Illinois Security Deposit Laws: Limits, Returns, and Deductions

Illinois handles security deposits differently depending on whether you are governed by general state law or stricter local ordinances. Landlords must understand both layers of regulation to avoid severe financial penalties.

Official Law Citation: The rules and regulations outlined on this page are governed by the Illinois Security Deposit Return Act (765 ILCS 710)Il-preview mhux disponibbli.

Security Deposit Limits

State Level

Illinois state law does not set a limit on the maximum amount a landlord can charge for a security deposit. Most landlords standardly ask for one or two months' rent.

Local Ordinances Several key areas impose strict limits:

• Cook County (Suburbs): Limited to 1.5 times the monthly rent.
• Evanston: Limited to 1.5 times the monthly rent.
• Oak Park: Limited to 1.5 times the monthly rent.

Holding the Deposit (Interest Requirements)

If you own a building with 25 or more units in Illinois, the Security Deposit Interest Act (765 ILCS 715) requires you to pay interest on a deposit held for more than six months.

• The interest rate is equal to the interest paid on a minimum deposit passbook savings account at the state's largest commercial bank.
• Interest must be paid to the tenant within 30 days of the end of each 12-month rental period.

Note: The Chicago Residential Landlord and Tenant Ordinance (CRLTO) requires interest to be paid regardless of the number of units.

Return Deadline: 30 vs 45 Days

Illinois requires landlords to return the security deposit within 45 days after the tenant moves out.

However, if you are making deductions, the timeline accelerates:

• You must provide an itemized statement of damages to the tenant within 30 days of their move-out.
• The statement must list the exact costs of repair alongside paid contractor receipts.
• If estimates are provided, the final receipts must follow within another 30 days.

What Can Be Deducted

Landlords may withhold funds from the security deposit for:

1. Unpaid rent or late fees stipulated in the lease.
2. Utilities or other fees left unpaid by the tenant.
3. Repair of tenant-caused damage that goes beyond normal wear and tear.
4. Professional cleaning if the unit was not returned in move-in condition.

What is NOT Deductible

• Normal wear and tear - Faded paint, carpet indentations, minor wall scuffs.
• Upgrades - Replacing old appliances with new ones simply because the old ones broke.
• Excessive fees - Cleaning charges must reflect actual costs, not an arbitrary penalty.

Penalties for Non-Compliance

Illinois courts deal harshly with landlords who improperly withhold deposits:

• If a landlord fails to provide the required itemized statement or wrongfully withholds the deposit, the tenant may sue for twice the amount of the deposit.
• Additionally, the landlord will generally be responsible for covering the tenant's court costs and attorney's fees.

Best Practices for Landlords

1. Conduct a move-in inspection and have the tenant sign a condition report.
2. Take dated photos/videos of the property before and after tenancy.
3. Draft a detailed lease that outlines exactly what constitutes deductible damage.
4. Adhere to local laws first, as they almost always override state statutes with stricter caps or mandates.

How Landager Helps

Landager tracks lease terms, required compliance items, and accounting records - making it easy to stay compliant with Illinois regulations.

Back to Illinois Landlord-Tenant Laws OverviewIl-preview mhux disponibbli.