House & Apartment

A security deposit is money a tenant pays to a landlord at the start of a lease. The landlord holds the deposit while the tenant lives there. For many properties, the landlord must also pay interest to the tenant on the security deposit while holding the money.

After the tenant moves out, the landlord has a limited amount of time to:

• Return the full amount of the security deposit to the tenant, 
• Apply part or all of the security deposit to cover unpaid rent, or
• Use part or all of the security deposit to pay for restoring the unit to its original condition.

Some local laws also give landlords the right to apply a security deposit to other expenses when a tenant leaves:

• Oak Park landlords can apply the security deposit to court costs (but not legal fees) awarded by a court in a case that was not later settled, as long as the rental is not excluded from the ordinance (which the owner must make clear in marketing and application materials),
• Suburban Cook County landlords can apply the security deposit to court costs (but not legal fees) awarded by a court in a case that was not later settled, as long as the rental is not excluded from the ordinance (which the owner must make clear in marketing and application materials).

In most of Illinois, there are no limits on how much a landlord can charge as a security deposit. One or two months' rent is common. Some local laws have specific restrictions:

• Evanston caps all security deposits at 1½  (one-and-a-half) times the monthly rent,

• Oak Park requires any security deposit to be at least one month's rent and no more than 1½ (one-and-a-half) times the monthly rent unless the rental is excluded from the ordinance (which the owner must make clear in marketing and application materials), and

• Suburban Cook County limits security deposits to 1½ (one-and-a-half) times the monthly rent unless the rental is excluded from the ordinance (which the owner must make clear in marketing and application materials).

Security deposits for tenants with a Housing Choice Voucher (HCV) must be similar to those charged for other private tenants in the area.

Additional restrictions may apply based on the type of housing. For example:

• Project-based housing: Landlords may charge up to $50 or one month's Total Tenant Payment, whichever is greater.
• Public housing: Landlords cannot charge more than one month's rent or more than a reasonable amount determined by the Public Housing Authority.
• Mobile home parks: Landlords cannot charge more than one month's rent.

Throughout Illinois, private landlords must pay tenants interest on their security deposit when:

• There are 25 or more units on the property, and
• The landlord has held the security deposit for more than 6 months.

This law does not apply to public housing.

Some cities require private landlords to pay interest on more types of security deposits:

• In Chicago, interest applies to security deposits unless the property is owner-occupied and has 6 or fewer units, and 
• In Urbana, interest must be paid on all security deposits over $100 that are held for more than 6 months.

Security deposit interest belongs to the tenant, not the landlord. The landlord can use the security deposit only toward repairs. A tenant can negotiate with the landlord to apply the interest to settle a debt.

In most parts of Illinois, if the interest is $5 or more, and the tenant is not in default under the terms of the lease, the landlord has 30 days after the end of a 12-month rental period to:

• Pay the tenant the amount generated in interest in cash, or
• Apply the interest to the rent due.

When the tenant moves out, the landlord must pay any remaining interest to the tenant.

The interest rate that applies to security deposits depends on the property's location. 

Most of Illinois uses the interest rate of the largest commercial bank based in Illinois, specifically:

• The interest rate for that bank’s minimum deposit passbook savings account,
• From December 31st of the year before the lease starts.

In Chicago, the interest rate is calculated by the city comptroller and announced through multiple channels.

In Urbana, the interest rate is based on that of the largest commercial bank in Champaign County. The rate that applies is:

• The interest rate for that bank’s minimum deposit passbook savings account,
• From the most recent June 30th before the lease starts.

Everywhere in Illinois except Chicago, a tenant can sue a landlord for failure to pay the required interest on a security deposit:

• During a lease, if the landlord fails to pay cash or apply a rent credit within 30 days of the last month of a 12-month lease and the tenant has been complying with the lease, or 
• After a lease ends, if the landlord fails to return any remaining interest.

If the tenant can prove that the landlord willfully failed or refused to pay, they can be awarded:

• An amount equal to the entire security deposit, and
• Court costs and reasonable attorney’s fees.

