Illinois Security Deposit Law

Maximum Security Deposit Amount

Maximum amount: Illinois law doesn’t limit security deposit amounts. Most landlords determine an amount by considering the property’s value, local rental rates, and their evaluation of tenant risk.

Pet deposits: Illinois law doesn’t limit the amount landlords can charge for a pet deposit, as long as they specify the amount within the lease agreement. However, under the federal Fair Housing Act, landlords cannot charge pet deposits, fees, or rent for service animals or emotional support animals (ESAs).

Penalties: If an Illinois landlord makes deductions against a security deposit, they must send the tenant an itemized list of the deductions within 30 days. Additionally, the landlord must return the tenant’s security deposit within 45 days of the tenant moving out. Landlords who miss these deadlines risk paying twice the security deposit amount back to the tenant, plus appropriate legal fees (765 ILCS 710/).

Handling Damage Deposits

Security deposit storage: Illinois law doesn’t require landlords to keep a tenant’s security deposit in a separate account or disclose where they placed the funds. That said, in certain jurisdictions like Chicago and Cook County, landlords must store security deposits in separate, interest-bearing accounts and issue written notice to the tenant of the bank’s name and address.

Interest-bearing account: Illinois law doesn’t require landlords to hold security deposits in interest-bearing accounts. With that in mind, landlords of residential properties with 25 or more units must pay interest (at this rate) to tenants on security deposits held for six months or more. Landlords with fewer than 25 units do not have to pay interest to their tenants. Again, certain jurisdictions impose their own laws that differ from state regulations. For example, Chicago landlords must hold security deposits in federally insured, interest-bearing accounts, provide tenants with a receipt with the bank’s name and address, and pay them accrued interest within 30 days after each 12-month rental period (765 ILCS 715/1 and RLTO Section 5-12-080).

Receipt: Illinois state law doesn’t require landlords to provide tenants with security deposit receipt. But, according to local regulations, landlords in Chicago must issue tenants a receipt that includes the owner’s name, the date they received the deposit, and a description of the rental unit (RLTO Section 5-12-080).

Documentation: Illinois landlords should complete condition reports with photos, videos, and written descriptions during move-ins and move-outs. These reports provide a transparent record of the property’s condition before and after tenancies and help identify tenant-caused damage.

Ownership transfer: If a landlord sells their rental property, they must turn the security deposit over to the new owner and notify the tenant in writing of the transfer within 21 days. Landlords are responsible for returning the tenant’s security deposit, including any accrued interest (765 ILCS 710/).

Deductions

When landlords cannot deduct: Illinois landlords can’t withhold any part of a security deposit for normal wear and tear, deterioration from ordinary use, or typical aging.

Common examples include:

• Paint that has faded or peeled during the tenancy
• Carpet worn down from regular foot traffic
• Light discoloration in tile grout
• Small holes from nails or hooks
• Dust in vents or on baseboards

When landlords can deduct: Illinois landlords may deduct from the security deposit for tenant-caused damage beyond normal wear and tear, unpaid rent, or other charges specified within the lease agreement.

Common examples include:

• Unpaid rent or outstanding fees
• Broken appliances that functioned at move-in
• Significant holes or damage in drywall
• Deep scratches or stains on hardwood or carpet
• Excessive cleaning to return the unit to move-in condition

Return Timeline

Timeframe: Illinois landlords must return the tenant’s security deposit within 45 calendar days of move-out, after subtracting any lawful deductions (765 ILCS 710/1).

Deduction tracking: If a landlord deducts any part of a tenant’s security deposit, they must provide an itemized list of deductions (with descriptions of each charge) within 30 calendar days after the tenant moves out (765 ILCS 710/1).

Itemized deduction notification: Landlords must deliver the remaining security deposit and itemized deduction statement to the tenant, either personally, via postmarked mail to the tenant’s last known address, or through email to a tenant-provided email address (765 ILCS 710/1). While Illinois law outlines delivery methods, it doesn’t address the payment methods, meaning landlords may return funds via cash, check, money order, electronic payment, or other agreed-upon methods.

Penalties: If a landlord fails to return the security deposit or provide an itemized list of deductions within 45 calendar days, they lose the right to keep any portion of it and may be liable to pay the tenant up to twice the amount of the security deposit due, along with court costs and tenant attorney’s fees (765 ILCS 710/1).

Handling Disputes

Move-in/move-out checklist: To prevent potential security deposit disputes, landlords should complete a move-in and move-out checklist before and after every tenancy. By accurately recording the property’s condition, landlords can justify valid deductions and reduce the risk of squabbles about damage or cleaning costs.

Tenant challenge: If a tenant challenges the return of their security deposit, the landlord should reply with the itemized deduction statement, completed move-in and move-out checklists, and any relevant photos, videos, or receipts. Clear records often settle disputes before they start.

Legal action: If a tenant takes the dispute to small claims court to recover all or part of their security deposit, the landlord should prepare supporting documents, such as the rental contract, messages with the tenant, condition reports, repair receipts, and the deduction list.