Illinois security deposit laws for landlords, with a section on Chicago's RLTO
Illinois has no legal limit on a security deposit. For buildings or complexes of five or more units, the Security Deposit Return Act (765 ILCS 710) requires the deposit back in full within 45 days of move-out, or an itemized statement of damages with paid receipts within 30 days. A violation can cost twice the deposit plus court costs and attorney fees. Interest is owed on larger properties under the Security Deposit Interest Act (765 ILCS 715), and Chicago has its own, stricter rules in Municipal Code 5-12-080.
Is there a cap on an Illinois deposit?
No. The Illinois Attorney General's landlord and tenant guide says the amount is normally one month's rent but that there is no legal limit on what a landlord can require. A landlord may use a deposit for unpaid rent, repair of damage to the unit and cleaning after the tenant moves out. Some cities and counties set their own caps: the Illinois Legal Aid lawyer manual lists a one and a half month cap in Evanston and in Cook County's ordinance, for example, so check your municipality.
What do the 30 and 45 day rules require?
For a building or complex of five or more units, the Attorney General's guide says the Return Act requires you to return the deposit in full within 45 days of the date the tenant moved if the tenant owes no back rent, has not damaged the unit and cleaned it before leaving. If you want to keep any part, you must give the tenant an itemized statement of the damages along with paid receipts within 30 days of the move-out date. A tenant who moves should give written notice, usually 30 days unless the lease requires more, to protect the deposit.
In plain terms, the statement is the gate. Without a timely itemized statement and receipts, the deposit goes back in full by day 45. With one, you still return whatever is left after the documented charges.
Example a made-up tenant leaves a 12 unit building on March 1 with a $1,400 deposit. By March 31 the landlord mails an itemized statement for $260 to replace a broken door closer and $140 of paid carpet cleaning receipts, $400 in all, and the $1,000 balance goes with it, well before the April 15 outside date. Had the statement been missing, the full $1,400 would be due by April 15.
Do I owe interest on an Illinois deposit?
The Attorney General's guide says state law requires interest if the deposit is held at least six months and there are at least 25 units in the building or complex. The landlord pays the interest, or credits it against rent, every 12 months, and a tenant can sue for willful failure to pay, recovering an amount equal to the deposit plus court costs and attorney fees. The Act is 765 ILCS 715. Smaller landlords owe no state-law interest.
What does a mistake cost under state law?
If a court finds you violated the Return Act, the Attorney General's guide says you could be liable for twice the amount of the security deposit, plus court costs and attorney fees. Because the doubling applies to the whole deposit rather than the amount in dispute, a small error on a large deposit is expensive.
What does Chicago's RLTO add?
The Chicago Residential Landlord and Tenant Ordinance (Municipal Code of Chicago 5-12-080) applies to most rentals in the city, whatever their size. The Illinois Legal Aid lawyer manual summarizes it: the deposit cannot be mixed with the owner's money, with no small-amount exception; within 30 days after each 12 month period the owner pays interest or deducts it from rent; the deposit comes back within 45 days after the tenant vacates; and if repairs will be charged, an itemized statement of the damages and the actual or estimated repair cost goes to the tenant within 30 days.
The penalty is the sharp part. An owner who violates the deposit rules is liable for twice the deposit plus attorney fees, and the violation need not be willful. A tenant gets a single award however many deposit rules were broken. The interest rate is announced each year by the City Comptroller and has been very low; the manual puts it at 0.01 percent.
Example a made-up Chicago landlord holds a $1,500 deposit and pays interest at a made-up 0.01 percent a year, which is $0.15 for the year. If the interest is never paid or credited and a court finds a violation, the tenant can be awarded twice the $1,500 deposit, $3,000, plus fees, for a $0.15 mistake.
The Chicago details above come from the Illinois Legal Aid manual, a summary of the ordinance. Read the current Chicago ordinance, and the Comptroller's yearly rate notice, before sending tenants a statement.
How DoorKeeping handles it
In DoorKeeping each property has its own books and bank account, and each tenant's deposit is its own line there. That helps with the Chicago no-commingling rule and with yearly interest figures. Leases are e-signed and kept with the property's documents, and the paid receipts for a 30 day statement can sit beside them. Deposits stay in your own bank account: DoorKeeping never holds your money and sends a payment only when you approve it. It gives no legal advice.
Sources
Questions
- Is there a limit on the security deposit in Illinois?
- Not under state law, according to the Illinois Attorney General. Some municipalities set their own caps, so check your city or county.
- How long does an Illinois landlord have to return a security deposit?
- 45 days from move-out for buildings of five or more units, or an itemized statement with paid receipts within 30 days if any part is withheld.
- Does an Illinois landlord owe interest on a deposit?
- State law requires it when the property has at least 25 units and the deposit is held at least six months. Chicago requires it under the RLTO regardless of size.
- What is the Chicago RLTO penalty for deposit violations?
- Twice the deposit plus attorney fees, and the violation does not have to be willful.