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Apr. 27 2010 - 12:15 pm | 623 views | 1 recommendation | 7 comments

Should you have to write a letter to get your security deposit back?

Protesters from Metropolitan Tenants Organization gather before the city council hearing

(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.


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  1. collapse expand

    Daley’s proposal passing without the amendments was a boon to tenants. To think – the vast majority of tenants in Chicago don’t even realize the bullet they dodged today. Ald Shiller’s subcommittee will be a good place for the minor issues with the RLTO to be worked out between landlord and tenant groups. No need to gut the whole thing with Chicagoland Apartment Association & Ald Stone’s scary amendment.

  2. collapse expand

    Hi Megan,

    Thanks for the post on an important, under-reported issue. Thanks for going to Council Chambers so we don’t have to. Thanks for writing up the antics of that whacky alderman of mine. Say, I am a battered veteran of the Brewer campaign in the 50th during which I met an Alan C., are you any relation by any chance?

    One detail in your story which has raised eyebrows among veteran Shiller-watchers is that Shiller is herself a landlord. Did you perhaps get any more detail on this you could share?

    Thanks again!
    Hugh

    • collapse expand

      Hi Hugh –

      So read my correction above, but apparently Shiller is not a landlord as I previous wrote. However, she did say that she was during the meeting – apparently the entire room of 150 people all misunderstood her together.

      Maybe this is something to look into? I don’t generally report on Shiller or her ward, but maybe there’s something there.

      I sincerely apologize for the mistake. I hope you will take my good word that she did say it, and other people heard it too! Still, it was an error and the error is mine.

      In response to another comment. See in context »
  3. collapse expand

    ok, thanks for the reply, Shiller transcription errors go with the territory, she has developed an oratory style which relies on lengthy dumps of verbiage which avoid actual noun-verb-predicate statments for which she might be held accountable

  4. collapse expand

    You heard testimony from many owners yesterday, and I was one of them. In all cases the security deposit was returned along with interest. In ALL of the examples cited, there was no dispute between tenant and landlord regarding the fact that deposit and interest were returned. In all of these cases, and I can assure you there are many many more, these were examples of the strict liability of the CRLTO not allowing the judge to consider evidence that would cause each case to end.

    I hope that Alderman Shiller and her sub-committee got the message that something needs to change.

    I know that the owners group tried to take advantage of the foreclosure issue to get our concerns and inequities addressed. The notion that we are trying to gut the RLTO or that we are trying to take advantage of tenants is simply nonsense.

    Our complaints are not about interest on security deposits, comingling, or the time required to return deposits. Owners live in fear whenever we have a tenant not paying rent. We live in fear that the tenant that stiffed us for thousands of dollars in rent will cost us thousands of dollars more because of a small technical error.

    I encourage the sub-committee to find these tenants that have sued owners for one of these minor technical infractions. I believe that they will find that the tenant received very little in compensation and that their attorneys are receiving large sums. I think they will find that these cases are not about the tenant, not about an abuse that the CRLTO is attempting to avoid, and not about the landlord trying to take advantage of a tenant. I think you will find that this is about the profit motivation of a small group of lawyers that have found a way to make large sums of money because of the way the CRLTO is written.

    I hope that Alderman Shiller and subcommittee will take a serious look at the issues and injustice and come up with a solution that will allow good landlords to focus on running their properties and working on ways to make better neighborhoods in Chicago.

    • collapse expand

      First of all, it cannot be proven that there was no disputes between any of the landlords and their respective tenants. Second – I precisely remember one landlord near the end stating that he had in fact co-mingled the security deposits of all his tenants for a period of time.

      YOU as a landlord may not be trying to take advantage of tenants. But MTO counsels 10,000 tenants a year, many of whom have LLs who use loopholes like the one that would result from the passage of Ald Stone’s amendment to do precisely that – take advantage of their already vulnerable tenants.

      Tenant advocates do not want good landlords to be put out of business. That is why tenant advocates fully support Ald Shiller’s subcommittee working with tenants and landlords to make sure LLs arent hurt by the law.

      The problem is that Chicagoland Apt Assn took advantage of Daley’s amendment – that in no way currently affects landlords – and tried to attach an amendment that would open wide loopholes for bad landlords to keep SDs and interest from their tenants if each and every one of their tenants didnt write an annual letter demanding interest and one @ the end of their tenancy asking for their deposit.

      And MTO had the biggest showing @ this meeting. MTO employs zero attorneys on its staff. MTO has no profit from any decision made by the buildings committee. Tenants want good landlords and want to work with them to address their concerns while keeping loopholes closed for bad landlords. Can we agree on that?

      In response to another comment. See in context »
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    I'm a journalist living in Chicago writing about poverty and public housing. I don't come from the streets - I grew up on a farm. But I'm passionate about urban issues and getting to know people who are completely different from me. I'm quirky, funny and friendly.

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