If you are looking for a definitive guide on Arlington Heights security deposit law, you came to the right place.

In Arlington Heights—and all of Cook County—there has been a long tradition of disputes between landlords and tenants. These disputes arise from maintenance issues, landlords illegally entering dwellings, and other sources of conflict. However, disagreements over security deposits are often the most frustrating and intense. This is because it’s common for renters to leave their apartment or house in excellent condition when they vacate, only to have a dishonest landlord withhold their deposit without legitimate cause. Until recently, Arlington Heights property owners were able to steal from tenants without significant consequences. However, the new Cook County security deposit law provides substantial protections that did not previously exist.

As of summer 2021, tenants have additional rights that make it easier to recover a security deposit that has been unlawfully withheld. This article will explore the new county-wide security deposit law, explain which renters it applies to, and describe the new rights that tenants have as of June 1, 2021.

If your landlord is stealing your deposit, it is important to get legal help as soon as possible. If you are a Cook County tenant click here to talk to us.

The Old Law (Pre-Cook County Security Deposit Legislation)

The City of Chicago has a tradition of protecting tenants from landlord misconduct. One such protection is the Chicago security deposit law. Unfortunately, renters living outside of the city proper have not enjoyed this high level of legal protection. Prior to the recent enactment of the Cook County security deposit law, Arlington Heights tenants were covered only by the Illinois Security Deposit Return Act. Unfortunately, the Act has significantly limited reach. As a result, many Arlington Heights security deposit issues are not regulated by this law. Prior to June 2021, tenants who were not protected by the Act had to instead rely on breach of contract claims.

Overview of the Illinois Security Deposit Return Act

While the Chicago Residential Landlord and Tenant Ordinance offers significant protections to renters who live within city limits, The Illinois Security Deposit Return Act is limited in scope. As previously discussed, it only protects Arlington Heights residents against security deposit theft in certain situations. To be applicable, the tenant must live in a building that contains at least five dwelling units. Furthermore, condominium buildings are generally excluded; condo tenants are only protected if their landlord owns a minimum of five units within the building. Unfortunately, this means renters aren’t protected by the Act if they live in stand-alone houses, duplexes, small apartment buildings, most condo buildings, and many other unit types.

In cases where the Act applies, landlords are required to do the following when renters vacate a property:

• Provide tenants with an itemized list of damages within one month of their move-out date
• Return the tenant’s security deposit within 45 days
• Provide tenants with paid receipts for any deductions within one month of submitting the itemized list.

In situations where landlords do not follow the procedure outlined above, or in situations where unlawful deductions are assessed, the Act entitles eligible renters (those living in buildings with 5+ units) to monetary compensation. In addition to case costs and attorney fees, renters are entitled to twice the amount of the deposit that was improperly retained.

Overview of Breach of Contract Claims

Prior to the June 2021 enactment of the Cook County security deposit law, Arlington Heights renters living in buildings with fewer than five units had only one option for recovering security deposits that had been illegally withheld. This option was to claim the landlord had breached the terms of their lease agreement.

Tenants’ breach of contract claims are complicated by a number of challenges:

• Tenants often sign a lease without reading it
• Tenants don’t always understand what they’re signing
• Tenants rarely sign a lease under the advisement of a lawyer who ensures the contract protects their rights
• Leases are generally written by the landlord’s lawyer or an organization that represents the landlord’s interests
• Most leases allow the landlord to retain a security deposit in situations that extend well beyond the expected reasons of property damage and unpaid rent
• Leases typically require the renter to pay the landlord’s attorney fees in the case of a claim
• Leases rarely entitle renters to attorney’s fees (though they do occasionally state that the winner of a case will be awarded attorney’s fees)
• Leases never entitle renters to a sum exceeding the amount of the security deposit.

In other words, leases don’t treat both parties equally—they are heavily skewed in the landlord’s favor. This discourages tenants from making breach of contract claims, even when the landlord is clearly in the wrong.

Money is also a factor. For breach of contract claims, tenants can only be awarded the amount of their security deposit—they cannot receive damages in excess of that amount. Given that the average Arlington Heights security deposit is $1000-$2000, and given that the vast majority of tenants will not be awarded attorney’s fees, making a claim becomes pointless since fees will easily exceed $2000.

Even in cases where the winner will be awarded attorney’s fees, it’s dicey to bring forth a claim. That’s because, should they happen to lose, tenants will have to pay the landlord’s attorney fees in addition to their own. In a situation like this, the renter would forfeit not only the amount of the security deposit but also thousands of dollars in fees. For most renters, it doesn’t make sense to take the risk. Luckily, the shortcomings inherent in both the Illinois Security Deposit Act and breach of contract claims have been resolved with the Cook County security deposit law, which applies in Arlington Heights and which went into effect during the summer of 2021.

