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Damage Deposits

Deposit Refund Law

The Illinois Security Deposit Return Act, 765 ILCS 710/1 states:

A lessor of residential real property containing 5 or more units, who has received a security deposit from a lessee to secure the payment of rent or to compensate for damage to the leased property, may not withhold any part of that deposit as compensation for property damage unless he has, within 30 days of the date that the lessee vacated the premises, furnished to the lessee, delivered in person or by mail directed to his last known address, or by electronic mail to a verified electronic mail address provided by the lessee, an itemized statement of the damage allegedly caused to the premises and the estimated or actual cost of repairing or replacing each item on that statement, attaching the paid receipts, or copies thereof, for the repair or replacement. If the lessor utilizes his or her own labor to repair any damage caused by the lessee, the lessor may include the reasonable cost of his or her labor to repair such damage. If estimated cost is given, the lessor shall furnish the lessee with paid receipts, or copies thereof, within 30 days from the date the statement showing estimated costs was furnished to the lessee, as required by this Section.

If no such statement and receipts, or copies thereof, are furnished to the lessee as required by this Section, the lessor shall return the security deposit in full within 45 days of the date that lessee vacated the premises.

Upon a finding by a circuit court that a lessor has refused to supply the itemized statement required by this Section, or has supplied such statement in bad faith, and has failed or refused to return the amount of the security deposit due within the time limits provided, the lessor shall be liable for an amount equal to twice the amount of the security deposit due, together with court costs and reasonable attorney's fees.

Illinois has no comparable statute for houses or properties with fewer than 5 units. In those cases, your lease should state conditions and timing for deposit refund. Consider adding a clause to your lease requiring the landlord to give you an itemized statement of damages and specifying the time period for refund.

URBANA CITY CODE (Section 12.5-20) imposes the same requirements as the state law, except those requirements apply to ALL rental properties, even properties with fewer than five units, including a duplex or a house. Urbana city code, also says:

The decorating of the rental unit after the tenant vacates, including painting and carpet cleaning, unless walls or carpets are damaged beyond normal wear, shall not be considered as damage and the costs thereof shall not be charged to the security deposit.

In Urbana, a landlord should not charge a tenant for carpet cleaning or painting unless the tenant has done damage beyond normal wear or unless the tenant agreed in the lease to pay for carpet cleaning or painting as a service.

If you will be disputing the amount of your deposit refund, remember these important tips:

By cashing the check, you make yourself vulnerable to a claim by the landlord that you accepted the amount of the check as settlement of the deposit. The reason you should keep the envelope that was mailed to you is to prove the date it was postmarked, in the event that the landlord did not comply with the time periods required by the state law.

Note that the law requires the landlord to send your deposit refund to your "last known address." To avoid dispute over whether or not you gave the landlord your new address, register a change of address with the post office. Then, if the landlord sends your refund to the address of the property you rented from him/her, the refund will be forwarded to you by the post office. If you had roommates, also check with them before you assume the landlord failed to refund your deposit. Some landlords send a statement and partial refund to each roommate, but others send all of the documentation and full refund to one person.

Contact the Tenant Union with any questions you may have about your refund.

Interests Due on Deposits

The Urbana Landlord-Tenant Ordinance, Chapter 12.5-19 of the city code requires interest be paid on all deposits of $100 or more if held for at least 6 months if the tenant has not defaulted on the lease. State law applies in all other cities in central Illinois and requires interest be paid only if the property at which you were renting had 25 or more units in one building or in a complex of buildings on contiguous parcels of property, provided you did not default on the lease and the deposit was held for at least 6 months. The rates are different for Urbana and for the rest of the state and are set by law.

Under state law, the Security Deposit Interest Act 765 ILCS 715 these rates apply if the lease started in:

1977-93: 5%

1994: 2.5%

1995-96: 2.75%

1997-98: 2.5%

1999: 1.88%

2000-01: 1.73%

2002: .45%

2003: .40%

2004: .30%

2005: .40%

2006: .55%

2007: .50%

2008: .35%

2009: .25%

2010: .095%

2011: .195%

2012: .005%

2013: .005%

2014: .005%

2015: .005%

Chapter 12.5-19 of Urbana City Code provides that the rate of interest paid on a deposit for a property located within the city limits of Urbana is based on the interest rate paid by the largest bank in Champaign County for a minimum deposit passbook savings account on June 30 prior to the lease start date.

Rates for Urbana: Lease started after June 30 of:

1983-1994: 5%

1995: 2.15%

1996-2000: 2%

2001: 1.49%

2002: .85%

2003: .50%

2004: .25%

2005: .25%

2006: .50%

2007: .50%

2008: .25%

2009: .15%

2010: .15%

2011: .15%

2012: .10%

2013: .01%

2014: .01%

2015: .01%

Interest is calculated from the date you paid the deposit, for the entire time it was held, and is due within 30 days of the end of EACH 12 month lease period.

How to Compute Interest Due on a Deposit

Example: Tenant of a large apartment complex in Champaign paid a $500 deposit on April 5, 2009 and it was held by the landlord until September 10, 2011 at which time $397.53 was refunded. The landlord held the entire $500 for 29 months before making the deductions at the end of the lease so the interest is calculated using the $500.00 figure. The simple math is:

$500 (deposit) x .0025 (rate) = $1.25 (interest for 1 year).

$1.25 divided by 12 (months) = .1042 (monthly amount of interest due) x 17 (months deposit was held for the first year's lease contract) = $1.77 (total interest due on a $500 deposit held in Champaign for 17 months for a lease that started in 2009).

Then, for the second year (2010-2011) the deposit was held for 12 more months at the .095% rate.

$500 (deposit) x .00095 (rate) = $.475 (interest for 1 year). The landlord owes the tenant $1.77 + .475 for total interest on the lease that ran from August 2009 - August 2011 with deposit paid April 2009 and refunded September 2011 = $2.25.

If your landlord held your deposit for several years and did not pay interest each year, you will need to compute the amount for each 12 month period the deposit was held, using the appropriate interest rate for each year.

Penalty: A landlord who willfully fails or refuses to pay the interest on deposit as required by law can be held liable in court for an amount equal to the deposit itself, plus court costs and attorney fees.

Exemption: Damage deposits paid for publicly-owned housing (including University-owned housing) are exempt under state law.

 

The Tenant Union does not provide legal services of any kind. All information provided in this publication is intended to help the average person prevent problems and deal with common concerns of renting. When legal help is needed, always consult with an attorney at law.