What recent court ruling favored Chicago landlords?

A Rare Win for Landlords.

The Appellate Court of Illinois (First District) recently issued a ruling which addressed an issue that has long been of major concern to many attorneys representing landlords. And fortunately, the ruling affirmed a lower court ruling in favor of landlords.

The issue at stake was whether or not a tenant could raise the failure of a landlord to issue a particular disclosure, even when the subject of that disclosure was not applicable to their lease.

More specifically, under the Chicago Residential Landlord and Tenant Ordinance (CRLTO), the City of Chicago is required to prepare and publish a summary of the rights and obligations of landlords and tenants, with respect to the CRTLO generally, as well as a summary of the annual interest rate to be paid on security deposits. The CRLTO also mandates that landlords attach a copy of those summaries to their leases or suffer severe financial penalties. Nowhere in the CRLTO is it made clear whether that portion of the mandate requiring inclusion of the security deposit summary applied, even when the tenant wasn’t required to post a security deposit. Out of an abundance of caution, we have consistently counseled our clients to include that summary, while simultaneously recommending that they not collect security deposits.

In the case at hand, Hundley v. WPD Management, LLC, the tenant sued the landlord for failure to attach the summary, filing the matter as a class action complaint on behalf of himself and others in the same situation. The appellate court affirmed the district court’s ruling that, since the tenant could suffer no injury as a result of such failure because no security deposit was being collected from them, the tenant had no standing to raise such claim. The court upheld the lower court ruling and said that to allow otherwise would be to allow “a regulation designed as a shield to be used as a sword.”

At Erwin Law, we’ve been helping landlords make sense of, and abide by, the CRLTO for over 30 years. If you have questions about this ruling or any other landlord-tenant matters, don’t hesitate to contact our real estate team by emailing info@erwinlawfirm.com or by calling (773) 525-0153.