I recently applied for an apartment in Chicago. It was a sublease. I was denied my application. I gave $150 for an application fee. I also g...

Question

I recently applied for an apartment in Chicago. It was a sublease. I was denied my application. I gave $150 for an application fee. I also gave the current tenant $1350 for a security deposit. The current tenant wants to keep $200 for her brokers fee and $400 for the rent she missed while the application was being processed. I have a signed agreement that she would not deposit my security deposit until such a time that we signed a lease. Can she legally keep this money.

Answer

http://www.cityofchicago.org/city/en/depts/dcd/supp_info/rents_right.html

Answer

While the agreement you signed with the current tenant may contemplate her keeping some part of the security deposit, if it is truly a security deposit then it would be inappropriate for her to do so.

The purpose of the security deposit is to insure the landlord against any damages to the premises. The tenant attempting to sublease the apartment cannot bring superfluous charges against you under the security deposit agreement.

She is also required to keep the security deposit in a separate bank account (segregated from her own finances) and provide you a receipt of the deposit being paid as well as any accounting. Most likely she has failed to take these steps.

As Mr. Repay has linked, the City of Chicago has a hotline to call to get more information. The city may be able to help you. If not, you may decide it makes sense to retain an attorney to send a letter to her.