Pursuant to the Chicago Residential Landlord and Tenant Ordinance (CRLTO), landlords are obligated to pay interest on monies held (for six months or more) to the tenant within 30 days after the end of each 12-month rental period by cash or credit to be applied to the rent due.
This year, the City Comptroller has set the annual interest rate for 2015 at .01%. This amount has decreased from last year’s rate of .013%. Although the amount may not seem impactful, landlords should be aware of the potential penalties.
For instance, if a landlord takes a security deposit for $1,000.00 at the beginning of this year, by the end of the 12 month lease term, the landlord will owe $0.10 in interest to the tenant. By failing to pay this amount, the landlord could be on the hook for not only the return of the security deposit but for damages equal to two times the deposit, plus interest, attorney fees, and court costs. An expensive lesson for any landlord to learn.
Additionally, with the requirement to pay interest on security deposits, the landlord is required to attach a copy of the Security Deposit Summary with each lease and lease renewal. If a landlord fails to attach a copy of the Summary, the landlord may again be on the hook for not only a fine for violation of the CRLTO, but also attorney fees and court costs.
If you have questions about the legal requirements of a landlord or the Chicago Residential Landlord and Tenant Ordinance (CRLTO), our experienced attorneys are available.
Call us toll-free at 855-537-0500 or visit us online at www.ksnlaw.com
Summary released from the City of Chicago available here.
You can view the City of Chicago website with security deposit interest rates here.