Residential Landlord and Tenant Ordinance

Municipal Code Title 5, Chapter 12

Case Law

Prepared by:
The Legal Assistance Foundation of Metropolitan Chicago
November 20, 2006
 Table Of Contents1

§ 05-12-010 Title, Purpose Scope. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

§ 05-12-020 Exclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

§ 05-12-030 Definitions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

§ 05-12-080 Security Deposits.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

§ 05-12-100 Notice of Conditions Affecting Habitability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

§ 05-12-110 Tenant Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

§ 05-12-140 Rental Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

§ 05-12-150 Prohibition on Retaliatory Conduct by Landlord. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

§ 05-12-170 Summary of Ordinance Attached to Rental Agreement. . . . . . . . . . . . . . . . . . . . . . . 8

§ 05-12-180 Attorney’s Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

RLTO Generally.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

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This case law summary is intended to provide a general overview for tenants and
landlords on how the courts have interpreted various provisions of the RLTO; however, it is not a
substitute for advice from a lawyer. If you have any questions regarding how the law applies to
the particular facts of your case, you should consult an attorney.
§ 05-12-010, Title, Purpose, and Scope

Liberal Construction

As the purpose of the RLTO is to protect and promote the public health, safety, and
welfare of its citizens and to establish the rights and obligations of landlords and tenants, it shall
be liberally construed. Friedman v. Krupp, 282 Ill. App. 3d 436, 443; 668 N.E.2d 142, 147 (1st
Dist. 1996); Accord, Allen v. Lin, 356 Ill.App.3d 405,412; 826 N.E.2d 1064, 1069 (1st Dist.
2005) (stated purpose of RLTO is primary guide in statutory construction).

§ 05-12-020, Exclusions

Six Dwelling Unit Limit of Sub-Section (a) Determined by Total Number of Dwelling Units Not
Rented Units

To fall within the exemption of this section, a building must have six or fewer total
dwelling units. If a building has seven units, but only six or fewer are occupied at the time of
rental, the RLTO still applies. A “dwelling unit” is defined § 05-12-030(a). Meyer v. Cohen,
260 Ill. App. 2d 351, 632 N.E.2d 22 (1st Dist. 1993).

Six Dwelling Unit Limit of Sub-Section (a) Exemption Must be in Separate Buildings.

A “building” “means a structure, or part thereof, enclosing any occupancy including

residential . . . [w]hen separated by a firewall, each unit so separated shall be deemed a building.”
Allen v. Lin, 356 Ill.App.3d 405, 412; 826 N.E.2d 1064, 1069 (1st Dist. 2005) (citing to Chic.
Muni Code, 13-4-010). Thus, a tenant in townhouse, located on a row of 6 townhouses, only two
doors removed from the landlord’s townhouse, is still covered by the RLTO since each
townhouse is a separate building.

“Life Care Facilities” Licensed Under the Life Care Facilities Act Qualify as “Extended Care
Facilities” Under Sub-Section (c).

“Life Care Facilities” licensed under the Life Care Facilities Act, 210 ILCS 40-2(d) (West
1998), qualify as “Extended Care Facilities” under § 05-12-020(c). Antler v. Classic Residence,
315 Ill. App. 3d 259, 267; 733 N.E.2d 393, 399 (1st Dist. 2000).

“Landlord” status is not removed simply by transferring title if there is a notice obligation.

A landlord who sells his property is not relieved of his statutory obligations (e.g. Security
Deposit issues) since a transferor can remain jointly and severably liable until the selling landlord
satisfies any notice requirements under the RLTO (e.g. 5-12-080(e)). Starr v. Gay, 354
Ill.App.3d 610, 616; 822 N.E.2d 89, 94 (1st Dist. 2004).

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§ 05-12-030, Definitions

A Condominium Owner’s Association is Not a “Landlord” as Defined by the RLTO

The RLTO, § 5-12-030(b) defines “landlord” as “the owner, agent, lessor or sub-lessor, or
the successor in interest of any of them.” A condominium association becomes neither a
“successor in interest” nor a “landlord” under the RLTO where it exercises its powers under the
Condominium Property Act (735 ILCS 5/9-102) to bring an action against the tenant of a
condominium owner through the Forcible Entry and Detainer Act. Spiegel v. Hollywood Towers
Condominium Association, 283 Ill. App. 3d 992, 998-9; 671 N.E.2d 350 (1st Dist. 1996).

