Should you have to write a letter to get your security deposit back?
(This article has been corrected. Please look for corrections in bold and an explanation at the end. Thanks. MMC)
There’s a very important piece of legislation coming before the Chicago city council, one that would do a lot for ordinary people waylaid by the foreclosure crisis.
But there’s a problem with that bill, or at least a version of it floating around the council chambers. One that could hurt vulnerable tenants around the city.
The main bill is basically this: If you rent an apartment and your building went into foreclosure and is now owned by a bank, that bank still has to give you back the security deposit you paid when you signed your lease.
That’s the part of the bill everyone agrees upon.
But there’s another version with an amendment tacked on that would do something entirely different. That version is sponsored by the Chicagoland Apartment Association, a group that represents landlords, that would require tenants to write their landlord a letter, giving them 14 days to return their security deposit, or they risk not getting it back at all.
This letter flies in the face of the Landlord Tenant Ordinance, which gives a landlord 45 days to return that deposit or face legal action.
Tenants from around the city gathered today before the meeting to support the main bill, but oppose this 14 day notice amendment. Why? Well, they say the people who would be affected by this are the people who are already vulnerable to unscrupulous landlords. People with little knowledge of the law, those who don’t speak English and those who don’t have the money for legal representation.
Alderman Helen Shiller doesn’t like this amendment. She said the amendment would give landlords a financial incentive not to give the deposit back.
“It’s in my economic interest not to do so,” said Shiller. “I would just wait until that tenant contacted me to return their money – most of them they won’t know they have the right, they won’t do it or they might be intimidated.”
Schiller proposed an amendment of her own – one that makes tenants write a 14 day notice before taking legal action because the landlord didn’t calculate the interest on their security deposit correctly. So, for example, when my landlord sent me a check for $12 last year, if I determined that she owed me $15, I should give her 14 days notice before I sue her over $3.
That sounds pretty reasonable, right? I mean, lets cut down on the extraneous lawsuits.
On the other hand, just as there are a lot of unscrupulous landlords out there, there are just as many unscrupulous tenants – people that are lawsuit trigger happy and just like to sue for the fun of it or to see how much money they can shake loose from honest business owners. Those people often mess it up for the rest of us, raising our rents and costs because they were looking out for themselves.
One man giving testimony (I didn’t catch his name) relayed story just like this. His parents and sister bought a building, and the tenants, who lived their only two days while they owned it, alleged that they didn’t get the properly formatted letter, letting them know they would be getting their deposit back. Not that they didn’t get a deposit – they just didn’t get a letter in the proper format. They sued for around $3500, plus legal fees. This poor elderly couple and their daughter paid that out of pocket.
Judith Roettig, president of the Chicagoland Apartment Association, says that the ordinance they favor – the one with the 14 day period for everything – says it doesn’t go against the laws already on the books – the Residential Landlord Tenant Ordinance. Tenants right now can sue for twice their security deposit, plus legal fees, if they don’t get their security deposit and interest within 45 days of moving out.
“This amendment does not absolutely does not change the owners obligation to comply with all aspects of the RLTO,” said Roettig. “It simply provides a way for the landlord and the tenant to work out out before going to court.”
But volunteers who work with tenants at the Metropolitian Tenant Organization hotline say that tenants already have a hard enough time getting their security deposit back. Charlotte Starkes, who volunteers on the hotline, says she talked to one man who paid a $3,800 security deposit – several months rent – and only got $900 back with no notice as to why or what damages he was paying for. Other tenants are told their security deposit is being used to paint or clean the apartment for the next tenant.
“It’s done city wide. This problem doesn’t have a color, a neighborhood, an age or a class. It’s going on everywhere,” says Starkes.
At the moment, there’s a battle going on in the city council chambers. Fifty plus people are waiting to testify on this legislation, before the building committee even votes on it.
So, since we’ve got some time on our hands, what do you think?
UPDATE (2:46 p.m.) : As of about one o’clock, Loreen Targos from Metropolitan Tenants Organization told me that after a couple hours of testimony from both sides, the Buildings committee ended up passing the main bill – without either amendment – unanimously. So now it moves to the full council for a vote. The two amendments will be taken up by a subcommittee chaired by Alderman Shiller.
Apparently, at the end, Alderman Bernie Stone asked, “Is anyone opposed to ending this useless meeting?” No one was. The democratic process at work…
CORRECTION: The original version of this piece stated that Alderman Helen Shiller was a landlord owning 100 units, which she herself stated during the meeting. I took notes on my laptop and have her quoted as saying such. Other people in the meeting heard the same thing. However, the meeting lasted about 3 hours, and I had to leave halfway through because of a prior commitment. Towards the end, this happened, relayed to me by Loreen Targos:
“After you left the meeting, a landlord mentioned something about interest payments and said, ‘Just like Alderman Shiller, I pay my interest at the end of the tenancy…’ and Shiller corrected him and stated that she in fact is not a landlord – she was only using that 100 unit building as a hypothetical. I was confused too because I clearly remember her saying she was a landlord at the beginning of the meeting, not a hypothetical one.”
I sincerely apologize for the misunderstanding. This is part of the problem with up to the minute reporting and last minute press conferences when you’ve already scheduled other interviews.