| Quick Facts | Answer |
| Maximum / Limit | No limit (except for mobile homes) |
| Receipt Requirement | None |
| Inventory Requirement | None |
| Interest Requirement | Sometimes required |
To learn about laws on security deposit returns in Illinois, click here.
Some cities and counties may have regulations which are more restrictive than those presented here. Always check local laws.
Maximum Security Deposit Allowed in Illinois
There is no limit on the maximum security deposit by Illinois state law, except in mobile home parks, where the security deposit is limited to one month’s rent.
However, some local governments have established their own rules regarding security deposits, including:
In suburban Cook County (not within Chicago city limits), the maximum security deposit is limited to one and one-half month’s rent with some exceptions, including:
- Owner-occupied properties with six or fewer units
- Some single-family homes and condominiums
- Shareholders living in cooperatives
The Cook County Code of Ordinances only applies to unincorporated areas of the county and Chicago is governed by Chicago Municipal Code. At the time of the adoption of the Residential Tenant Landlord Ordinance in 2021, the county estimated that it would apply to more than 245,000 suburban renter households.
Check your local laws to determine if there are any rules regarding security deposits.
Can Landlords Charge an Additional Pet Deposit in Illinois?
Yes, landlords can charge an additional pet deposit in Illinois, except for service dogs and emotional support animals.
However, in suburban Cook County, the total security deposit, including a pet deposit, cannot exceed one and one-half month’s rent. and in mobile home parks across the state, the maximum is one month’s rent.
How Much Rent Can a Landlord Collect Upfront in Illinois?
There is no limit on the amount of rent that can be collected upfront in Illinois. Many states have a limit on the amount of rent that can be collected at once, but Illinois does not.
Security Deposit Collections in Illinois
While other states have additional requirements for landlords that collect a security deposit, such as providing certain documentation of the condition of the unit at move-in, Illinois does not.
Do Landlords Have To Provide a Receipt for the Security Deposit in Illinois?
Landlords are not required to provide a receipt for the security deposit by Illinois state law. However, in some jurisdictions, like Chicago and suburban Cook County, landlords must provide a receipt for any security deposit collected.
The receipt must include the following information:
- Amount of the deposit
- Name of the person receiving the deposit
- Name of the landlord
- Date it was received
- Description of the dwelling unit
- Signature of the person receiving the deposit
In Chicago and suburban Cook County, landlords are also required to either disclose information about where the security deposit is held in the lease agreement or provide written notice to the tenant within 14 days if there is no written lease agreement.
What Obligations Do Landlords Have To Establish the Condition at Move-in in Illinois?
Illinois law does not require landlords to document or establish the property’s condition at move-in. While other states legally require a written inventory of damages to be completed when collecting a security deposit, Illinois does not.
However, your local law may require an initial inspection or other pre-tenancy obligations, like in Mount Prospect, where landlords are required to conduct a walk-through inspection if requested by the tenant.
Security Deposit Holdings in Illinois
Illinois law does not require landlords to hold security deposits separate from other funds. However, in Chicago and suburban Cook County landlords are required to keep the security deposits separate from their own assets in a federally insured interest-bearing account in a financial institution located in the State of Illinois.
Are Tenants Entitled to Interest on Their Security Deposit in Illinois?
Illinois law does require landlords to provide interest on held security deposits, but only in some situations, and some cities, like Chicago, have different rules regarding interest on security deposits. The interest rate for 2023 in both Illinois and Chicago is 0.01%.
By Illinois state law, landlords must pay interest on security deposits if they own 25 or more units (either in one building or in a complex of buildings) and the security deposit is held for six months or longer.
In Chicago, tenants are entitled to interest if their security deposit is held for longer than six months. In such cases, the landlord owes interest from the first day of the lease term. Dwelling units in owner-occupied premises containing six or fewer units are exempt from this rule.
When a tenant is entitled to interest on their security deposit, it must be either credited towards rent or paid to the tenant directly within 30 days after the end of each 12-month rental period if the accrued interest is $5 or more. However, the $5 limit does not apply in Chicago, so interest must always be paid to eligible tenants on an annual basis.
How Are Security Deposits Accounted for in Illinois?
Security deposits are not considered taxable income when they are collected.
What Happens to a Security Deposit When the Property is Sold in Illinois?