The Holder of a Tax Deed Does Not Enter Into a Landlord-Tenant Relationship With Any
Current Tenants

The Illinois Revenue Act, 35 ILCS 205/266 (West 1996), provides that the holder of a tax
deed takes merchantable title, free and clear of any prior liens. Therefore, the holder, though a
successor in interest, does not become a “landlord” such that he enters into a landlord-tenant
relationship with any pre-existing tenants of the building, and the RLTO does not apply. Neither
does tenancy at sufferance apply, because there is no prior relationship between the parties and
no oral or written agreement between them. Selvy v. Keyway Investments, Inc., 283 Ill. App. 3d
532, 537; 670 N.E.2d 784, 787 (1st Dist. 1996).

§ 05-12-080, Security Deposits

When is a Unit “Vacated” under Sub-Section (d)?

A tenant vacates when she actually surrenders possession of the leasehold, and the 45-day
window for return of the security deposit accrues at that time. Meyer v. Cohen, 260 Ill. App. 2d
351, 361; 632 N.E.2d 22, 28 (1st Dist. 1993).

Damage Awards Under Sub-Section (f) are Not Abated For Portions of Security Deposits
Actually Returned

The actual security deposit is not included in the statutory damages available under
subsection (f). The RLTO provides for the return of the deposit and statutory damages when the
landlord fails to issue a proper receipt to a tenant or prospective tenant. Solomon v. American
National Bank and Trust Co., 243 Ill. App. 132, 136-137; 612 N.E.2d 3, 10 (1st Dist. 1993).

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The ‘Credit Method’ of transferring security deposits at closing between the owner and a third-
party purchaser does not violate Section 080(a) in that it does not commingle the funds such that
the tenant’s security deposit is at risk.

The ‘credit method,’ which is a transferring of a security deposit as a credit given at the
close of sale of a building, between the current owner and a third-party purchaser does not result
in the commingling of the tenant’s security deposit with the landlord’s assets since it does not
“render the deposit attachable landlord property” or otherwise violate the trust that a tenant’s
security deposit is held in by a landlord. Starr v. Gay, 354 Ill.App.3d 610, 615; 822 N.E.2d 89,
93-94 (1st Dist. 2004). However, there must be a real estate closing that includes a credit in the
amount of the tenant’s security deposit to fall under this defense. Id. at 615-16, 822 N.E.2d at
94.

No Requirement of “Willful” or “Knowing” Violation by Landlord, Generally, under Sub-

Section (f)

Nothing in section 5-12-080(f) requires proof that the landlord’s actions were knowing or
willful. A landlord’s duty to comply with the statute is absolute. If a landlord requires a security
deposit, the landlord is required to pay the tenant interest on that deposit. If he fails to do so, he
is liable to the tenant for the damages specified in the statue. Lawrence v. Regent Realty Group,
Inc., 197 Ill. 2d 1, 9-10; 754 N.E.2d 334, 339 (2001).

Note that in an earlier unrelated case from the Appellate Court, First District, a court held
the opposite, stating that in order to be subject to the penalty provisions of § 5-12-080(f), a
landlord’s conduct must have been willful. Szpila v. Burke, 279 Ill. App. 3d 964, 972; 665
N.E.2d 357, 363 (1st Dist. 1996). The Lawrence court relied on the appeals court (expressly
affirming that part of the case) ruling to overrule Szpila in part, and distinguish it in part. The
appellate court in Lawrence held that where Szpila could be read to require a proof of willfulness
on a single count under § 05-12-080(f), it was overruled. The court went on to distinguish and
limit the proper holding of Szpila: that where there are a series of violations of the section related
to a series of related transactions (the renting of one apartment and the renewal of a lease over a
period of years), and the defendant-landlord has the equitable defense of laches, courts will
impose a requirement that the plaintiff-tenant show willful action on the part of the defendant-
landlord. Lawrence v. Regent Realty Group, Inc., 307 Ill. App. 3d 155, 159; 717 N.E.2d 443,
445-6 (1st Dist. 1999).

Singular award proper for multiple violations of § 05-12-080

Trial court did not err when it merged damages for breach of contract with multiple
violations of Section 5-12-080 of the RLTO. However, tenant was entitled to separate damage
award for violation of Section 5-12-100. Krawczyk v. Livaditis, 366 Ill. App. 3d 375; 851
N.E.2d 862 (1st Dist. 2006)

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Sub-Section (f) Imposes “Statutory Penalties” and as Such Claims Brought Under it Subject to
Two-Year Statue of Limitations

Under the Illinois Code of Civil Procedure, “actions for damages for a statutory penalty”
have a two-year statute of limitations, 735 ILCS 5/13-202 (West 1996). Section 5-12-080(f)
imposes a “statutory penalty,” and is therefore subject to that two-year statute of limitations.
Namur v. The Habitat Company, 294 Ill. App. 3d 1007, 1013; 691 N.E.2d 782, 786 (1st Dist.
1998). Where Plaintiff’s cause of action is based upon commingling of assets, it accrues when
the landlord deposits the security deposit. Id. [See also discussion of § 05-12-170, infra.]

