Amendment to Illinois Security Deposit Return Act Effective 1/1/2018

The Illinois Security Deposit Return Act has been amended by Public Act 100-0269, effective January 1, 2018.  Some of the amendments are small, like changing the words “rental property” to “rental premises”.  Other changes are more substantive and align the law more with the requirements of the Chicago and Evanston ordinances.  The Illinois Security Deposit Return Act applies to a landlord of residential property containing five or more units who holds a security deposit.  So what’s of substance in the new change?

When a landlord intends to deduct from the tenant’s security deposit, it is necessary that the landlord provide an itemized statement of damages to the tenant including receipts for the repairs or estimates for the damage, with receipts to follow within 30 days after the statement.  The amended law clarifies that this itemization can be served by personal delivery or postmarked mail to the tenant’s last known address or by an email to a verified email address provided by the tenant.  In the event that no statement of offsets is provided, the landlord must return the entirety of the deposit within 45 days.

Here is the text of the actual amendment: secdep100-0269

The amendment adds that if the lease specifies the cost for cleaning, repair, or replacement of a component of the leased premises, the landlord may deduct the dollar amount specified in the lease provided the landlord provides a copy of the relevant section of the lease.  This is not to say that the landlord must specify dollar amounts, only that if the landlord does specify an amount, the landlord may deduct that amount.

The amendment goes on to say that any return of the deposit made within the 45 day period shall be either delivered in person or by postmarked mail to the last known address of the tenant or to “another address provided by the lessee”.  Interestingly, the law adds a provision that “if the lessee fails to provide the lessor with a mailing address or electronic mail address, the lessor shall not be held liable for any damages or penalties as a result of the lessee’s failure to provide an address.”  Is this an “out” for the landlord?  Many landlords will complain “the tenant never provided a forwarding address”.  Unfortunately, I think the law can still be read to require landlords to send to the “last known address” which is the rental property address itself.  Until we get further guidance on this requirement, a landlord should not rely on the fact that a tenant failed to provide a mailing address.

The amendment finishes with a provision that grants some relief to landlords who can’t obtain receipts within 30 days after sending a statement of offsets.  The law provides that if, through no fault of the lessor, the lessor is unable to produce receipts for repairs or replacements, the lessor shall produce an itemized list of the cost of repair or replacement, any other evidence the lessor has of the cost and a verified statement from the lessor detailing why the landlord cannot produce the receipts or copies verifying the lessor has provided all other evidence the landlord has of the cost.  So, this provision does not remove the requirement that a landlord follow up with the tenant but it does provide a bit of relief for landlords who can’t obtain the required information within the timelines provided.

This amendment is a good example of how legislators at the state level are attempting to make the security deposit return system better by acknowledging the logistical difficulties presented to landlords.  This is the kind of reform needed with the Chicago and Evanston ordinances.

I have one VERY MAJOR WARNING to landlords reading this.  If you are in a jurisdiction with local municipal landlord tenant laws regarding the return of security deposits (ie. Chicago and Evanston), please remember that you MUST still comply with those laws.  The local law is likely to trump the state law.  Landlords in Chicago and Evanston, for example, should be very wary of making a deduction for which they have specified a cost in the lease and should not rely upon the waiver of responsibility for not providing a receipt when one cannot be obtained nor should they expect any mercy if the tenant fails to provide an address.  Remember to comply with the local municipal law to the letter, and, of course, if in doubt, contact an attorney for advice (and, out of mercy to your attorney, do it before the 30th day!).

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