the building, if you live in one
unit but rent out another. However, the building contains
more than six dwelling units, regardless of who owns them.
Therefore, interest is payable on security deposits held
for these condominium tenants.
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