But see Sternic v. Hunter Properties, Inc., 344 Ill.App.3d 915, 918-19; 801 N.E.2d 974,
976 (1st Dist. 2003), holding that under 5-12-150 and 5-12-110(e) the statute of limitations is 5
years, as allowed by 735 ILCS 5/13-205 (recovery of personal property or damages for the
conversion thereof), because these damages are not statutory penalties because they do not
specify an amount to be awarded for any violations or impose a formula for calculating an award
without regard to the actual damages.

There are no “de minimus” or “no harm” exceptions to this section.

All relevant authority rejects excuses for commingling and the “no harm” argument
where the security deposit is returned. Plambeck v. Greystone Management, 281 Ill. App. 3d
260, 272; 666 N.E2d 670, 676-7 (1st Dist. 1996).

Security Deposits are held “in trust” by the landlord, and thus are not part of the Bankruptcy
Estate of any Landlord in a Bankruptcy Filing and the Landlord’s Use of the tenant’s Security
Deposit is a “defalcation while acting in a fiduciary capacity” and is not a dischargeable debt.

A landlord holds the tenant’s security deposit in trust, pursuant to the standards under
5-12-080(e), and thus the landlord is a fiduciary of that trust. Thus, if a landlord spends the
money they have committed and act of “defalcation” and the debt (i.e. the security deposit and
any damages) are not dischargeable in bankruptcy (see 11 U.S.C. § 523 (a)(4)). In Re McGee,
353 F.3d 537, 540-41 (7th Cir. 2003); see also, Starr v. Gay, 354 Ill.App.3d 610, 613; 822
N.E.2d 89, 92 (1st Dist. 2004), holding that Section 080(a) is “designed to keep tenant monies
out of the reach of creditors . . . [and to prevent] a landlord’s intentional or inadvertent personal
use of tenant funds.”

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§ 05-12-100, Notice of Conditions Affecting Habitability

No “de minimus” or “materiality” exceptions to sub-section (a)

Unlike other sections of the RLTO, which expressly include materiality language, this
sub-section contains no qualifying language and is aimed at disclosure of all violations without
regard for the degree to which they affect habitability. There is no de minimus exception.
Plambeck v. Greystone Management, 281 Ill. App. 3d 260, 271; 666 N.E2d 670, 676 (1st Dist.
1996).

§ 05-12-110, Tenant Remedies

Any Matter “Arising Under” the RLTO is “Germane”

Any matter “arising under” the RLTO is germane, and thus may be introduced by joinder,
counterclaim, affirmative defense, or otherwise. American National Bank v. Powell, 293 Ill.
App. 3d 1033, 1044-5; 691 N.E.2d 1162, 1169-70 (1st Dist. 1997).

Time To Cure Under Sub-Section (a)

Terminating the lease is a distinct act from vacating the premises. Just because a tenant
vacates the premises, it does not mean that tenant failed to give full 14 days to cure. Plambeck v.
Greystone Management, 281 Ill. App. 3d 260, 271; 666 N.E2d 670, 675 (1st Dist. 1996).

The Tenant Remedies Provided in Subsections (a) and (g) are Not Cumulative

Where there are two statutory provisions, one of which is general and designed to apply
generally, and the other is specific and relates to only one subject, the specific provision must
prevail and must be treated as exception to the general provision. By making separate provision
for material noncompliance that results from a fire or other casualty, the City Council apparently
meant to distinguish such instances from other sources of material noncompliance. If the City
Council meant to provide subsection (g) as an additional mode of recourse to subsection (a) for
those struck by fire, the Council could have expressly stated so. Farnham v. Windle, 918 F.2d
47, 49-50 (7th Cir. 1990). [Note: This case actually discussed the pre-amendment RLTO. I
have included it because the sections it discusses are for these purposes identical to the current
RLTO sub-sections on the topic. My research did not uncover any cases examining these
provisions post-amendment.]

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When Does a Tenant Withhold or Deduct Rent Under Sub-Section (d)? When Can a Tenant
Withhold or Deduct Rent Under Sub-Section (d)?

