The Cost of Revenge: Deductions, Reductions and Lawsuits

Last week I spent one bullet point in a list of ten talking about when a bad apartment situation is severe enough to ask for a rent reduction from your landlord. A couple of sentences is really not enough column space to devote to such an important topic. When things get damaged in your apartment through no fault of your own, it's natural to want someone to pay for the loss, be it your insurance company, your landlord or their insurance company. But no matter how much you might want to take revenge by hitting them in the wallet there are certain hard financial thresholds that must be exceeded before it's worth the effort.

Of course you can always choose to move out of an apartment in the wake of a big disaster, but this doesn't help you to replace lost items or recover any costs you may have incurred repairing your apartment on your own. There are three different ways to recoup your losses from major apartment damage that don't involve moving to a new apartment. We'll be reviewing all three of them today, in order of the amount of conflict they create and the ease of using them to attain your goal.

Option 1: Renters Insurance Claims

In general if your belongings are damaged your first recourse is your own renters insurance policy. Landlords are generally not liable for damage to your stuff, unless the damage results from them clearly showing disregard for your safety. It's often easiest to start with your own insurance if you need help replacing damaged personal items. However, easy does not mean cheap.

Most renters insurance policies have a deductible, which is the amount you must pay out of pocket before the insurance will start to pay out. When I was a renter I had a $500 deductible. Additionally, insurance premiums - the amount you pay per year to maintain your policy - tend to increase every time you file a claim. A CNN report from 2014 stated that the average increase is 9% after the first claim on a policy and 20% after the second.

So if your premiums are $800 per year and you have a $500 deductible you'd have to exceed $572 in damages to make it worth filing a claim. Personally with that sort of deductible I would not file a claim unless I'd lost over $1000 worth of stuff.

Option 2: Asking for a rent reduction

If you have a major problem with your apartment that does not involve loss of or damage to your own belongings, another alternative to consider is asking your landlord for a rent reduction. This is certainly the cheapest route to take, but it can only be used in very specific scenarios and it has the potential to permanently damage your rapport with your landlord if you are too heavy handed or vehement in your demands.

The first thing to consider before asking for a deduction is whether the problem you encountered is eligible for being compensated via rent reduction. One common scenario is when a problem in your apartment actually lowered its value compared to other apartments on the market. If you couldn't use a room for a month that's worth it, likewise if you couldn't use the laundry for a month. In this case you could ask for a deduction for the difference in value.

Another reason you could ask for a deduction would be if you had to pay out of pocket for repairs or stay in a hotel because your apartment was uninhabitable. You would be within your rights to ask for the landlord to reimburse you for your out of pocket expenses.

The second thing and equally important point to consider is how much notice you gave your landlord beforehand and the nature of the problem. In Chicago the landlord has 72 hours to restore missing essential services such as heat and water, but 2 weeks to repair less severe issues. The countdown does not begin until they receive written notice (in the form of a letter, email or text message) telling them of the problem.

So let's look at a few specific situations to see if they're eligible for rent reduction or not.

Problem	Eligible
You had to wake up early every morning for two weeks because your landlord's tuckpointing contractors started jackhammering at 8am.	NO. Did not lower the value of your apartment, nor was the time span long enough.
A pipe burst in your sink and the landlord took a month to repair the damage to your bathroom.	YES. Lowered the value of your apartment for a suitable length of time.
Contractors tripped a breaker in the basement causing your fridge to shut down, spoiling all your food.	NO. Loss of tenants' personal possessions is not a landlord liability.
The landlord's contractors parked in your assigned spot for 2 weeks, leaving you to park on the street and get a parking ticket.	YES For the parking space, NO for the ticket.
After waiting a week for your landlord to fix your heat you went and bought space heaters.	YES for the cost of the heaters and possibly the higher electric bill.

If you feel you are entitled to a rent reduction, do not just pay less than your normal rent without any notice. Make a written request to the landlord well in advance. Asking for a reduction requires a light hand. You don't want to come off like you're about to sue, but you also don't want to make it seem like you're unaware of rights granted to you as a renter by the city and state. Make sure that your written request for a reduction lands in the hands of someone who has the power to make decisions of this nature at your landlord's office. In your letter, state the problem clearly, including dates, times, and copies of any prior written notice you provided to the landlord about the problem. If you have receipts for expenses, include copies of them. State the specific clause of the CRLTO that you feel applies to your situation. Give a specific and reasonable amount that you would like to deduct. Provide them with clear instructions on how and when to follow up with you.

Expect to have a conversation about the matter. When this conversation occurs, approach it as a negotiation, not an argument. If nobody contacts you, follow up by phone to ensure your request has been received.

Landlords and their staff are generally not trained in proper customer service techniques. The idea that renters are "customers" or "clients" is often a new concept to landlords. Most landlords do not get into the business to provide housing. To a landlord a building is a financial investment and also an enormous liability. A landlord who's been in the business for a few years has probably already learned that they're a big target for scammers. They can start behaving like a prey animal, jumping at anyone who might be viewing them as an easy source of a big financial windfall.

A request for a rent reduction puts a landlord in a tough spot. They know that if they refuse to grant the request your only recourse is a lawsuit or moving out. They know that moving out will cost you at least 3 months rent in moving expenses, not counting any lease break fees. If the cause of your request is something affecting an entire building, such as a renovation project, they may receive several requests along with yours. This is why it is crucial to be firm but reasonable when writing your rent reduction request, and only request a reduction that reflects your expenses and lowered value of the apartment, not damage to your personal items.

