Chicago Landlord Returned Security Deposit No Interest

26 Replies

Hello BiggerPockets,

My former Chicago landlord just mailed my security deposit back without interest. I know it'd be only about $1 but it seems he should know the procedure for this sort of thing and should not be taking any chances. Should I request the interest, call a lawyer, or leave it alone?

@David Rogers  deposits are held in trust accounts   Trust accounts are not allowed to collect interest why do you think they are ?  what a crazy question.. be happy you got your deposit

Do you know, if the Security Deposit was in Interest paying account ? and was the Security Deposit with landlord more than 2 years ? 

I have the security deposit more than 3 years in a separate checking(escrow) account and does not pay any interest. 

I guess it would depend on the penalties for him not doing it.  If he has to pay you a bunch of money if he fails to follow the law, it would be worth pursuing it.  Then, you could negotiate out of court.

For instance, let's say the penalty for failing to follow the laws regarding sending you bank statements that show your deposit amount and any interest (I know some states require this) is twice the amount of the deposit.

Then, you write to the landlord with a copy of the law and say he now owes you twice the deposit, but you'd rather not have to go back for court, so you'd accept just the deposit amount as a settlement.

Unless it's something like that, I wouldn't bother.

I thought there would be more sticklers on BiggerPockets. Perhaps I should have provided more background, especially for out of towners. In Chicago, a tenant's security deposit must be held in an interest bearing account. The city comptroller sets the interest rate that must be paid out every 12 months, and this interest must be included along with the security deposit. My question may be silly in OR, but it's a matter of 2X the deposit + court costs in Chicago: http://bc-firm.com/chicago-security-deposit-law/

My landlord's failure to pay back this seemingly insignificant dollar seems to me to be sloppy landlording. Would Chicago landlords (or other landlords) consider not paying me interest a serious oversight on his part, or do many of you not pay back the interest?

This is the whole reason I switched from collecting Security Deposits to collecting Move In Fee's, just so I don't have to deal with petty interest on Deposits and worry if tenants will be sticklers or not.

Good grief - are you serious?  Maybe there is more to this story you aren't telling us?  I'm not trying to pick on you because I think you are asking in earnest so here goes.  I was a landlord in Chicago for many years and while I always paid the interest (it really is a pittance) for many years, I was not aware that the interest had to be paid out periodically for long term tenants and I would just give it back at the end.  Once I learned that it had to be paid out periodically, I did so and frankly my tenants were always surprised and didn't expect it.  My question for you is what is your aim here?  I believe there is a VERY big difference between knowing your rights to protect yourself and knowing your rights so you can wait for a mis-step to pounce and hopefully profit from someone's mistake.   If your landlord was halfway decent (and if you got your security deposit back - that says a lot) for goodness sakes, let it go.   Give a little grace, maybe someday you might need it too.  

Lest you think we are taking it easy on one of our own, I can assure that the responses would be the same if there was a landlord on the forums up in arms because an otherwise decent tenant moved out owing $1.00.  Move on...

If It were me,  I'd call the landlord, give hime a heads about the law, and possible penalties that he would face if he did this to the wrong tenant.  I'm hoping you aren't the wrong type of tenant.  

Tell him you don't want the interest, but just thought you'd try to save him from someone that would soak him for 2X the deposit + court costs over a dollars worth of interest.

David, it looks like you are less concerned about getting your $1 back and more interested in getting easy money off someones mistake. There's a lot of people out there who do that. 

Not a good way to "win" in life. 

Originally posted by @David Rogers :

I thought there would be more sticklers on BiggerPockets. Perhaps I should have provided more background, especially for out of towners. In Chicago, a tenant's security deposit must be held in an interest bearing account. The city comptroller sets the interest rate that must be paid out every 12 months, and this interest must be included along with the security deposit. My question may be silly in OR, but it's a matter of 2X the deposit + court costs in Chicago: http://bc-firm.com/chicago-security-deposit-law/

My landlord's failure to pay back this seemingly insignificant dollar seems to me to be sloppy landlording. Would Chicago landlords (or other landlords) consider not paying me interest a serious oversight on his part, or do many of you not pay back the interest?

 Did he live in the building?

Thanks Shawn and Tim. I'll probably just remind him that a future predatory tenant might use this opportunity to take advantage of him.

@brie schmidt The landlord lives in a different building.

Originally posted by @David Rogers :

Thanks Shawn and Tim. I'll probably just remind him that a future predatory tenant might use this opportunity to take advantage of him.

@brie schmidt The landlord lives in a different building.

 Was he a good landlord?  Or a jerk?  Karma goes both ways.  Evil grin.

Did someone really start a thread over $1? You sound like an annoying tenant. 

@David Rogers  and you want to be a landlord? You will never succeed focusing on things like this. If you need the dollar, I will mail it to you.

@David Rogers a money order costs $1.25 and stamp is $0.49 so looks like you would owe me money. Do you see how silly this all is? Business requires common sense.

@David Rogers Multiple people are offering you money. Looks like you have created a syndicate. Have you paid all applicable government fees? This could be a RICO case. I would hate do drag you through court, prison time, and you paying hundreds of thousands in fines. I'll settle with you right now for 25%.

; )

Thanks for making landlords aware of the law. Tenants may not be aware (some are) but blood sucking attorneys are. I did an eviction several years back. She used one of those BSAs who knowing that she was due 2x the deposit (which you cannot use against her judgement) and that he could drag this through the court system used this leverage to get himself $800 and allow her another 30 days to stay in my apartment. The file was sealed so the eviction never shows up in public records. I now use move in fees instead of security deposits. Should you ask for your interest due? No. Should you make him aware of the law ? Yes. Thank you again.