A tenant withholds or deducts rent under the RLTO when the landlord receives partial
payment, not when the tenant mails, posts, or sends partial payment. But a tenant cannot deduct
rent under the RLTO until the landlord has received written notice of the tenant’s intent to deduct
rent, and has had a full 14 day opportunity during which to make requested repairs. American
National Bank v. Powell, 293 Ill. App. 3d 1033, 1038-40; 691 N.E.2d 1162, 1165-6 (1st Dist.
1997).

Singular award proper for multiple violations of the same RLTO provision

Trial court did not err when it merged damages for breach of contract with multiple
violations of Section 5-12-080 of the RLTO. However, tenant was entitled to separate damage
award for violation of Section 5-12-100. Krawczyk v. Livaditis, 366 Ill. App. 3d 375; 851
N.E.2d 862 (1st Dist. 2006)

There is No Private Right of Action for Lead-Based Poisoning Injuries Under Sub-Section (e)

A cause of action should not be implied under the City Code because it is not necessary to
provide an adequate remedy for violations of the Code. A plaintiff’s remedy lies in common law
negligence. Abbasi v. Paraskevoulakos, 187 Ill. 2d 386, 396-7; 718 N.E.2d 181, 187 (1999). As
the dissent correctly points out, however, the RLTO provides an express private right of action
for material noncompliance with municipal ordinances prohibiting the use of lead-bearing
substances in dwelling units, and therefore it does not matter that an available remedy also exists
in negligence. Id. 187 Ill. 2d at 403, 718 N.E.2d at 190.

The Statute of Limitations for 110(e) Cause of Action is 5 years.

The Statute of Limitations for an action under 5-12-110(e) is 5 years, as allowed by 735
ILCS 5/13-205 (recovery of personal property or damages for the conversion thereof), as these
damages are not statutory penalties because they do not specify an amount to be awarded for any
violations or impose a formula for calculating an award without regard to the actual damages.
Sternic v. Hunter Properties, Inc., 344 Ill.App.3d 915, 918-19; 801 N.E.2d 974, 976 (1st Dist.
2003).

5 years statute of limitations for violation of sub-section (e) (Damages and Injunctive Relief)

See Sternic v. Hunter Properties, Inc., 344 Ill.App.3d 915; 801 N.E.2d 974 (1st Dist.2003).

6
§ 05-12-140, Rental Agreement

An Attorneys’ Fees Clause is Permissible To The Extent It Does Not Conflict With the RLTO

A fees clause that provides for a tenant to pay landlord’s attorneys’ fees “to the extent
permissible by courts, statutes, or ordinances” is compatible with this section of the RLTO.
Plambeck v. Greystone Management, 281 Ill. App. 3d 260, 267; 666 N.E2d 670, 674 (1st Dist.
1996).

No Liability Limitation Clauses Allowed Under the RLTO

The RLTO prohibits “the limitation of any liability.” The command to delete any and all
exculpatory clauses is complete and unambiguous, and it does not allow for any qualification. A
lease may not even contain a conditional liability limitation clause containing language
analogous to, “to the extent permissible by courts, statutes, or ordinances.” Plambeck v.
Greystone Management, 281 Ill. App. 3d 260, 268; 666 N.E2d 670, 674 (1st Dist. 1996).

No Waiver of Notice Allowed Under the RLTO

The RLTO prohibits lease clauses requiring tenants agreement “to waive any written
termination of tenancy notice or manner of service.” The command to delete waiver of notice
clauses is clear and absolute. Such clauses will not be saved for language analogous to “subject
to the provision of the Chicago Landlord and Tenant Ordinance.” Plambeck v. Greystone
Management, 281 Ill. App. 3d 260, 269; 666 N.E2d 670, 675 (1st Dist. 1996).

Upheld Sub-Section (g)

See Plambeck v. Greystone Management, 281 Ill. App. 3d 260, 269; 666 N.E2d 670, 675
(1st Dist. 1996).

§ 05-12-150, Prohibition On Retaliatory Conduct By Landlord

Retaliatory Conduct is “Germane” and May Be Introduced as an Affirmative Defense to a

Forcible Entry and Detainer Action

See American National Bank v. Powell, 293 Ill. App. 3d 1033, 1044-5; 691 N.E.2d 1162,
1169-70 (1st Dist. 1997), and supra under § 05-12-110.

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Statute of limitations for 150 Cause of Actions is 5 years.