Option 3: Lawsuits

Disclaimer: I am not a lawyer. Nobody in this company is a lawyer. This is not legal advice. This is my own personal opinion based on what I have observed of the court system and experience in property management. Consult with an attorney that has experience in Chicago landlord-tenant cases before taking any legal action against your landlord.

Lawsuits are an option for recouping losses from major damages, be they financial, physical or emotional. Given the cost in both money and time you'll want to save the "big guns" of a lawsuit for when the landlord has been grossly negligent of your welfare or of the law to the extent where you want to make their offenses a matter of public record. Specific situations that might prompt a lawsuit would include personal injury as a result of the landlord ignoring building code violations, the landlord keeping your entire security deposit for no reason, or a landlord refusing to rent to you because you are a member of a protected class.

Of course if you are the victim of a crime committed by the landlord or their employee such as assault or theft you should certainly treat them like you would any other criminal. Call the police and press charges if you see fit following a consultation with an experienced attorney.

There have been cases of note in recent years where tenants have filed massive lawsuits against landlords for seemingly small infractions, such as a ten cent miscalculation of security deposit interest which resulted in a judgment of nearly $900k in damages after a four year long lawsuit, forcing a major local landlord into bankruptcy. These sort of flagrant abuses of the finer points of the Chicago Residential Landlord-Tenant Ordinance have put the hard-won rights granted to tenants in the ordinance at risk, drawing the attention of politicians and lobbyists who would soften the laws.

It is my opinion that renters need to check their desire for revenge when it comes to suing landlords. This is not the 1970s with strong tenant organizations fresh out of the civil rights movement. This is an era of weak tenant unions and strong multi-national real estate investment conglomerates. After seeing the effect that the massive hospitality lobby had on the emerging cottage industry of home sharing in Chicago it's safe to say that renters should be stepping very lightly when it comes to exploiting the CRLTO.

Another thing to consider is the lawsuit's time and cost to your landlord. Tenants out for revenge may think that forcing their landlord into bankruptcy is a great idea, but this is a dangerous form of tunnel vision that neglects the needs of other renters in the building and the citywide rental market as a whole. By all means run the worst slumlords out of the city on a rail, but if the landlord makes a minor error let the punishment fit the crime.

Beyond the political ramifications of landlord-tenant lawsuits, it also costs some serious coin to bring a case before the courts in Chicago. At the Cook County Courthouse the filing fees for civil cases (including contract disputes and personal injury cases) range from $150 to $368 depending on the amount you're demanding in damages. Filing does not include costs for photocopies ($2 per page plus $2 postage), appearance fees ($207-237), jury fees if you request a jury trial ($12.50 - 25) and alias summons ($6 each). (Fees are current as of May 2017 but may change in the future.)

Attorney fees are variable. Low income renters can take advantage of free legal aid or low cost legal services, but anyone can choose to go with fair market attorney services instead. Some experienced tenant attorneys will offer a flat fee for their work, but others will bill you incrementally at rates exceeding $350/hr.

If you win your case all of these court costs and attorney fees will probably be included in the judgment and your landlord will be responsible for paying the bill. But it's a big gamble to assume that you'll win, especially if your landlord has the cash to hire a powerful legal team.

Even though landlords are forbidden by law from terminating your lease in retaliation for suing them, you will probably still want to find another apartment if the situation is bad enough that you need to take things this far. Civil lawsuits in Cook County are very easy to look up online. It's a known but unspoken truth in the industry that landlords avoid litigious tenants, so in addition to moving costs you may find that your lawsuit has tainted your reputation as a renter making it harder for you to find another place.

The court does account for some of these soft expenses. If you win a case that's based on the CRLTO the standard damages awarded to you will be two times your security deposit plus your court costs. However, with more and more landlords moving away from deposits in favor of non-refundable "move in fees" this formerly firm figure is now subject to the whims of county judges. The maximum civil penalty for a fair housing lawsuit is $19,787 if it's the landlord's first offense in the past 5 years. Damages awarded for personal injury suits are, of course, highly variable.

Those of you doing the math will realize that if you defend yourself in court you might be able to pay less to sue your landlord than you would to use your renters insurance. The courts are there as a recourse for everyone, but do bear in mind the effect that your choices will have on your landlord, neighbors and overall rental market. It's likely with a lawsuit of this nature that the only people coming out ahead in the end will be a bunch of attorneys.

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There are times when you just need to accept that living in a high density building in the big city is a risky choice. The realization that all avenues of recourse consider a $500 loss to be small potatoes is sometimes tough to accept. The most important thing you can do as a renter is not related to revenge at all, but preventive. Always make sure you have enough to cover your deductible tucked away in a savings account somewhere. If you don't have insurance, the amount you've got stowed should be enough to replace all of your valuables instead. Personally I recommend that renters go even further than this and always keep three months of rent saved up in case you need to move in a hurry, but I know that this is beyond the means of many renters, particularly low income renters who are most likely to need such a cushion.

When faced with a big loss it can be tough to keep a cool head. In the long run though, when it comes to responding to such matters it's always important to remember that a desire for revenge can wind up costing you more than you gain.

PS: If you do choose to sue your landlord, please consult with an attorney. Here are some providers of low cost legal assistance in Chicago.