Illinois court upholds nonrefundable move-in fees under CRLTO

nonrefunableLandlords win case over move-in fee in lieu of security deposit

For a number of years, landlords in the City of Chicago have sought to avoid the undue burdens and unreasonable potential liability resulting from the Chicago Residential Landlord Tenant Ordinance’s requirements related to security deposits by collecting all kinds of “non-refundable fees”.  Some landlord collect a “non-refundable processing fee”, administrative fee, additional rent, or a “non-refundable move-in fee”.  Tenants rights attorneys and advocates have long shouted “no fair!” at landlords engaging in such practices.  One advocate I know said “this is just the way landlords are trying to avoid liability for security deposit violations!”  Duh!

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Chicago Association of Realtors says “NO” to Chicago Security Deposits!

chicago security deposit leaseLocal Realtor group recommends Chicago landlords avoid taking a deposit!

The Chicago Association of Realtors just released the 2013 revised version of their Chicago Apartment Lease.  Interestingly, one traditional item is missing from that residential lease.  The Chicago Tribune reported earlier this week (the story is behind a paywall so I have not bothered to link it) that the realtor organization has taken a formal position against the practice of collecting a security deposit from residential tenants with leases governed by the Chicago Residential Landlord Tenant Ordinance!

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2014 City of Chicago CRLTO Security Deposit Interest Rate set!

2014rateWell, here’s an early New Year’s present!  Erin Keane, acting Comptroller of the City of Chicago has released the new rate of interest on security deposits governed by the Chicago Residential Landlord Tenant Ordinance for the period from January 1, 2014 to December 31, 2014.  This rate changes annually and dictates the interest to be paid to tenants under Section 5-12-080 of the CRLTO.

The rate for 2014 is:

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Unciteable CRLTO cases

Every now and then, we come across “uncitable” orders filed pursuant to Illinois Supreme Court Rule 23(e), that deal with fundamental Chicago Residential Landlord Tenant Ordinance (RLTO) security deposit issues.  These are strange birds.  They are “out there” in the stream of discourse, however, they cannot be cited (except in rare exceptions) and have no precedential value.  Depending on your perspective, this might or might not be a good thing.

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Why does CRLTO compliance matter for landlords?

I know.  Really, I know.  You hate the ordinance.  I hate it too.  I think it is poorly written, contains lots of ambiguities, and is certainly draconian.  The law leaves much room for improvement, however, landlords themselves have brought some of the law’s harshness upon themselves with their past bad acts.  Unfortunately, it is the law.  Landlords need to comply strictly… before it is too late.

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No money? No Keys!

Meet Bill.  He’s owned a condo in the West Loop for six years.  Two years ago, Bill got married.  He and his wife just closed on a new home in Wheaton.  Bill never intended to own his condo this long, but he could not find a buyer in the hosing bust.  He’d still like to sell, but the market is soft.  Things were fine when he was living in the condo, but he now owns a house and a condo and two mortgages.  Cash is tight and his reserves are running low.  Bill puts an ad on Craigslist to find a renter.  A few months and fewer showings later, Bill finds a person interested in renting his condo.  He’s relieved because his mortgages are due on the 15th and he doesn’t have the cash in hand to make both payments. “There’s only one problem”, the prospective renter explains, “I don’t get paid until the 6th, so I have the first month’s rent, but I don’t have the security deposit”.  Bill needs the money to pay his mortgage, so he drafts up a lease with the new tenant and includes a promise that the tenant will pay half of the security deposit on the 6th and the other half of the deposit on the 20th.  Bill takes the first month’s rent and hands over keys to his new tenant!  Now the trouble starts (after the break).

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2012 CRLTO Interest Rate Summary Released

This City of Chicago has made available the 2012 CRLTO security deposit interest rate summary.  The summary can be found here.  This is ONE of the TWO summaries that must be provided to tenants pursuant to CRLTO Section 5-12-170 when a rental agreement (oral or written) is initially offered pr renewed to a tenant or … Read more

Major Alert: CRLTO 5-12-080 (security deposit) judgments not dischargeable by landlords in bankruptcy

security deposit judgment not dischargeable in bankruptcyA new case published on October 14, 2011 by the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division indicates that a judgment obtained by a tenant against a landlord for various violations of Section 5-12-080 of the Chicago Residential Landlord Tenant Ordinance is not dischargeable in bankruptcy as it constitutes “defalcation while acting in a fiduciary” under 11 U.S.C. Section 523(a)(4).  The case is Kennedy v. Frempong and was issued within the broader federal Bankruptcy case: In re Maxwell Kofi Frempong as adversary case 10 A 011773.

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Illinois Security Deposit Return Act amended to protect tenants from foreclosure

State of IllinoisThe Illinois Security Deposit Return Act was amended over the weekend.  House Bill 1674 amends both the the Illinois Mortgage Foreclosure Law and the Illinois Security Deposit Return Act.  The law is intended to protect the security deposits of tenants whose landlords go into foreclosure by first amending the foreclosure law to require that for mortgaged real estate, a court ordering a Sheriff’s foreclosure sale shall also require that the foreclosed property owner shall transfer all security deposits received and interest thereon to the foreclosure purchaser along with an accounting of the deposits that includes the name and address of each  tenant whose money is held.

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