The Statute of Limitations for an action under 5-12-150 is 5 years, as allowed by 735
ILCS 5/13-205 (recovery of personal property or damages for the conversion thereof), as these
damages are not statutory penalties because they do not specify an amount to be awarded for any
violations or impose a formula for calculating an award without regard to the actual damages.
“Even the two-months’ rent liability under 5-12-150 is related to the actual damages because it
can be imposed only if it is greater than twice the actual damages.” Sternic v. Hunter Properties,
Inc., 344 Ill.App.3d 915, 918-19; 801 N.E.2d 974 (1st Dist. 2003).

§ 05-12-170, Summary of Ordinance Attached to Rental Agreement

Tenant’s Motive is Irrelevant

A tenant’s motive for invoking the right of termination provided under this section is
simply not relevant to the determination whether the termination is valid. There is no “clean
hands” doctrine overlaid on the text of this section, and imposing one would counter-act the
inherent purpose of the RLTO to correct the historical disparity between bargaining powers of
landlord and tenant. Plambeck v. Greystone Management, 281 Ill. App. 3d 260, 266-7; 666
N.E2d 670, 673-4 (1st Dist. 1996).

§ 05-12-180, Attorney’s Fees

A Party is Entitled to an Appropriate Hearing on Attorneys’ Fees

This section provides for reasonable attorneys’ fees to the prevailing plaintiff. That
plaintiff is entitled to an appropriate hearing to determine reasonable attorneys’ fees. Plambeck
v. Greystone Management, 281 Ill. App. 3d 260, 273; 666 N.E2d 670, 677 (1st Dist. 1996).

Burden of the Party Pleading for Attorneys’ Fees

It is incumbent upon the petition for fees to specify the services performed, by whom they
were performed, the time expended and an hourly rate charged therefore. Petitioner must present
records maintained during the litigation containing facts and computations upon which the
charges are predicated. Plambeck v. Greystone Management, 281 Ill. App. 3d 260, 273-4; 666
N.E2d 670, 677-8 (1st Dist. 1996).

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Factors for Court to Consider in Awarding Attorney’s Fees

In assessing the reasonableness of attorneys’ fees, the trial court should consider a variety
of factors, including the skill and standing of the attorney employed, the nature of the case, the
novelty and difficulty of the issues involved, the degree of responsibility required, the usual and
customary charge for the same of similar services in the community, and whether there is a
reasonable connection between the fees charged and the litigation. The trial court is permitted to
use its own knowledge and experience to assess the time required to complete particular
activities, and a reviewing court may not reverse an award of attorneys’ fees merely because it
may have reached a different conclusion. Plambeck v. Greystone Management, 281 Ill. App. 3d
260, 273; 666 N.E2d 670, 677-8 (1st Dist. 1996).

A Court May Not Discount an Award of Attorney’s Fees To a Party Represented by Not-For-
Profit Legal Service Providers

Discounting the legal fees awarded to legal aid attorneys would serve only to chill the
impulse of attorneys to pursue and continue careers in legal service work, because the receipt of
such fees promotes the health and continued existence of their employing organizations. Pitts v.
Holt, 304 Ill. App. 3d 871, 874; 710 N.E.2d 155, 157 (1st Dist. 1999).

Policy Behind Provision

See Pitts v. Holt, 304 Ill. App. 3d 871; 710 N.E.2d 155 (1st Dist. 1999).

RLTO Generally

The RLTO Does Not Violate the United States Constitution

See Chicago Bd. Of Realtors, Inc. v. Chicago, 819 F.2d 732 (7th Cir. 1987). Analyzes
RLTO with respect to the Contract Clause, Procedural Due Process, Substantive Due Process,
Equal Protection, Void-For-Vagueness Doctrine, and Pre-Emption.

The RLTO Supercedes § 9-207 of the Illinois Code of Civil Procedure

The Illinois Supreme Court has repeatedly held that an ordinance that is within a
municipality’s home-rule powers supercedes, within the home-rule unit’s territory, a conflicting
statute passed before the 1970 Illinois Constitution took effect on July 1, 1971. Because § 9-207
of the Illinois Code of Civil Procedure, 735 ILCS 5/9-207 (West 1996) was passed prior to July
1, 1971; the municipality of Chicago is a home-rule unit; and the ordinance addresses the well
being of its citizens, we conclude that the ordinance supercedes the statute in this instance. Reed
v. Burns, 238 Ill. App. 3d 148, 152-4; 606 N.E.2d 152, 154-5 (1st Dist. 1992).