Aurora, IL · Member since 2016 · 14 posts · 4 votes
I recently completed my first year of being a landlord. The lease has ended and I owe the tenants part of their security deposit back. I had to have some repairs completed. Some things I had to sub out and have invoices to backup the cost. However some of the work I did myself. It took time and feel I should account for the labor for the repairs. Am I correct in charging for the time it took me to repair the property to its original state? If so, how do I account for those costs when itemizing the costs in returning the remaining amount of the security deposit?
Thanks in advance for your help!
Bill
This is the actual statute regarding security deposit return for the state of Illinois. it does address landlord labor.
(765 ILCS 710/0.01) (from Ch. 80, par. 100) Sec. 0.01. Short title. This Act may be cited as the Security Deposit Return Act. (Source: P.A. 86-1324.)
(765 ILCS 710/1) (from Ch. 80, par. 101) Sec. 1. A lessor of residential real property, containing 5 or more units, who has received a security deposit from a lessee to secure the payment of rent or to compensate for damage to the leased property may not withhold any part of that deposit as compensation for property damage unless he has, within 30 days of the date that the lessee vacated the premises, furnished to the lessee, delivered in person, by mail directed to his last known address, or by electronic mail to a verified electronic mail address provided by the lessee, an itemized statement of the damage allegedly caused to the premises and the estimated or actual cost for repairing or replacing each item on that statement, attaching the paid receipts, or copies thereof, for the repair or replacement. If the lessor utilizes his or her own labor to repair any damage caused by the lessee, the lessor may include the reasonable cost of his or her labor to repair such damage. If estimated cost is given, the lessor shall furnish the lessee with paid receipts, or copies thereof, within 30 days from the date the statement showing estimated cost was furnished to the lessee, as required by this Section. If no such statement and receipts, or copies thereof, are furnished to the lessee as required by this Section, the lessor shall return the security deposit in full within 45 days of the date that the lessee vacated the premises. Upon a finding by a circuit court that a lessor has refused to supply the itemized statement required by this Section, or has supplied such statement in bad faith, and has failed or refused to return the amount of the security deposit due within the time limits provided, the lessor shall be liable for an amount equal to twice the amount of the security deposit due, together with court costs and reasonable attorney's fees. (Source: P.A. 97-999, eff. 1-1-13.)
This is the actual statute regarding security deposit return for the state of Illinois. it does address landlord labor.
(765 ILCS 710/0.01) (from Ch. 80, par. 100) Sec. 0.01. Short title. This Act may be cited as the Security Deposit Return Act. (Source: P.A. 86-1324.)
(765 ILCS 710/1) (from Ch. 80, par. 101) Sec. 1. A lessor of residential real property, containing 5 or more units, who has received a security deposit from a lessee to secure the payment of rent or to compensate for damage to the leased property may not withhold any part of that deposit as compensation for property damage unless he has, within 30 days of the date that the lessee vacated the premises, furnished to the lessee, delivered in person, by mail directed to his last known address, or by electronic mail to a verified electronic mail address provided by the lessee, an itemized statement of the damage allegedly caused to the premises and the estimated or actual cost for repairing or replacing each item on that statement, attaching the paid receipts, or copies thereof, for the repair or replacement. If the lessor utilizes his or her own labor to repair any damage caused by the lessee, the lessor may include the reasonable cost of his or her labor to repair such damage. If estimated cost is given, the lessor shall furnish the lessee with paid receipts, or copies thereof, within 30 days from the date the statement showing estimated cost was furnished to the lessee, as required by this Section. If no such statement and receipts, or copies thereof, are furnished to the lessee as required by this Section, the lessor shall return the security deposit in full within 45 days of the date that the lessee vacated the premises. Upon a finding by a circuit court that a lessor has refused to supply the itemized statement required by this Section, or has supplied such statement in bad faith, and has failed or refused to return the amount of the security deposit due within the time limits provided, the lessor shall be liable for an amount equal to twice the amount of the security deposit due, together with court costs and reasonable attorney's fees. (Source: P.A. 97-999, eff. 1-1-13.)
Gail,
Thank you for that detailed information. Can I ask where you got the information? I would like to use this as a source for future inquiries.
Thank you,
Bill
Bill Flannagan , you cannot pay yourself and deduct as an expense to work in any capacity for repair, improvements, betterments, resorations, or adaptations. You may deduct cost of materials, rental equipment, and milegage. Reference IRS Publication 527 www.irs.gov
Forget it, the judge won't award you money for your time. Give copies of all receipts and if the security deposit won't cover it, bill them and go to small claims court.
Not sure why some people are saying that you can't charge for your own labor. That's just not correct. It varies state to state, but there are states that a landlord certainly can charge for their own labor.
For instance, in my state (California) the law (Civil Code 1950.5) says that landlords can charge a "reasonable hourly rate" for their labor.
And according to the info that @Gail K. posted above, landlords in your state (Illinois) can also charge the "reasonable cost of his or her labor".
So the only question is what is "reasonable". One way to determine that is to ask an experienced landlord-tenant attorney in your area what he/she has seen upheld in court.
I have previously charged $25/hour for my labor, and was awarded that rate when I had to take the matter to court. However, I recently consulted with a very experienced landlord-tenant attorney (who has done literally tens of thousands of eviction lawsuits) in my area on this very issue, and he said I actually could have charged more. His suggestion was to get quotes for whatever work you intend to do yourself. And then, for example, if Merry Maids quotes you $35/hour for cleaning your fridge out and - if you can clean as good as Merry Maids - then you can charge $35/hour for that work if you do it yourself.
Would this work in your state? I don't know, but that's why I suggested consulting an attorney in your area to be sure. But you can definitely charge something so it would be worthwhile to find out how much is considered "reasonable".
As for going to court and what a judge might award you, you never really know what a judge will award if/when the matter ever has to go to court. It can vary by the judge. But that's no reason not to charge for something that you are legally allowed to charge for.
That was a great explanation. I think that with Gail's information and your advice I have a good path forward on how to manage this. Thank you so much for your effort.
not sure why some suggest your labor is free. It's true your labor is not tax deductible, but you should not work for free. Charge something reasonable like $30/hr and provide pictures of before and after as a proof that the work has been completed. This should be your documentation fr work performed.