When a property is sold in Illinois, the original holder of the security deposit will remain jointly and severally liable until it is transferred. The new owner must handle it according to the same rules.
Upon receiving the security deposit and the name and address of the tenant, the new owner has 21 days (14 days in Chicago and Cook County) to post a written notice. It must be posted on the main entrance of each unit stating that the new owner has received the security deposits.
In Chicago and suburban Cook County, the new landlord has 14 days after the sale to notify the tenant of their receipt of the security deposit in writing by mail or hand delivery to the tenant. Additionally, the original holder of the security deposit has 10 days to send written notice to the tenant including the successor landlord or his agent:
- Name
- Business address
- Business telephone number
Sources
- 1 765 ILCS 745/12
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No lease hereafter executed or currently existing between a park owner and tenant in a mobile home park or manufactured home community in this State shall contain any provision:
(a) Permitting the park owner to charge a penalty fee for late payment of rent without allowing a tenant a minimum of 5 days beyond the date the rent is due in which to remit such payment;
(b) Permitting the park owner to charge an amount in excess of one month’s rent as a security deposit;
(c) Requiring the tenant to pay any fees not specified in the lease;
(d) Permitting the park owner to transfer, or move, a mobile home to a different lot, including a different lot in the same mobile home park or manufactured home community, during the term of the lease;
(e) Waiving the homeowner’s right to a trial by jury. If one provision of a lease is invalid, that does not affect the validity of the remaining provisions of the lease.
Source Link - 2 Cook County Code of Ord. § 42-111(a)
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A landlord may not demand or receive a security deposit in an amount in excess of one and one-half months’ rent. A landlord may not avoid the coverage of this subsection by labeling the fee or charge as anything other than a security deposit.
Source Link - 3 Cook County Code of Ord. § Sec. 42-102(a)
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The following arrangements are not governed by this Article:
(1) Transient occupancy in a hotel or motel;
(2) Residence at a public or private medical, extended care facility, geriatric facility, convent, monastery, religious institution, temporary overnight shelter, transitional shelter, educational dormitory, or in a structure operated for the benefit of a social or fraternal organization;
(3) Occupancy under a contract sale of a dwelling unit if the occupant is the purchaser;
(4) Occupancy in a cooperative apartment by a shareholder of the cooperative;
(5) Occupancy by an employee of a landlord whose occupancy is conditional upon employment in or about the premises;
(6) Residential buildings in which occupancy is limited to six units or less and which are owner-occupied;
(7) A residential unit that is a single-family home, including a single condominium unit, provided that:
a. This is the only residential unit leased by the owner,
b. The owner or immediate family member has actually resided at the property for at least one month in the 12 months prior to marketing the property,
c. The owner (not a management company) personally manages the unit, and
d.The owner is not a corporation;
(8) Dwelling units in hotels, motels, inns, bed-and-breakfast establishments, rooming houses, and boardinghouses, but only until such time as the dwelling unit has been occupied by a tenant for 32 or more continuous days and tenant pays a monthly rent, exclusive of any period of wrongful occupancy contrary to agreement with an owner. No landlord shall bring an action to recover possession of such unit, or avoid renting periodically, in order to avoid the application of this Article. Any willful attempt to avoid application of this Article by an owner may be punishable by criminal or civil actions.
Source Link - 4 Chicago Mun. Code § 5-12-080(b)
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(b) (1) Except as provided for in subsection (b)(2), any landlord who receives a security deposit from a tenant or prospective tenant shall give said tenant or prospective tenant at the time of receiving such security deposit a receipt indicating the amount of such security deposit, the name of the person receiving it and, in the case of the agent, the name of the landlord for whom such security deposit is received, the date on which it is received, and a description of the dwelling unit. The receipt shall be signed by the person receiving the security deposit. Failure to comply with this subsection shall entitle the tenant to immediate return of security deposit.
(2) Upon payment of the security deposit by means of an electronic funds transfer, the landlord shall give the tenant a receipt that complies with subsection (b)(1), or an electronic receipt that acknowledges the receipt of the security deposit. The electronic receipt shall set forth the date of the receipt of the security deposit, the amount of the deposit, a description of the dwelling unit and an electronic or digital signature, as those terms are defined in 5 ILCS 175/5-105, of the person receiving the deposit.
