Illinois security deposit laws are detailed under the Illinois Security Deposit Return Act and the Illinois Rent Concession Act. These laws provide clear guidelines on how landlords must handle security deposits, ensuring both landlords and tenants are aware of their rights and responsibilities under Illinois law. Please note that rules and regulations may vary by municipality. Chicago, in particular, is known to have especially strict guidelines (see this helpful resource).
Illinois does not impose a statutory limit on the amount a landlord can charge for a security deposit. However, in practice, it is commonly equivalent to one or two months' rent, depending on the rental market.
25 or more units: Landlords of residential properties with 25 or more units are required to hold security deposits in a separate, federally insured, interest-bearing account.
Under 25 units: For landlords with fewer than 25 units, there is no specific legal requirement for holding deposits in a separate account, though it is recommended for transparency.
If a landlord is required to hold the security deposit in a separate account (as with properties with 25 or more units), they must notify the tenant in writing of the bank’s name and address where the deposit is held.
Landlords must also inform tenants about the interest rate on their security deposit, if applicable.
For properties with 25 or more units, landlords are required to pay interest on security deposits that are held for more than six months. The interest rate is set by municipality (e.g., Chicago sets its own interest rate).
Interest must be paid annually, either directly to the tenant or credited towards rent.
No Deductions: If no deductions are made from the security deposit, the landlord must return the full deposit within 30 days of the tenant moving out.
Return with Deductions: If deductions are made, the landlord must provide an itemized statement of damages along with any remaining portion of the deposit within 45 days of the tenant moving out.
If a landlord makes deductions from the security deposit, they must provide the tenant with an itemized list of damages and the cost of repairs within 30 days of the tenant vacating the property. If there are no deductions, the landlord must return the full deposit within 30 days.
Dispute Resolution: If the tenant disagrees with the deductions, they can request an explanation or dispute the charges, potentially leading to small claims court.
Illinois landlords may legally withhold deductions from the security deposit for the following reasons:
Claims Process Non-Compliance: If a landlord fails to return the deposit or provide an itemized statement within the required timeframe, they may be liable to pay the tenant twice the amount of the security deposit, plus court costs and attorney fees.
Rent Concessions: Under the Illinois Rent Concession Act, any rent concessions given by the landlord must be disclosed in writing and can impact the handling of the security deposit.
DISCLAIMER: Security deposit laws may vary by county or municipality. The information provided by Build Whale, Inc. is for general informational purposes only and should not be construed as legal advice. It is not a substitute for consultation with a qualified attorney. While we strive to provide accurate and up-to-date information, Build Whale, Inc. makes no guarantees or warranties regarding the accuracy, completeness, or reliability of the information presented.