| 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.
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
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:
- 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 this case, 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…Permitting the park owner to charge an amount in excess of one month’s rent as a security deposit…
Source Link - 2 Cook County Code of Ord. § 42-111
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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.
Source Link - 3 Cook County Code of Ord. § Sec. 42-102
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The following arrangements are not governed by this Article…Occupancy in a cooperative apartment by a shareholder of the cooperative…Residential buildings in which occupancy is limited to six units or less and which are owner-occupied…A residential unit that is a single-family home, including a single condominium unit, provided that…
Source Link - 4 Cook County Code of Ord. § Sec. 42-111
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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 - 5 Chicago Mun. Code § 5-12-080
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…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…
Source Link - 6 Cook County Code of Ord. § Sec. 42-111
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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.
Source Link - 7 Chicago Mun. Code § 5-12-080
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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.
Source Link - 8 Cook County Code of Ord. § Sec. 42-111
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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 Mt. Prospect Code of Ord. § 23.1806
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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…
Source Link - 10 Chicago Mun. Code § 5-12-080
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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.
Source Link - 11 Cook County Code of Ord. § Sec. 42-111
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A landlord shall hold all security deposits in a federally insured account in a bank, savings and loan association, or other financial institution located in the state of Illinois. A security deposit…shall not be commingled with the assets of the landlord…
Source Link - 12 765 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…shall pay interest…on any deposit held by the lessor for more than 6 months…
Source Link - 13 Chicago Mun. Code § 5-12-080
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A landlord who holds a security deposit…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…
Source Link - 14 Chicago Mun. Code § 5-12-020
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…the following dwelling units shall not be governed by this chapter…Dwelling units in owner-occupied premises containing six units or fewer…
Source Link - 15 765 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…
Source Link - 16 Chicago Mun. Code § 5-12-080
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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 - 17 765 ILCS 710/1.1
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Transferor shall remain jointly and severally liable with the transferee to the lessee for such security deposit…
Source Link - 18 765 ILCS 710/1.2
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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…
Source Link - 19 Chicago Mun. Code § 5-12-080
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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…
Source Link - 20 Cook County Code of Ord. § Sec. 42-111
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Within 14 days from the date of the transfer, the successor landlord shall notify the tenant, in writing, that the security deposit was transferred…
Source Link - 21 Chicago Mun. Code § 5-12-080
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…such transferor transfers said security deposit or prepaid rent to the successor landlord and provides notice, in writing…specifying the name, business address and business telephone number of the successor landlord or his agent within ten days of said transfer.
Source Link - 22 Cook County Code of Ord. § Sec. 42-111
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…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.
Source Link
