Hi everyone, Jason Marcordes here with Landmark Property Management. Today, we’re discussing the question, “What Can I Charge to My Tenant’s Security Deposit?” Before we talk about what we can and can’t charge to a tenant’s security deposit, let’s start with some security deposit basics.
- Illinois has something called the “Security Deposit Return Act.” In addition to this video, I HIGHLY suggest googling the Security Deposit Return Act and reading through it. Security deposits in Illinois are highly regulated so you want to make sure you’re following the Security Deposit Return Act to the T.
- To summarize the act, it says that if you are returning the security deposit in full, you are required to do so within 45 days of move out.
- If you are going to charge repairs to the security deposit, you must give the tenant a breakdown of those charges, and show receipts, within 30 days of move out. If you don’t have receipts and are basing the charges off of estimates, you are required to send the actual receipts 30 days from the original estimates you sent them.
- If the security deposit isn’t handled properly, the landlord is liable for twice the security deposit amount in damages, plus the original security deposit itself.
- Again, there are quite a few nuances here so I HIGHLY recommend reading through the Security Deposit Return Act for yourself. It also includes things like how to properly transfer the security deposit or how to handle the security deposit in the event the property is sold.
Now, getting back to what you can and can’t charge to your tenant’s security deposit. This is going to come down to what is considered wear and tear versus what is considered actual tenant damage. This is the million dollar question and to be honest, this can be quite the gray area. Decisions like this, decisions that require discretion, are the hardest part of managing rental properties. Only a handful of states actually outline what is wear and tear versus tenant damage and Illinois is not one of them. When we are trying to determine whether we can charge back a repair to the tenant’s security deposit, we typically ask ourselves two things:
- Was the damage a result of ordinary use in which it was intended for? For example, was the carpet worn out from years of walking on it? If so, that repair would be due to ordinary wear and tear. Now if the carpet was newer and all of sudden there’s a huge stain on it from something like red wine, that would fall outside the realm of normal wear and tear.
- The second question is: was the damage caused by negligence or carelessness of the tenant. Again with the carpet example, I would make the argument that spilling something on the carpet and staining it is negligence and should be considered tenant damage.
Sometimes this can be more of an art than a science so let’s go over a few more examples.
- Nail holes in the drywall would be considered normal wear and tear while large holes, like someone punched the wall would be tenant damage.
- Dirty or worn tile flooring would normal wear and tear while cracked and chipped tile flooring may be tenant damage.
- Chipping or faded paint would be normal wear and tear while unapproved paint jobs and things like writing on the wall or stickers would be tenant damage.
The debate between landlords and tenants about what should or should not be charged has been ongoing for as long as rental property has been around. As you can imagine, there are an endless number of things that could be looked at but I hope these couple examples paint the picture of how to look at and determine whether something is just ordinary wear and tear or it is actually tenant caused damage.
If you have questions about any of this or if we can help in any way, consider us at Landmark Property Management a resource, we’re happy to help. Feel free to check out our website at ChicagosPropertyManagement.com or give us a call.
Security Deposit Return Act of Illinois: https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2202&ChapterID=62