4 topics every tenant and landlord should understand about their contracts
As a landlord or a tenant, we often overlook the section of the lease listing all of our rights and responsibilities until we need it most. It’s important to know your rights as a renter or as a landlord before getting into a lease agreement. You don’t want to sign a contract that has you locked into an arrangement that you don’t fully support, especially if it’s for an entire year.
Here are the most important pieces of a lease agreement:
1. Security Deposit
The security deposit is set in place for any damage to the property outside of normal wear and tear. Additionally, security deposits provide a financial cushion in case a tenant skips out on the last payment of their lease. Generally, security deposits are the equivalent of one month’s rent, however, there is no limit to the amount a landlord can charge for a security deposit in Illinois. In Illinois, if the landlord rents out at least 25 units and holds the security deposit for over 6 months, they must pay interest on the amount of the security deposit when it is returned, or they can deduct it month-by-month from the monthly rent bill. When a tenant moves out, the landlord must return the security deposit within 30 days. However, the landlord will be given an additional 15 days to repay the security deposit if there are pending damages. If the landlord fails to repay, the tenant can take the landlord to small claims court for the return of their deposit up to $10,000.
Illinois does not have rent control, meaning landlords can charge what they deem a reasonable rate for the rental of their unit. The tenant must pay rent on time and pay for utilities if stated in the lease. Depending on the nature of the contract, rent may be raised in different ways. A week-by-week or month-to-month rental agreement requires 7 and 30 days notice, respectively. Rent cannot be increased until the lease expires however, it is advised that landlords provide adequate notice of rental increases in the event that a tenant considers staying another year.
In order for a landlord to terminate a lease, they must provide 30 days written notice for a month-to-month agreement and 60 days notice for an annual or longer written lease. A landlord does not need a reason to terminate the lease. The same rule applies to tenants with the 30-day written notice if they plan to move out of the property, unless the lease specifies a longer notification period. Penalties for breaking a lease may apply.
The tenant must comply by the terms in the contract, keep the residence in good condition and avoid damages. If these items are neglected or abused, the landlord has the right to evict their tenants. In contrast to a lease termination, the landlord must provide written notice stating the reason for an eviction. The notice must be presented 10-days in advance if the eviction is for violating rules and regulations within the lease. If the eviction is for a missed payment, the landlord must allow 5 days for the tenant to make the payment in order to stay. The landlord cannot make the tenant move by turning off the utilities, moving the tenant’s personal property, or locking the tenant out.
It is critical for a tenant to request a signed lease or agreement in any rental situation. It is equally as important for a landlord to do their due diligence in providing a contract and understanding the terms of their own lease. Knowing your rights will keep you protected as you enter into an agreement for one of the largest month-to-month expenses you will make. For more information or assistance in your next rental agreement, contact Anselmo Lindberg & Associates.