Q: Chicago: A signed lease states that the security deposit will be returned w/out interest, is a renter able to demand it?
We are landlords in Chicago, our renters are asking for interest on their security deposit. In our lease, which they signed, it says in a paragraph under the security deposit section and stated amount: "Interest and Security Deposit. In accordance with Illinois law, (765 ILCS 715/1, 715/2) and subject to the exception set forth in this Paragraph, such deposit shall be returned to Tenant, without interest, and less any set off for damages ..." Our exiting tenants, one who is a lawyer, says we need to pay them interest. They signed the lease which says no interest will be given. We are only one unit in a 3 unit building. We feel we are in the right but wanted to make sure.
A: The lease would be subject to the Chicago Residential Landlord Tenant Ordinance (RLTO), which requires interest to be paid on the security deposit. The Illinois statute cited in the lease does not apply to buildings of the size you describe. The RLTO is a very Tenant favorable ordinance and case law - generally - upholds tenant’s rights. Ordinarily the terms of a parties contract will control. To determine if the Ordinance may supersede the provisions of your lease would require research of the case law. The relevant provision of the Ordinance can be found at:
5-12-080 Security Deposits
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