Expert: Jim Avancena, CPM - 8/30/2010

Question
I have a small business in Illinois and am in the final week of a 5 year lease.  The landlord dropped me a letter yesterday saying that I now owe a sum about equal to 5 months rent. The assessment is for 3 years worth of past rent increases and additional CAM assessments.  This is our first notice.  Do we have protection under Illinois Law?  FYI, we are not afraid of eviction since we are movign out in 5 days.

Answer
Christine:

Perhaps you are not concerned about being evicted with only five (5) days remaining prior to moving out of your premises, however, I am concerned with other related matters.   Is your landlord holding a security deposit that you paid when you initially signed your lease?  If yes, how much is it -  including any interest that has accrued over the lease term?   (Note that in some jurisdictions a landlord is required by law to pay a specified interest rate over the term even if the lease document itself does not specify that requirement.  Contact your local court to discover if interest must be paid on your deposit.)  

Did you execute/sign any personal guarantees at the time you acquired your lease that allows the landlord to pursue you or any other lease Guarantor (your husband, your business, etc.) for any funds that the landlord says you owe? Your landlord may be planning to withhold a return of your deposit and or seek the outstanding funds from lease guarantors, or both, until these very late, irresponsible and questionably timed charges are paid in full.

One more immediate concern.  Because it it not a legally acceptable procedure in any jurisdiction where I have a depth of similar experience, I am not aware of how something known as "Self-Help" could impact your final days in the State of Illinois.  It may not be legal in the State of Illinois.  If not, forget that I mentioned it.   I suggest that you check with a local real estate attorney, Bar Association, or attorney friend or relative that is familiar with the local courts immediately (today) regarding any possibility that the charges you were given yesterday by the landlord could act as a basis for the landlord utilizing "Self-Help" to impact your last few days of occupancy and your move out.   I believe "Self-Help" is a remote matter of concern, however, it is a risk that you should rule out immediately by contacting someone familiar with Illinois law.             

Regardless of the integrity of these eleventh hour charges, have no doubts about this is shabby property management practice, the kind of action that immediately fails a stink test, and that no professional management firm would be part of.  

You should respond to the landlord's letter with CERTIFIED MAIL correspondence (send a certified copy of your letter to both the address indicated in the lease as the appropriate address for  "NOTICE"  and to the person at the return address on the recent letter)  asking the landlord to clarify any of the component past rent increases and CAM assessments in detail; providing fully understandable explanations for each and all necessary back-up data, including copies of germane paperwork/invoices/documents for your review.

I do not know the provisions of the Illinois Landlord / Tenant Law, however you should contact the local courts in your area and request a current copy of the law.   In addition to the matter regarding interest on a deposit, ask if the Illinois law allows a landlord: a.) To present charges to a tenant in arrears for expenses more than one (1) year past the time such charges were defined by the lease to be presented in each lease year, and/or, b.) At what point, a landlord is estopped from presenting or recovering for lease charges that accrue to a period exceeding the limits of responsible industry practice.

Request that your landlord detail in writing why it did not send you individual component invoices for each of the component charges at the time the landlord discovered it's oversight for each of the charges during the lease term.  If your dispute goes to court, this aspect of the landlord's response will be of great interest to the judge.  You may find that the landlord does not choose to respond to this question in writing.

I would be highly suspect of the appropriateness of the various charges your landlord contends that you owe.   It might be prudent to find an attorney that is competent in Landlord/Tenant legal disputes to have as an advisor in this matter.

Finally, check your soon to expire lease document to discover if you waived your right to a jury trial in the lease regarding any disputes involving your lease.   Additionally, you need to determine what your lease specifies each side pays in legal fees depending upon your success or failure in a court case.   If your landlord files a landlord/tenant action to collect these charges, your attorney will advise you of your best options in your state.  

Although not likely, it may be that the owner of the property discovered that the property manager had overlooked billing you for the subject charges and warned the manager that it had to make good on its billing mistakes if it didn't collect the funds from you - hence the last minute assessment.    Whatever the reason for this poor business etiquette, you may end up having to pay for some or all of the charges (review each carefully) and endure the abuse someone else has created.

Good luck in your actions to get the property manager's garbage fumigated.  Let me know if I can assist you further in this regard.

- Jim