Landlord overpaid return on security deposit

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thiggsdog

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This issue is in Illinois/USA (McDonough County)

This issue with my landlord, a large apartment corporation, began at the end of May, when we called to pay our last month's rent, which was only the first half of June. The manager told us we did not owe and had a credit on our account, so we assumed we had paid twice for some prior month (Which would be about a $400 credit to our account).

About three weeks ago we received a check in the mail for our security deposit, in the amount of $1,100, which we assumed was our $400 deposit, $300 pet deposit (Actually a $600 deposit, but only 1/2 refundable), and the $400 overpayment for the last month's rent. So, we cashed that check and used it to pay off student loans.

Today, we got a call from the assets manager saying they made an accounting error and applied the new tenant's deposit and 1st month of rent to our account. I feel morally obliged to pay for the last month's rent of about $450, but they say we owe almost $900.

We don't have $900 to pay out of pocket right now, nor do we think we owe them $900. Isn't a check a legal contract that says they agreed to pay us the $1,100? Should I expect some form of equitable payoff because of the inconvenience re-paying them will be, as it started with their accounting error? Should I allow this to go to small claims court?
 
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