How Do I Protect my Security Deposit?
One of the most frustrating things in the world is losing money, like that five-dollar bill in your back pocket that got eaten by the washing machine. But what about a security deposit? For most people, that’s a lot more than five dollars! Understand that a security deposit is “a cash or bond that is given into another’s custody as a guarantee of performance or to secure possession or occupancy.” Note that it is still your money. In the City of Chicago, the City of Chicago Residential Landlord and Tenant Ordinance, commonly referred to as the CRLTO, ensures you as a tenant, protections to make sure that you get your deposit back. The following article lays out a few highlights and tips to make sure you don’t lose your money!
Always Document a Security Deposit
According to the CRLTO, a landlord must give a tenant a receipt for a security deposit including the owner’s name, the date it was received and a description of the dwelling unit. If the payment is made electronically, the landlord may give an electronic receipt, but the bottom line is there must be proof of the exchange. Tenants should however, not rely on the landlord to play by the rules. Tenants should try to avoid paying a security deposit in cash and instead pay in certified funds so that the tenant can retain a receipt and paper trail.
Security Deposits Need to be Held in a Separate Account
The landlord must hold all security deposits in a federally insured interest-bearing account in a financial institution located in Illinois. The landlord must separate the tenant’s rent and the security deposit, even if the tenant pays it at the same time. Further, the landlord must provide the tenant with the financial institution information within 14 days of the receipt of the security deposit. That means generally within the first month, there should be a notice like this. If it doesn’t come to you, you have a claim from that moment. The tenant should put in writing a demand to know where their money is being held.
Security Deposits Bear Interest…and that money is Yours!
Remember that landlords must hold the funds in an “interest-bearing” account? That interest is yours. And while it’s likely not going to be a huge amount, the landlord must pay the interest each year to you. By not doing so, he or she is in violation of the CRLTO. That means every year, you should see a small dividend from your landlord. If you do not, you can write a demand letter or contact an attorney.
When Do I Get My Security Deposit Back?
A landlord must return all security deposits and required interest, if any, minus unpaid rent and expenses for damages, within 45 days from the agreement is terminated. That means if there are any funds taken out of the security deposit, an itemized invoice must be provided within that 45 day period. The landlord cannot simply take the funds. If 45 days pass, contact the landlord immediately in writing. If the landlord refuses to return your calls or refuses to provide any explanation, it is a good time to contact an attorney.
Missing your Security Deposit? Contact the Shimotake Law Firm today!
If you believe that you are entitled your security deposit or think that your landlord is not doing the right thing, call the Shimotake Law Firm today at (312) 620-6499 for your free evaluation!