Security deposits in Illinois are regulated by Illinois Compiled Statutes, Chapter 765, Acts 710 - 715. Certain municipalities may have local laws that supplement state regulations. To ensure full compliance, verify the regulations applicable in your area.

Maximum Security Deposit

Illinois state law does not currently have a limit on the amount that landlords/property managers can require as a security deposit.

Holding & Interest Requirements

Holding Requirements: Illinois state law does not currently specify where landlords/property managers must hold security deposits.

Interest on Deposits: If a property has 25 or more units in a single building, or a connected complex of buildings, and the tenant’s security deposit is held for more than 6 months, the landlord/property manager must pay interest to the tenant. 

The required interest rate is the rate paid by the largest commercial bank in Illinois on minimum deposit passbook savings accounts as of December 31st of the calendar year immediately before the parties signed the lease. Interest should be calculated from the date the tenant gives the landlord/property manager the security deposit. 

Within 30 days after the end of each 12-month rental period, and so long as the tenant has not defaulted on the lease, the landlord/property manager must pay any accumulated interest to the tenant, so long as the interest earned is more than $5, via cash or a credit applied to rent. At the end of the tenancy, the landlord/property manager must pay to the tenant any interest that has accumulated since the last interest payment.

Information Provided to Tenant: There is currently no specific requirement for landlords/property managers to provide tenants with information about where the security deposit is held. 

Deposit Refunds

Timeline: Within 30 days after the tenant vacates the property, the landlord/property manager must either (1) return the full security deposit or (2) provide the tenant with an itemized statement of deductions, along with the portion of the security deposit being returned.

Permissible Deductions: Landlords/property managers may deduct the following from security deposit funds:

• Unpaid rent
• Damages beyond normal wear and tear, including cleaning fees to restore the unit to its condition at the start of the tenancy

Documentation of Deductions: If any portion of the security deposit is withheld, the landlord/property manager must provide the tenant with an itemized statement listing each deduction from the security deposit and the estimated or actual cost of repairing/replacing any damaged items, with copies of paid receipts. If the estimated rather than the actual costs are included in the statement, the landlord/property manager must provide copies of paid receipts to the tenant within 30 days of the statement being provided to the tenant. The landlord/property manager may provide the itemized statement by personal delivery, mail to the tenant's last known address, or email to a verified email address provided by the tenant.

‍Penalties for Violations: Failure to return the security deposit or provide an itemized statement of deductions and supporting receipts in bad faith may result in the landlord/property manager being liable for up to two times the amount of the security deposit, plus attorney’s fees and court costs if the tenant wins in a lawsuit. If the landlord/property manager intentionally violates Illinois state law, they may be liable for a penalty of $100 per day the security deposit is withheld. However, if the tenant does not provide a mailing address or email address, the landlord/property manager will not be liable for damages or penalties as a result of the tenant's failure to provide such an address. If the landlord/property manager willfully fails to pay interest as required, the landlord/property manager may be liable for the amount of the security deposit, court costs, and reasonable attorney's fees if the tenant wins in a lawsuit.

Sale of the Rental Property

If the property is sold, within 21 days after the new owner receives the security deposit and the tenant’s name and address, the new owner must post a written notice on the primary entrance of the premises stating that the new owner has acquired the security deposit for that rental property. The original landlord will remain jointly and severally liable with the new owner to the tenant for the security deposit.