Chicago City Council Amends CRLTO

Over the past couple months, the Chicago City Council has made critical amendments to the city's landlord tenant ordinance. The amended law affords landlords a cure period if they timely return interest on a security deposit to the tenant but where the landlord has miscalculated the amount. A security deposit or the remainder of one must still be returned to the tenant within 45 days of the date the tenant vacates the unit.

The new ordinance also requires that landlords provide certain information about the financial institution where a tenant's security deposit will be placed and imposes a penalty in the amount of two times the deposit amount for non-compliance.

Perhaps most importantly, the amended ordinance places liability for a security deposit upon lien holders who become successor landlords, i.e. where a bank takes over a rental property in foreclosure. Prior to this amendment, banks and other lienholders who foreclosed on a landlord were not responsible for the security deposit. Under the new language of the ordinance, this is no longer the case. It is to be expected that banks and lienholders will challenge the validity of this amendment in the courts.

This blog as well as http://www.chicagorltolaw.com will be updated over the coming months as the CRLTO amendments are litigated and their effects on the landlord-tenant landscape in Chicago become more clear.