Illinois Security Deposit Laws for Landlords

Illinois sets no statewide cap on security deposits, but every residential landlord must follow the Security Deposit Return Act. To keep any money for damage, you must give the tenant an itemized statement of the damage with costs and paid receipts within 30 days after they move out, or else return the full deposit within 45 days. A court can order a landlord who refuses to send the statement, or sends one in bad faith, and does not return the deposit on time, to pay twice the deposit plus court costs and attorney's fees. Buildings with 25 or more units owe interest under state law, and Chicago and suburban Cook County add their own receipt, account, and deadline rules.

Which rules apply to your rental?

Until 2024 the Return Act covered only buildings with 5 or more units. Public Act 103-0224 struck that limit effective January 1, 2024, so a landlord renting a single condo now follows the same 30-day and 45-day rules as a large complex. Local rules then depend on where the unit is.

The Cook County ordinance exempts units in owner-occupied buildings of 6 or fewer units, and a single-family home or condo when it is the owner's only rental and the owner or an immediate family member lived there within the past 12 months. If your unit is exempt, you must tell the applicant so before accepting any fees. Evanston and Oak Park have their own ordinances, each capping deposits at 1.5 months' rent; Evanston requires the remaining deposit and an itemized statement of any deductions within 21 days after move-out. Oak Park requires the remaining deposit and an itemized statement of any damage deductions within 30 days after move-out.

How do you send the 30-day itemized statement?

The deadline runs from the later of the day the tenant moved out or the day their right of possession ended.

1. List each item of damage with its estimated or actual repair or replacement cost. Deductions must be for damage beyond normal wear and tear, at a reasonable cost to restore the unit to its condition when the lease began.
2. Attach paid receipts or copies. If you did the work yourself, you may charge the reasonable cost of your labor.
3. If you used estimates, send the paid receipts within 30 days after the statement.
4. Cite lease-set charges correctly. If your written lease specifies a cost for cleaning, repairing, or replacing a component, you may withhold that amount, but the statement must reference the lease amount and include a copy of that part of the lease.
5. Deliver it in person, by postmarked mail to the tenant's last known address, or by email to a verified email address the tenant gave you.

If you cannot get receipts through no fault of your own, send an itemized cost list, any other evidence of the cost, and a verified statement explaining why receipts are unavailable. If the tenant gives you no mailing or email address, you are not liable for damages or penalties caused by that gap.

Photos and a signed condition checklist from move-in make each line easier to defend; see whether a move-in inspection is required. If damage exceeds the deposit, you can sue for the balance, and small claims court handles property damage claims of up to $10,000. Our guides on what to do when a tenant damages your property and representing yourself in small claims court cover that step.

A deposit can also cover rent still unpaid at move-out. While the tenant still lives in the unit, holding a deposit does not stop you from serving a notice for unpaid rent and following the Illinois eviction process.

When does state law require interest?

The Security Deposit Interest Act applies only if the property has 25 or more units in a single building or in a complex on adjoining parcels, and only to deposits you hold for more than 6 months. It does not apply to public housing.

• Rate: the rate the largest commercial bank (by total assets) with its main office in Illinois paid on minimum-deposit passbook savings accounts on December 31 of the year before the lease began.
• Timing: within 30 days after the end of each 12-month rental period, pay any interest of $5 or more in cash or as a credit against rent, unless the tenant is in default under the lease. At the end of the tenancy, pay all unpaid interest, whatever the amount.
• Penalty: a landlord who willfully fails or refuses to pay owes an amount equal to the security deposit, plus court costs and attorney's fees.

What does Chicago's ordinance add?

The RLTO's deposit rules are stricter than state law and apply regardless of building size, except for the owner-occupied exemption above.

• Receipt. Give a receipt showing the owner's name, the date received, and a description of the unit, signed by the person who accepts the deposit.
• Holding the money. Hold deposits in a federally insured, interest-bearing account at an Illinois financial institution, separate from your own funds. The Illinois Legal Aid housing manual notes that courts have found no exception for small amounts. Clearly disclose the institution's name and address in the lease signed by the tenant. If there is no written lease, give the tenant that information in writing within 14 days after receiving the deposit.
• Interest. Pay interest each year on deposits and prepaid rent held more than 6 months, within 30 days after each 12-month period, in cash or as a rent credit. The City Comptroller sets the rate each year; for 2026 it is 0.01%, the same rate in effect since 2015.
• Move-out. Send an itemized statement of damages within 30 days after the tenant vacates before deducting for damage, and return the deposit and any interest, minus unpaid rent and damage, within 45 days.
• Lease summary. Attach the city's RLTO summary to every written lease and renewal.

Violating the RLTO's deposit rules can cost two times the deposit plus interest and attorney's fees, and the tenant does not have to prove you acted willfully. If you paid interest by the applicable deadline but paid too little, the tenant must first send written notice; you then have 14 days after receiving it to pay the correct interest plus $50 or explain your calculation in writing. This procedure does not apply to unpaid or late interest. The tenant can challenge your calculation in court, which must award twice the deposit plus interest if the calculation is incorrect.

What does suburban Cook County add?

• Cap: no more than 1.5 times the monthly rent, and you cannot get around the cap by calling a charge something other than a deposit. The tenant may choose to pay the portion above one month's rent in up to six equal installments, due no later than six months after the lease's effective date.
• Receipt: owner's name, date received, and unit description, signed by the person accepting it. An electronic receipt is allowed when the tenant pays electronically.
• Account: a federally insured account at an Illinois financial institution, separate from your other accounts. Tell the tenant in writing which institution holds the deposit, and tell them again if you move it.
• Refund: return the deposit within 30 days after move-out, with a detailed explanation of repair costs if you keep any. You may deduct unpaid rent, court costs awarded in a court case (not attorney's fees), and reasonable repair costs beyond ordinary wear and tear.
• Penalty: charging too much, not returning the deposit, or not documenting repair deductions entitles the tenant to two times the deposit plus attorney's fees. For paperwork errors, the tenant must give you notice and 2 business days to fix them before suing. Without a proper receipt, the tenant is entitled to the deposit back immediately.

If you sell, you stay responsible until you transfer the deposit to the buyer and notify the tenant in writing. For account options and record-keeping, see how to store security deposits.