Thursday, September 22, 2011

Evanston Security Deposit Law Requires a Real "Amount" in 21 Days, not "TBD"

After a 2010 move-out, the landlords kept a whole $2650 security deposit from a group of three Northwestern University students in Evanston, and interest. The landlord claimed to have sent the tenants an e-mail within 21 days after they moved out, which stated that the whole deposit was being kept for various listed items in the amount of "TBD" (to be determined).

After a trial the judge in Skokie held that the tenants were not entitled to any of their deposit back, or relief under the Evanston Residential Landlord and Tenant Ordinance (ERLTO) because the landlord did not have to account for the damage within the 21-day accounting requirement if the property damage took more than 21 days to fix.

On appeal, the Court of Appeals reversed the judgment against the tenants. The Court of Appeals opinion is here. This opinion is subject to petition for rehearing and/or review by the Illinois Supreme Court and so is not necessarily final.

The Court of Appeals held that "the trial court erred when it found that defendants were not required to include a dollar estimate of the damages when they notified plaintiffs that they intended to withhold part of the security deposit. Defendants' use of 'TBD' as a placeholder was insufficient to satisfy the ERLTO."

The Court of Appeals concluded, saying:

"Defendants failed to give plaintiffs proper notice of deductions from their security deposit and failed to return the balance of the security deposit within 21 days as required by section 5-3-5-1(C) of the ERLTO. Defendants failed to prove their affirmative defense of compliance with the ERLTO, and they are therefore liable to plaintiffs. Moreover, defendants are not entitled to any setoff of plaintiffs' damages because they did not assert a counterclaim against plaintiffs. It was therefore error for the trial court to enter judgment in favor of defendants. We accordingly reverse and remand with directions to enter judgment for plaintiffs and for the determination of damages and reasonable attorney fees pursuant to section 5-3-5-1(F) of the ERLTO."

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