In Chicago, if the landlord fails to return the interest on time, the tenant must give written notice to the landlord of the issue, and the landlord has 14 days to respond with either:

• The correct amount of interest plus $50, or
• A written response explaining the calculation of interest.

If the tenant sues the landlord after receiving the explanation and proves that the calculation was incorrect, the tenant can be awarded twice the security deposit plus interest.

No, a move-in fee is not a security deposit. Move-in fees:

• Do not have the same protections as a security deposit, and
• Are typically non-refundable.

However, if the move-in fee is a large amount, like once or twice the monthly rent, then it might be considered a security deposit. Starting January 1, 2027, unless the property is owner-occupied and has 6 or fewer units, the landlord must disclose the move-in fee in applications and on the front page of a written lease. Learn more about the Rental junk fee ban.

Oak Park landlords cannot charge both a security deposit and a move-in fee (unless the rental is excluded from the ordinance, which the owner must make clear in marketing and application materials). If they choose to charge a one-time, non-refundable move-in fee, it cannot exceed $500.

No, a holding deposit is not a security deposit. Landlords may require a holding deposit from a renter to hold the apartment until the renter signs the lease. Learn more about holding deposits and avoiding scams.

Ask for a written agreement before paying a holding deposit. Make sure the agreement states:

• If the deposit is refundable when the potential renter is not approved to sign a lease or ends up not renting the unit,
• When the landlord has to return the deposit, and how long they have to do so, and
• Whether the holding deposit can be applied to a security deposit after signing a lease.

Generally, Illinois landlords have 30 days after a tenant moves out to determine what damages need to be repaired and 45 days to return the deposit. The exceptions are:

• Evanston, where landlords have 21 days to return the deposit and an itemized statement of any deductions,
• Oak Park, where landlords have 30 days to return the deposit and an itemized statement of any deductions unless the rental is excluded from the ordinance (which the owner must have made clear in marketing and application materials), and
• Suburban Cook County, where landlords have 30 days to return the deposit and an itemized statement of any deductions unless the rental is excluded from the ordinance (which the owner must have made clear in marketing and application materials).

This only applies to using the security deposit to pay for damages. If the repair costs exceed the security deposit, the landlord may continue making repairs and sue the tenant for the additional property damage. Lawsuits for up to $10,000 in property damage can be handled in small claims court.

The tenant must provide a current mailing address or email address so the landlord can send:

• The written statement, and
• The returned security deposit

If the tenant fails to provide this information, the landlord is not liable for damages or penalties resulting from failure to send the statement or deposit.

To use a security deposit to cover damages to the property, a landlord must:

• Provide the tenant with an itemized list of damages to the property,
• Include the estimated or actual cost for repairs or replacements, and
• Attach receipts for the damages.

The landlord must send these within 30 days of the tenant moving out or the lease ending, whichever is later. When a landlord includes the estimated cost for repairs or replacements, they must also send any receipts to the tenant within 30 days of when the first list was sent.

If cleaning, repair, replacement, or other damage costs were specified in the lease, the itemized list must:

• Include the costs specified in the lease for the relevant cleaning, repairs, replacements, or damages, and
• Include a copy of the portion of the lease where the costs were listed.

The landlord can provide the tenant with the list of damages by:

• Delivering it to the tenant in person,
• Through postmarked mail to the tenant’s last known address, or
• To the tenant’s verified email address.

A security deposit can be used to pay rent:

• If there is unpaid rent at the end of the lease, or 

• If the landlord and tenant agree. 

Get the deal in writing if a landlord agrees to collect unpaid rent from the security deposit as part of a move-out agreement.

When a tenant does not pay their last month's rent, is still living in the unit, and there is no agreement to apply the security deposit toward overdue rent, the landlord can still serve the tenant with an eviction notice for unpaid rent. Learn more about Dealing with unpaid rent.

Once the deadline to provide information and return the deposit has passed, the tenant can sue the landlord if they believe the landlord did something wrong. If the tenant can prove that the landlord did not provide the required itemized statement, gave it in bad faith, or failed to return the deposit within the time limit, they can be awarded:

• Twice the amount of the security deposit owed, and
• Court costs and reasonable attorney’s fees.
   

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