## Facts

- Student residents of University Plaza (a privately owned dormitory serving university students) signed individual “Residence Hall Contract Agreement[s]” with the dormitory operator and its general partners.
- The agreements provided a package of accommodations and services, including furnishings, telephone service, cleaning, social/recreational facilities, and parking.
- Each resident paid a $50 security deposit subject to contract terms governing its retention and return.
- The operator retained broad control over space and occupancy, including assigning rooms, approving or denying room/roommate changes, and requiring residents to move between rooms.
- The residence hall closed during specified recess periods and at the end of the academic year; residents could not remain during those periods.
- The contract stated the parties did not intend to create a landlord–tenant relationship.
- Residents brought a class action seeking interest on their security deposits under an Illinois statute requiring landlords to pay interest on tenants’ security deposits.

## Issues

1. Whether the residence hall contracts created a landlord–tenant relationship (lease) or a license.
2. If the contracts created only a license, whether the Illinois security-deposit interest statute applicable to “tenants” applied.

## Decision

- The appellate court affirmed dismissal of the complaint for failure to state a cause of action under the statute.
- The court held the contracts created a license for occupancy with services, not a lease conveying a possessory estate.
- Because no landlord–tenant relationship existed, the statute requiring interest on tenants’ security deposits did not apply.

## Legal Principles

- Classification as a lease or license turns on the legal effect of the agreement’s provisions, not the labels used by the parties.
- A lease ordinarily requires transfer of exclusive possession of definite premises; substantial retention of control by the owner weighs against finding a lease.
- An agreement lacking definite bounds of the premises to be occupied, and permitting reassignment or relocation at the owner’s discretion, supports a license classification.
- Housing arrangements bundled with significant services (e.g., meals, cleaning, residence-hall amenities) may be treated as contractual lodging and services rather than a conveyance of an interest in land.
- Statutory protections limited to “tenants” and landlord–tenant relationships do not apply when the occupant holds only a license.

## Conclusion

The court treated the residence hall contracts as licenses because residents lacked exclusive possession of defined premises and the operator retained extensive control within a service-based housing arrangement; therefore, residents were not tenants entitled to statutory interest on their security deposits.


Cook v. University Plaza, 100 Ill. App. 3d 752, 427 N.E.2d 405 (Ill. App. Ct. 1981)