Chicago (RLTO) Security Deposit - How the Landlord Must Store the Deposit
If a tenant lives in Chicago and the Chicago Residential Landlord Tenant Ordinance (RLTO) applies, the landlord needs to follow certain rules when the tenant pays a security deposit. .
Where does the landlord need to store the security deposit?
Under the Chicago RLTO, landlords must hold all security deposits in a federally insured interest-bearing account located in the state of Illinois. This means that the landlord cannot keep the security deposit in their personal bank account or use it for their own personal expenses.
The name and address of the bank needs to be on the lease signed by the tenant. If there was a verbal lease, then the landlord needs to provide that information in writing within 14 days of receiving the security deposit.
If the landlord transfers the security deposit to a different financial institution during the lease period, they must inform the tenant in writing within 14 days of the transfer. This ensures that the tenant always know where their security deposit is being held and can retrieve it easily at the end of the lease term.
What happens if the landlord didn't (1) store the security deposit correctly, (2) inform me of where it is stored in the lease, or (3) notify me of its location after transfer?
When a landlord does not follow the law, the landlord is held strictly liable. A tenant may be entitled to damages (twice the security deposit + attorney's fees) when the landlord did not give the tenant a security deposit. The tenant has two years to sue the landlord for the violation. The 2-year countdown starts on the day that the violation happens.
If a tenant has any questions or concerns about their security deposit, it's best to speak with the landlord or consult with a legal professional.
The above article provides information about legal issues but is not the same as legal advice. Legal advice is when a lawyer applies the law to your specific situation. The information in this article does not replace the advice or representation of a licensed attorney. Law Center for Better Housing cannot guarantee the accuracy or completeness of the information in this article and is not responsible for any consequences that may result from using it. You should consult with a licensed attorney to ensure the information in this article is appropriate for your specific situation. Using the information in this article does not create a relationship between Law Center for Better Housing and you as your attorney.