Every now and then, we come across “uncitable” orders filed pursuant to Illinois Supreme Court Rule 23(e), that deal with fundamental Chicago Residential Landlord Tenant Ordinance (RLTO) security deposit issues. These are strange birds. They are “out there” in the stream of discourse, however, they cannot be cited (except in rare exceptions) and have no precedential value. Depending on your perspective, this might or might not be a good thing. Given that, why should we care about these cases? Well, they offer a fascinating look into how the appellate court (or at least a portion of the appellate court) feels about an issue. In the next few days, we will walk through a couple Rule 23(e) cases and explore the potential ramifications for landlords and tenants.
Keep in mind, Illinois courts are not bound to follow these decisions. In fact, sometimes the results reached in these cases seem directly contrary to how we expect a court to handle a certain set of facts.
The first of these cases we will explore, Weininger v. Haldes, No. 1-10-2645 (Illinois 1st Dist. 2012) was pretty recently decided. It deals with the question of what can be properly withheld from a security deposit. In this case, the tenant repainted the rental premises a medium gray color without the landlord’s consent. The lease probibited the tenant from “making any alterations to the premises” without the landlord’s prior written consent. The lease also provided that “[i]f Lessee has failed to perform or comply with any of the provisions in this Lease, then Lessor shall deduct any damages from the security deposit.” At the end of the tenancy, the landlord repainted the premises back to the original color and deducted the cost of the painting from the security deposit. Predictably, the tenant sued the landlord for two times the deposit and attorneys fees. The trial court ruled that the lease did not prohibit the tenant from painting the unit and the court determined that the landlord’s deduction was improper and awarded the defendant damages.
The court examined the issue of whether or not a charge for alterations may be properly deducted from a tenant’s security deposit. In reaching its conclusion, the court weighed heavily that an “altercation” such as painting, is not actually “damage” and that the RLTO permits deductions from a security deposit only for damage or unpaid rent. As such, whether or not the tenant breached the lease provision was irrelevant because even if the tenant did, the landlord could not make a deduction for “alterations”.
The implications of the court’s reasoning are far reaching. If a landlord cannot withhold from the deposit for “alterations”, then it seems likely that a landlord could be punished for withholding for other items that do not fit squarely under the categories of “damages” or “unpaid rent”. Late fees, lost key fees, bounced check charges all potentially run afoul of the RLTO if the court continues to narrowly define what can be withheld from the deposit.
What if the tenant had removed the blinds or installed their own curtains? Would these still be alterations instead of damages for which the Landlord cannot receive compensation? One can’t help but wonder what would have happened if the tenant had painted the apartment bright pink! The landlord’s take home message, as usual, is that a landlord in Chicago should be very careful when withholding from a security deposit.
I agree with the court that pet deposits are different and should not be treated like a security deposit.
I doubt many judges will end up going that way though. Otherwise, landlords will split up the deposit into a million “different” deposits and claim none of them are covered. Landlords who don’t treat pet deposits like security deposits need to know the risk they are taking.