Overview of the Cook County Security Deposit Law

The Cook County security deposit law, which is part of the broader Cook County Residential Tenant and Landlord Ordinance (CCRTLO), offers Arlington Heights renters new protections that didn’t exist under the Illinois Security Deposit Act.  These protections are in line with the strong protections of the Chicago security deposit law. The new county-wide security deposit law makes it far more difficult for landlords to illegally withhold deposits.

Who is Covered by the Cook County Security Deposit Law?

Although the new law protects significantly more Arlington Heights renters than the Illinois Security Deposit Return Act did, and though it achieves far better results than a breach of contract claim, a small number of tenants are not covered by the Cook County security deposit law.

The following unit types are not included under the CCRTLO:

• Non-Cook County Units. A dwelling must be located within the Cook County limits in order for the Ordinance to apply.
• Units in certain municipalities. Evanston and Chicago have their own ordinances governing security deposit return and other tenants’ rights issues; therefore, dwellings in these locations are not governed by the Cook County security deposit law.
• Nonresidential Units. Commercial and industrial units are not protected by the CCRTLO.
• Condos or freestanding homes previously occupied by the owner or owner’s immediate family member. If a dwelling is owned and managed by a person who lived on the premises for at least 30 days in the year prior to marketing the property, the unit is excluded. The unit is also excluded if a member of the owner-manager’s immediate family lived there during the same timeframe. Generally, this only applies for the first year of rental and not renewal leases after the first year.

The exclusions mentioned above are the most common. However, it is not an exhaustive list. The following are additional exclusions: hotel/motel rooms (provided the tenancy is temporary, the tenant has not paid monthly rent, and has not lived in the room for more than 31 days); dorms affiliated with an educational institution; fraternity or sorority houses; religious housing such as convents or monasteries; hospitals, nursing homes, rehabilitation centers, and other medical or extended care facilities; employee housing (only if employment is a condition of tenancy); homeless/transitional/overnight shelters; units in a cooperative that are rented by a shareholder; and units for which a sale is pending and the tenant is the buyer.

How Does the Cook County Security Deposit Law Protect Tenants?

The Cook County security deposit law provides most Arlington Heights tenants with substantial rights. For instance, the law protects tenants by doing the following:

• Creating a timeline for returning a security deposit
• Establishing clear conditions under which a landlord may deduct from a deposit
• Capping deposit amounts
• Limiting where and how landlords hold deposits
• Instituting requirements for written receipts
• Regulating the ways in which a deposit may be transferred from one landlord to another when a new owner acquires the property.

What Can Landlords Deduct from Security Deposits, and When Must Deposits Be Returned?

The CCRTLO’s most substantial security deposit protections for Arlington Heights tenants concern the rights bestowed upon renters when they vacate a rental unit.

In accordance with the new security deposit law, there are only two things that may be legally deducted from a renter’s security deposit—unpaid rent and associated court costs (assuming the rent has not already been deducted through some other legal means) and sensible repair costs for property destruction that extends beyond that which would be incurred by typical use. If Arlington Heights landlords deduct from a tenant’s security deposit for any other reason (including wear from normal usage), it is unlawful.

It’s important to note that landlords have no obligation to notify the tenant or take any further actions when they withhold unpaid rent. For instance, they do not have to provide the renter with a receipt.

However, landlords do have several legal obligations if they withhold a portion of the tenant’s security deposit upon discovering property damage when tenants vacate a unit. Within 30 days, landlords are required to submit a list of damages that includes repair/replacement costs (actual or approximated) for each individual item; this list can be either mailed or delivered to the tenant’s last known address.

In such cases, the remainder of the deposit must be returned to the tenant within 30 days of move-out (minus any rent due and not previously deducted). When landlords withhold actual repair costs, they are required to submit receipts to tenants—also within 30 days of move-out. Otherwise, if costs are approximated, the landlord has 60 days from move-out to submit receipts proving the actual cost of repair.

In the event that the landlord does not comply with the standards outlined above and within the specified timeframe, the property owner is required to return the renter’s entire deposit. This must be done no more than 30 days after the tenant moves out. (However, landlords are still legallyable to deduct unpaid rent that is owed and has not been previously withheld.)

The CCRLTO also awards tenants double their deposit amount, plus the deposit itself, in cases where landlords fail to follow the law regarding the return of security deposits. Additionally, the Cook County security deposit law awards case costs and attorney fees. These stiff penalties discourage landlords from illegally retaining deposits; at the same time, the new law has made it easier for tenants to take action in cases where their landlord is in violation of the law.

