2025 IL App (1st) 240317

Plaintiff Shearie Harding filed a complaint against the defendant (owner and property manager) alleging violations of the Chicago Residential Landlord and Tenants Ordinance (RLTO) as it related to security deposits. Specifically, plaintiff alleged that the defendant never disclosed the address of the financial institution where the security deposit was held and never provided a receipt for the security deposit. The trial court dismissed the matter when the defendants provided proof that the plaintiff’s former roommate, Mr. Kenneth Turner, paid the entire security deposit for the lease in question. The facts showed that plaintiff and Mr. Turner (who was not a party to the action) entered into a lease with defendants and it was Mr. Turner who paid the entire security deposit in the amount of $5,000.00. Within one month of the tenancy, the plaintiff moved out of the property, while Mr. Turner continued to reside there under the terms of the lease. The plaintiff’s attorney sought the return of the entire security deposit plus fees and penalties (totaling $16,500.00) alleging that the defendants had failed to provide a receipt or disclose the bank information concerning the security deposit to the plaintiff. While the defendants agreed to release the plaintiff from the lease, the lease continued as it related to Mr. Turner. Defendants stated that since Mr. Turner paid the entire security deposit and continued to reside at the property, they would NOT return the security deposit to the plaintiff.

On appeal, the plaintiff argued that she should be able to seek damages under the RLTO, regardless of whether she paid the deposit, because she was a “tenant” under the terms of the lease. She did not seek return of the security deposit on appeal, only the damages related to the security deposit. The appellate court affirmed the trial court’s ruling. The appellate court reviewed the language of the RLTO where it referenced tenant and the required disclosures by the landlord concerning the security deposit. It found that the plain language of the RLTO “supports the proposition that only the tenant making the deposit, rather than any tenant under the lease, may seek damages…for the landlord’s failure to comply with the requirements…”

Takeaways:

When managing rental units, determine whether a local ordinance exists and is applicable to those rental units.

Be familiar with the many requirements under the Chicago Residential Landlord and Tenants Ordinance if you manage units that are subject to this ordinance.