I contacted my renter who did not pay their last months' rent. She wants me to deduct it out of the security deposit. However, this is not what was agreed upon in the lease contract. I reside in the same building where I rent the 1st floor unit. In Chicago, does the lessor forfeit their security deposit because they did not pay their last month's rent. The security deposit is a great amount than the rent. Can I legally withhold the deposit due to no last month rental payment?

How was the contract written? In some its first and last plus deposit? If it is written as deposit only then you may only be entitled to recapture for the loss of a months rent but not the entire deposit if it exceeds the total deposit amount. The deposit fee is supposed to be for damages only.

The lease contract under the Residential Lease A310-10 R310-04 is for the security deposit only. My understanding is that if the rent is not paid then the lessor forfeits their deposit.

I appreciate the clarifications.