As a landlord you ask for a security deposit in order to protect yourself from potential losses to revenue during the lease term. Yet, sometimes there is confusion on the part of landlords as to what types of things can be retained from the security deposit. So today I’d like to share some information on the guidelines we follow.

 

Our office typically retains either one or both of these types of deposits:
Security deposit and/or Pet deposit.

 

PET DEPOSIT

A pet deposit is strictly to cover loss or damage due to animals living in the house and is not considered part of the security deposit to be used for tenant misuse. So if a pet stains the carpet, scratches up the floors or doors or chews on something causing it to need to be fixed you can retain the pet deposit. If not, then we would return it.

SECURITY DEPOSIT

A security deposit is used to cover unpaid rent, utilities, late fees, legal fees etc. on the tenant ledger and/or repairs necessary due to tenant misuse. Security deposits cannot be used to perform routine maintenance or upkeep.  Routine upkeep would be things like replacing flooring, windows, repainting etc. because the life of the product has run out and it’s time to do so. You can only use a security deposit for these things if you can show that it was necessary to repair or replace them because of the tenants misuse. This is one of the reasons we perform a move in walk through with a checklist signed by tenants and use the same checklist at move out. This way we can easily identify any damage caused while the tenant resided in the unit. We ask tenants to be present at the move out walk through and sign the same form so that we can alleviate any disputes at that time if at all possible. We then also ask them to close out any utilities and pay the final bills at that time.

LEGAL GUIDELINES

Illinois law also requires that any deposit withheld (either pet or security) must be accompanied by a detailed invoice showing clearly what was withheld and why as well as a receipt of payment to the vendor who repaired or replaced the damaged items. This must be supplied to the tenant within 30 days of move out. This means that anything you choose to withhold from the tenants security deposit you must actually repair or replace. You many not retain the funds and use them for something else.  We supply a letter showing any/all charges posted to their account and copies of paid invoices with the letter and keep a copy in the tenants file in the event of any kind of dispute later.

 

Because we follow these guidelines we have never had any type of legal action take place following a security deposit that is either withheld or a portion has been withheld. As you know, Illinois is a tenant friendly state and landlords are held to very high standards of care with regards to all aspects of their duties. Therefore, we do everything in our power to protect your interest from lawsuit, frivolous or otherwise.

Finally, we retain all security deposits for you so that when it is time to return them with the appropriate documents every deadline and requirement can be met without you having to worry.

Want to know more about our management services? Give us a call in the office or visit our management website [HERE] for more information.

 

*Note: we are not attorneys and are not attempting to practice law. For legal advice please consult a licensed attorney.

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