Can a Security Deposit Be Used For Unpaid Rent in Chicago?

[Lumi Ispas]

Hello Chicago Landlords, 

I just read this today! This is great to know, as most of attorneys have always told me that the security deposit cannot be used towards the last month rent, even when the tenant did not pay his last month of rent.

Do you ever used the security deposit as the last month of rent? Please share anything that will help our BP community!

Can a Security Deposit Be Used For Unpaid Rent in Chicago?

By Aaron Krolik on June 18th, 2013

Posted in Leases, Rental Agreements, Security Deposits

The Security Deposit and Last Month’s Rent Myth – Exposed!

In Chicago, 99% of residential rental agreements contain a provision that a tenant’s security deposit may not be used for payment of rent, including the last month’s rent. Since the beginning of time, this provision has been included in form leases, favored landlords, and confused tenants. Go ahead check your lease now – do you feel better? Was I right?

The question still remains unanswered (until now): May a Chicago tenant legally use their security deposit for payment of their last month’s rent (or any rent) regardless of their signed rental agreement?

The simple answer is “yes.” Now, we need to look at the law.

First, pursuant RLTO Section 5-12-140(a), no Chicago rental agreement may provide that the landlord or tenant agrees to waive or forego rights, remedies or obligations provided under this chapter.

Second, pursuant to Chicago RLTO Section 5-12-080(d), deductions may be made to a Chicago tenant’s security deposit for only two (2) things: (1) any unpaid rent which has not been validly withheld or deducted pursuant to state or federal law or local ordinance ; (2) a reasonable amount necessary to repair any damages caused to the premises, reasonable wear and tear excluded.

Based on a clear reading of RLTO Sections 5-12-080(d)(1) and (2), a Chicago landlord has the right to use a security deposit for unpaid rent and the tenant has that same right. Under the Chicago RLTO, the landlord’s “remedy” for non-payment of rent by a tenant is to deduct from the security deposit.

Now the punch line: The infamous lease provision disallowing use of a security deposit for payment of rent effectively waives and foregoes the rights, remedies, and obligations set forth in the Chicago RLTO 5-12-080(d)(1) as stated above. RIGHT?!

Pursuant to the Chicago RLTO, a provision such as this is unenforceable and If the landlord “attempts” to enforce this provision a tenant may recover two (2) months’ rent as penalty, plus reasonable attorneys fees, and costs. This is no joke and Judges are enforcing this section of the RLTO against Chicago Landlords.

If your Chicago Landlord is unlawfully preventing you from using your security deposit to pay for rent, please Contact Us today.

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