Landlords Beware! The Chicago Residential Landlord Tenant Ordinance Carries Harsh Punishment, October, 2003

By: Dean J. Lurie

The Chicago Residential Landlord Tenant Ordinance ("RLTO") applies to all Chicago residential leases with the exception of "dwelling units in owner-occupied buildings which contain six units or less." 5-12-020. Many residential landlords in Chicago are not familiar with the RLTO. If you are a landlord in Chicago, you should read the entire RLTO; CLICK HERE for a .pdf copy of the Ordinance (Acrobat required).

Below are some of the RLTO mandates that are rather strict and carry harsh penalties:

1) Security Deposit

	a)	Landlords must keep all Security Deposits in a federally insured interest-bearing account and kept separate and not commingled with the personal assets of the Landlord. 5-12-080(a)
	b)	Upon receiving any security deposit from a tenant, a landlord must furnish the tenant with a receipt acknowledging the amount of the deposit and the name of person receiving it. 5-12-080(b)
	c)	Landlords must pay interest on all security deposits held for over six months determined in accordance with an interest rate set yearly by the City Comptroller. 5-12-080(c).
	d)	Landlord must return the security deposit to the tenant within 45 days from the date the Tenant vacates the premises (or within 7 days from the date tenant gives notice of termination).
		i. If a landlord withholds any rent due to damage in the unit, the landlord must mail an itemized statement of the alleged damage including receipts or estimates of repair within 30 days from the date the tenant vacates the premises. 5-12-080(d).

****If a Landlord fails to comply with any one of the above mandates, the landlord will be liable to the tenant for an amount equal to two times the amount of the security deposit, plus interest, and attorney's fees. ****** 5-12-080(f).

2) Lease Agreements

A summary of the Residential Landlord Tenant Ordinance must be attached to all leases. If a landlord fails to comply, tenant can immediately terminate the lease agreement with no penalty. 5-12-170