Chicago Security Deposit Law: Deadlines, Interest & Penalties
1. The basic rules
Under RLTO Section 5-12-080, a landlord who collects a security deposit on a covered Chicago unit has to:
- Give a signed receipt naming the landlord, the date, the amount, and a description of the unit.
- Hold the deposit in a federally insured, interest-bearing account at an Illinois financial institution — not mixed with the landlord's own funds.
- Disclose the name and address of that bank, either in the lease or in writing within 14 days if there's no written lease.
- Pay interest annually on deposits or prepaid rent held more than six months, within 30 days after each 12-month period.
These aren't formalities — a missed step on any one of them can trigger the statutory penalty covered below.
2. Free tool: Deposit Interest & Demand Letter Generator
No signup. Runs in your browser. Enter your deposit amount and move-out date to see the interest owed, whether your landlord has missed the return deadline, and download a ready-to-send demand letter.
3. The 45-day and 30-day deadlines
| Requirement | Deadline |
|---|---|
| Return deposit + interest in full (no deductions) | 45 days after move-out |
| Send itemized statement of damages, if deducting | 30 days after move-out |
| Pay annual interest during tenancy | Within 30 days after each 12-month period |
Both clocks start on your actual move-out date, not your lease end date, if you vacated early with the landlord's knowledge. Keep a dated record of when you returned keys.
4. What landlords can and can't deduct
A landlord may deduct for unpaid rent and the reasonable cost of repairing damage you caused. They can't deduct for:
- Normal wear and tear (worn carpet, minor scuffs, faded paint from years of sun exposure)
- Pre-existing damage that was there before you moved in
- Repairs the landlord can't back up with an itemized statement and receipts
If deductions are made, the itemized statement has to include actual or estimated repair costs, and the landlord must follow up with paid receipts if estimates were used initially.
5. The two-times-deposit penalty
This is the part that makes Chicago's ordinance unusually tenant-favorable: under Section 5-12-080(f), a landlord who violates any deposit requirement — wrong account, missing interest, late return, no itemized statement — owes the tenant two times the deposit amount, plus the deposit and interest itself, plus attorney's fees and court costs. Courts have treated this as a strict-liability penalty: the landlord's excuse (lost check, forgot, property manager's mistake) doesn't matter once a violation is established.
6. If your landlord is past the deadline
- Confirm your move-out date and count 45 days forward. Use the tool above to check.
- Check your email and mail for any itemized statement — it may have been sent to an old address.
- Send a written demand letter referencing Section 5-12-080 and giving a deadline (the tool above generates one).
- Keep records of your original receipt, lease, move-out photos, and any correspondence.
- Consult an attorney or file in small claims if the landlord doesn't respond — many attorneys take these cases on contingency because of the fee-shifting provision.
7. Related articles
8. FAQ
How long does a Chicago landlord have to return my security deposit?
45 days after you vacate. If deductions are being made, the itemized statement is due within 30 days.
What happens if my landlord misses the deadline?
You're generally entitled to two times the deposit amount plus interest, attorney's fees, and costs.
Do Chicago landlords have to pay interest on deposits?
Yes, on deposits held more than six months. The 2026 rate is 0.01%, set annually by the City Comptroller.
Can my landlord keep my deposit for normal wear and tear?
No. Deductions are limited to unpaid rent and tenant-caused damage, backed by an itemized statement and receipts.