Source Link - 5 Cook County Code of Ord. § Sec. 42-111(h)
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Any landlord who receives a security deposit from a tenant shall give a receipt indicating the amount of such security deposit, the name of the person receiving it, and, in the case of the agent, the name of the landlord for whom such a security deposit is received, the date on which it is received, and a description of the dwelling unit. The receipt shall be signed by the person receiving the security deposit. Failure to comply with this subsection shall entitle the tenant to immediate return of the security deposit.
Source Link - 6 Mt. Prospect Code of Ord. § 23.1806(A)(3)
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Where requested by either party to a rental agreement, a walk through inspection shall be made by the landlord and tenant, prior to the commencement of the rental term and/or again at the termination thereof and an inspection checklist of all damaged or missing items shall be made at the time of the walk through inspection and a copy thereof furnished to each party. Such request shall be in writing, shall be personally served not less than forty eight (48) hours, or mailed not less than five (5) business days before the date of the requested inspection and such inspections shall be conducted, unless otherwise agreed, on the landlord’s regular business days and during his regular business hours. Items, which are checked as missing or damaged prior to commencement of the rental term, shall not be charged against the security deposit of the tenant. Upon request of the landlord or tenant, a representative of the village’s environmental health department may accompany the parties on such walk through inspections.
Where a walk through inspection is requested, as provided herein, no portion of a security deposit shall be applied against damages incurred to a rental unit, unless the notice of damages required in subsection A2 of this section, includes the completed inspection checklist(s) showing the occurrence of such damage during the rental term.
Source Link - 7 Chicago Mun. Code § 5-12-080(a)
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(1) A landlord shall hold all security deposits received by him in a federally insured interest- bearing account in a bank, savings and loan association or other financial institution located in the State of Illinois. A security deposit and interest due thereon shall continue to be the property of the tenant making such deposit, shall not be commingled with the assets of the landlord, and shall not be subject to the claims of any creditor of the landlord or of the landlord’s successors in interest, including a foreclosing mortgagee or trustee in bankruptcy.
(2) Notwithstanding subsection (a)(1), a landlord may accept the payment of the first month’s rent and security deposit in one check or one electronic funds transfer, and deposit the check or electronic funds transfer into one account, if within 5 business days of the acceptance of the check or electronic transfer, the landlord transfers the amount of the security deposit into a separate account that complies with subsection (a)(1).
(3) The name and address of the financial institution where the security deposit will be deposited shall be clearly and conspicuously disclosed in the written rental agreement signed by the tenant. If no written rental agreement is provided, the landlord shall, within 14 days of receipt of the security deposit, notify the tenant in writing of the name and address of the financial institution where the security deposit was deposited.If, during the pendency of the rental agreement, a security deposit is transferred from one financial institution to another, the landlord shall, within 14 days of such transfer, notify the tenant in writing of the name and address of the new financial institution.
(4) Notwithstanding subsection (a)(1), a landlord shall not be considered to be commingling the security deposits with the landlord’s assets if there is excess interest in the account in which the security deposits are deposited. “Excess interest” means the amount of money in excess of the total amount of security deposits deposited into the account plus any interest due thereon.
Source Link - 8 Cook County Code of Ord. § Sec. 42-111(f)
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The landlord shall clearly and conspicuously disclose the name of the financial institution where the landlord has deposited the security deposit in the written rental agreement signed by the tenant.
Source Link - 9 765 ILCS 715/1
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A lessor of residential real property, containing 25 or more units in either a single building or a complex of buildings located on contiguous parcels of real property, who receives a security deposit from a lessee to secure the payment of rent or compensation for damage to property shall pay interest to the lessee computed from the date of the deposit at a rate equal to the interest paid by the largest commercial bank, as measured by total assets, having its main banking premises in this State on minimum deposit passbook savings accounts as of December 31 of the calendar year immediately preceding the inception of the rental agreement on any deposit held by the lessor for more than 6 months.
Source Link - 10 Chicago Mun. Code § 5-12-080(c)
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A landlord who holds a security deposit or prepaid rent pursuant to this section for more than six months shall pay interest to the tenant accruing from the beginning date of the rental term specified in the rental agreement at the rate determined in accordance with Section 5-12-081 for the year in which the rental agreement was entered into. The landlord shall, within 30 days after the end of each 12-month rental period, pay to the tenant any interest, by cash or credit to be applied to the rent due.