If your landlord is stealing your deposit, it is important to get legal help as soon as possible. If you are a Cook County tenant click here to talk to us.

Fair Treatment of an Arlington Heights Security Deposit

Beyond limiting the type of deductions a landlord may retain from a tenant’s security deposit, the CCRLTO also governs additional elements of security deposit law.

Requirements for Security Deposit Receipts

When the CCRTLO went into effect in June of 2021, it introduced strict laws that regulate where and how landlords hold their tenants’ security deposits.

When renters make a security deposit payment using non-electronic means (such as check or cash), landlords are required to give them a receipt that states the following:

• Deposit amount
• Deposit date
• property owner’s name
• Name and signature of the individual who accepted the deposit
• Description of the rental unit

When renters make a security deposit payment via electronic means (such as electronic bank transfer or Venmo), landlords may instead provide a digital receipt that states the following:

• Description of the rental unit
• Digital or electronic signature of the individual who accepted the deposit

In cases where landlords fail to provide a compliant receipt, they are legally required to return the full deposit at once.

Holding Deposits

Upon collecting a deposit (regardless of whether it was paid electronically or non-electronically), Arlington Heights property owners are legally required to hold the funds in a federally insured bank. This bank does not have to be located in Arlington Heights or Cook County; however, it does have to be located within the state of Illinois. This bank has to be named in the signed copy of the lease that is given to the renter. If the landlord later transfers the funds to a different financial institution, they have to alert the tenants, in writing, within two weeks (14 days) or a reasonable timeframe.

It is illegal for landlords to hold security deposits in one of their personal accounts. Instead, the funds must be deposited into a separate account that is inaccessible to creditors, bankruptcy trustees, or a foreclosing bank.

If landlords do not hold tenants’ security deposits in a way that is compliant with the Cook County security deposit law, they have two business days after receiving the tenant’s written notice to remedy the violation. If they do not become compliant within this time frame, renters have the right to receive double their deposit amount. They are also awarded case costs and attorney fees.

Transferring Deposits

It’s common for landlords to sell their rental units or otherwise transfer control. When this happens, the new landlord is legally required to notify tenants of this transfer in writing within 2 weeks (14 days). The written notice must contain the following information:

• Notification that the new landlord has received and is holding the deposit
• Name, address, and phone number of the new landlord and, when applicable, their agent.

In the case of such transfers, the new landlord becomes responsible for the original deposit amount that was paid to the prior owner. The prior owner is also responsible for the deposit except in cases where they turn over the deposit to the new owner and notify the tenant, in writing, within 10 days of doing so. By law, this written notice has to include the new landlord’s name, phone number, and business address. (The notice is also compliant if it instead contains the name, phone number, and address of the landlord’s agent.)

If the deposit is not transferred in accordance with the rules stated above, landlords must remedy the violation within two business days of receiving the tenant’s written notice. If they do not become compliant within two business days, renters have the right to receive double their deposit amount and are awarded both case costs and attorney fees.

Security Deposit Caps

The Cook County security deposit law makes it illegal for landlords to require or accept security deposits that are equal to more than 1.5 times the unit’s monthly rental fee (150%). Furthermore, it is illegal for a property owner to circumvent this cap by requiring renters to pay additional fees on top of the deposit.

When landlords require a deposit that exceeds the value of monthly rent (up to 150%), tenants do not have to pay the excess amount all at once. Instead, they have the option to pay in as many as six installments. These installments must all be for the same amount, and the tenant may take up to six months from the move-in date to pay.

In the event that the landlord requires a deposit exceeding 150% of monthly rent, or does not allow the tenant to decide when to pay the portion of the deposit exceeding monthly rent, the Cook County security deposit law awards tenants double their deposit amount. Renters are also awards case costs and attorney fees.

Overview of Arlington Heights Security Deposit Law

In the past, Arlington Heights tenants—and all Cook County renters outside the city of Chicago—did not have robust security deposit protections. Some renters were protected by the Illinois Security Deposit Return Act, but a majority were unprotected. When landlords unlawfully withheld deposits from these unprotected renters, their only recourse was to file breach of contract claims that were, in most cases, cost-prohibitive. The new Cook County  Residential Tenant and Landlord Ordinance, which went into effect in June of 2021, includes a new security deposit law that provides much stronger protection for most tenants. It gives renters substantial additional rights, makes it easier for tenants to hold landlords accountable when they violate the law, and includes penalties that make it financially feasible for tenants to file claims if their deposits have been unlawfully withheld. The Cook County Security Deposit Law is a vast improvement over the previous laws and remedies.

If your landlord is stealing your deposit, it is important to get legal help as soon as possible. If you are a Cook County tenant click here to talk to us.

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