Court Opinion

ID: 9860846
Source: CourtListenerOpinion
Date Created: 2023-09-24 23:34:20.748476+00
Date Added: 2024-06-11T11:26:45.832957
License: Public Domain

JUSTICE RAKOWSKI, dissenting: I do not agree that the statute which requires the lessors of residential real estate to pay interest on security deposits applies only if the lessor happens to be the owner of the property. Neither the cases cited by the majority nor the purpose of the statute supports limiting the protection of the statute to renters only if their leases are signed by the property owner or his agent rather than by a real estate management company. Defendant Brower Realty managed rental units for different owners. The complex where plaintiff rented two units had 72 buildings, each with six units. While several different limited partnerships owned the various buildings, Brower managed 14 of the buildings for a total of 84 units. Brower leased these units and received a commission for doing so. The question then is whether this activity made Brower “a lessor of residential real property, containing 25 or more units.” (Ill. Rev. Stat. 1987, ch. 80, par. 121.) The majority concludes that management companies are not included in the term “lessor.” I reject this narrow view. A broader interpretation which includes management companies is required by legislative history, the one case on point in Illinois and ordinary understanding of the term “lessor.” First, the legislature enacted this law as a form of protection for renters in buildings of 25 units or more without limiting it to situations where the owner or his agent signed the lease. During the Illinois House debates, Representative Merlo, the bill’s sponsor, stated: “[I]t was pointed out to me that the average rent is three hundred, so it would mean that the landlord would be liable or the management firm would be liable for fifteen dollars.” (Emphasis added.) (79th Ill. Gen. Assem., House Proceedings, August 1976, at 13 (statement of Representative Merlo).) The discussion continued about enforcement problems for such a small amount of money. The discussants simply accepted Merlo’s statement that management firms could be lessors and then went on to debate penalty provisions which would make enforcement economically feasible for tenants. Second, the appellate court cited the legislative debate and used this definition in Gittleman v. Create, Inc. (1989), 189 Ill. App. 3d 199, 203-04, 545 N.E.2d 237. In that case, the court ruled for two tenant plaintiffs against the defendant, “an Illinois corporation engaged in the business of managing residential apartment buildings.” The issue on appeal was statutory penalties against landlords and no one argued the application of the statute to a management company. Nonetheless, the court cited the debate and applied the law, penalties included, to the defendant management company. Finally, “[w]here the terms of a statute are not defined by the legislature, courts will assume they were intended to have their ordinary and popularly understood meanings, unless to do so would defeat the perceived legislative purpose.” (People v. Fink (1982), 91 Ill. 2d 237, 240, 437 N.E.2d 623.) Black’s Law Dictionary 812 (5th ed. 1979) defines “lessor” as one who rents property to another. The American Heritage Dictionary 725 (1985) defines “lessor” as “one who lets property under a lease.” Thus, absent any other requirement for statutory construction, the court should define lessor in ordinary language simply as someone who lets property to a renter, regardless of whether this person owns the property or is a company which manages the rental business of the property. Here, the defendant executed a written lease naming itself as the lessor. Since the statute provides protection for renters against lessors, it follows that, absent any other indication, the definition of “lessors” commonly understood by renters should be the one used. The majority expresses concern that large property owners could manipulate their holdings to avoid falling under the statute by retaining numerous management companies. Yet, no consideration is given to the position individuals such as Munroe find themselves in as a result of the majority’s holding. When a renter executes a lease in these situations, he generally deals only with the management company and doubtless does not even know the identity of the building’s owner. While the majority analyzes the role of the management company as an agent, no attention is paid to the ramifications of a management company’s failure to disclose the identity of its principal. Under the majority view a plaintiff such as Munroe, who prevails against the management company to recover his security deposit, but is unsuccessful in recovering his statutorily entitled penalty from the very party which wrongfully withheld his security deposit, is now obligated to determine the identity of the owner, amend the complaint, issue summons and pursue this second party. For these reasons, I believe that the term “lessor” applies to management companies as well as owners. Accordingly, I would affirm.