Source Link - 11 Chicago Mun. Code § 5-12-020(a)
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Rental of the following dwelling units shall not be governed by this chapter, unless the rental agreement thereof is created to avoid the application of this chapter:
(a) Dwelling units in owner-occupied premises containing six units or fewer; provided, however, that Sections 5-12-130(j) and 5-12-160 shall apply to every rented dwelling unit in such premises within the City of Chicago.
Source Link - 12 765 ILCS 715/2
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The lessor shall, within 30 days after the end of each 12 month rental period, pay to the lessee any interest that has accumulated to an amount of $5 or more, by cash or credit to be applied to rent due, except when the lessee is in default under the terms of the lease. The lessor shall pay all interest that has accumulated and remains unpaid, regardless of the amount, upon termination of the tenancy.
A lessor who willfully fails or refuses to pay the interest required by this Act shall, upon a finding by a circuit court that he has willfully failed or refused to pay, be liable for an amount equal to the amount of the security deposit, together with court costs and reasonable attorneys fees.
Source Link - 13 765 ILCS 710/1.1
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In the event of a sale, lease, transfer or other direct or indirect disposition of residential real property, other than to the holder of a lien interest in such property, by a lessor who has received a security deposit or prepaid rent from a lessee, the transferee of such property shall be liable to that lessee for any security deposit, including statutory interest, or prepaid rent which the lessee has paid to the transferor. Transferor shall remain jointly and severally liable with the transferee to the lessee for such security deposit or prepaid rent.
Source Link - 14 765 ILCS 710/1.2
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Notwithstanding Section 1.1, when a lessor transfers actual possession of a security deposit received from a lessee, including any statutory interest that has not been paid to a lessee, to a holder of the certificate of sale or deed issued pursuant to that certificate or, if no certificate or deed was issued, the purchaser of a foreclosed property under Article XV of the Code of Civil Procedure, the holder or purchaser shall be liable to a lessee for the transferred security deposit, including any statutory interest that has not been paid to the lessee, as provided in this Act. Within 21 days after the transfer of the security deposits and receipt of the name and address of any lessee who paid a deposit, the holder or purchaser shall post a written notice on the primary entrance of each dwelling unit at the property with respect to which the holder or purchaser has acquired actual possession of a security deposit. The written notice shall state that the holder or purchaser has acquired the security deposit paid by the lessee in connection with the lessee’s rental of that dwelling unit.
Source Link - 15 Chicago Mun. Code § 5-12-080(e)
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In the event of a sale, lease, transfer of ownership or control or other direct or indirect disposition of residential real property by a landlord who has received a security deposit or prepaid rent from a tenant, the successor landlord of such property shall be liable to that tenant for any security deposit, including statutory interest, or prepaid rent which the tenant has paid to the transferor.
The successor landlord shall, within 14 days from the date of such transfer, notify the tenant who made such security deposit by delivering or mailing to the tenant’s last known address that such security deposit was transferred to the successor landlord and that the successor landlord is holding said security deposit. Such notice shall also contain the successor landlord’s name, business address, and business telephone number of the successor landlord’s agent, if any. The notice shall be in writing.
The transferor shall remain jointly and severally liable with the successor landlord to the tenant for such security deposit or prepaid rent, unless and until such transferor transfers said security deposit or prepaid rent to the successor landlord and provides notice, in writing, to the tenant of such transfer of said security deposit or prepaid rent, specifying the name, business address and business telephone number of the successor landlord or his agent within ten days of said transfer.
Source Link - 16 Cook County Code of Ord. § Sec. 42-111(k) & (l)
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(k) The transferor shall remain jointly and severally liable with the successor landlord to the tenant for such security deposit unless and until this transferor transfers the security deposit to the successor landlord and provides written notice to the tenant of the transfer, specifying the name, business address and business telephone number of the successor landlord or their agent within ten days of the transfer.
(l) Within 14 days from the date of the transfer, the successor landlord shall notify the tenant, in writing, that the security deposit was transferred to the successor landlord and that the successor landlord is holding the security deposit. This written notice shall also contain the name, business address and business telephone number of the successor landlord or their agent.
Source Link
