Saturday, September 20, 2008

What is the amount "Wrongfully withheld" under Evanston RLTO?

The Evanston Residential Landlord and Tenant Ordinance (ERLTO) is unique in Illinois. It applies to almost all rental agreements in the city; condos, houses, and even apartments in owner occupied buildings with fewer than six units. The ERLTO requires a landlord to account for and/or return a tenant's security deposit within 21 days after the tenant vacates. This 21 day rule is the shortest timeframe in the state. Even in Chicago, and every other place in Illinois, a landlord has 30 days to account for a deposit in writing after the tenant moves out, and another 15 days after that (45 days after move-out) to return whatever is coming back to the tenant from their deposit.

The ERLTO provides at ERLTO § 5-1(C) that:

“Upon termination of the tenancy, property or money held by the landlord as security or prepaid rent may be applied to the payment of accrued rent and the amount of damages which the landlord has suffered by reason of the tenant’s noncompliance with section 5-3-4-1 of this chapter, all as itemized by the landlord in a written notice delivered to the tenant together with the amount due twenty one (21) days after the tenant has vacated his unit. Any security or prepaid rent not so applied, and any interest on such security due to the tenant, shall be paid to the tenant within twenty one (21) days after the tenant has vacated his unit.”

Under ERLTO § 5-1(F):

“If the landlord fails to comply with subsection (C) of this section, the tenant may recover the property and money due him together with damages in an amount equal to twice the amount wrongfully withheld and reasonable attorney fees.”

Note that, unlike the statewide
Illinois Security Deposit Return Act, there is no requirement that a tenant prove their landlord's failure to comply with subsection (C) was willful, a refusal, or even knowing. This section is strict-liability like section 080 of the Chicago Residential Landlord and Tenant Ordinance.

We have had a case where the deposit was accounted for in writing and partially returned 22 days after the tenants moved out. At trial, the court awarded the tenants $1,750 out of their mostly withheld $3,300 security deposit plus interest. The trial court refused to award the tenants twice the amount wrongfully withheld or attorney fees though, since the landlord's failure to comply was only by one day.

The case had to go up to the
court of appeals yielding a Rule 23 Order reversing the trial court's refusal to award twice the amount wrongfully withheld plus attorney fees.

On remand, the trial court had to decide what the amount "wrongfully withheld" was. We argued it had to be twice the whole $3,300 security deposit plus interest. The landlord of course argued it was only the $1,750 that should be doubled. Our argument in support of doubling the whole deposit in this case was as follows:

The ERLTO talks about twice the amount "wrongfully withheld" and also refers to return of the amount "due." These must have different meanings because “when the legislature uses certain words in one instance and different words in another, it intends a different meaning.” Blue Cat Lounge v. License Appeal Comm’n, 281 Ill. App. 3d 643, 646 (1st Dist. 1996). Under the Illinois Security Deposit Return Act, the tenant can recover twice the amount "due." The appellate court has held that this just means twice the amount the landlord kept and shouldn't have. In contrast, the amount "wrongfully withheld" is the amount that was not returned or accounted for within 21 days after the tenants move out, under the ERLTO. In a case where a landlord doesn't mail their written accounting for all the deposit they are withholding until 22 days after the tenant moves out, they have wrongfully withheld all of the deposit and interest. This again makes the ERLTO unique, because it does not entitle a tenant to two times the full amount of their security deposit in all cases (unlike the Chicago RLTO, which does). But the ERLTO also does not limit the tenant to two times the amount of deposit "due" (unlike the Return Act, which does).

In our case the trial court did enter judgment for the tenants for their $1,750 due, plus penalty damages equal to twice the whole $3,300 plus interest "wrongfully withheld" more than 21 days, plus attorney fees. This was the proper result.

1 comment:

Jhony Walker said...

Protection down payment is very important when the agreement is made between property owner and renter. One of the most generally competitive justifications between a property owner and a renter is the protection down payment when you shift from a property.