Illinois Security Deposit Law: Limits, Deadlines & Deductions

Three sets of rules, depending on the address

Illinois deposit law works in layers. State law sets the floor for everyone. Chicago and suburban Cook County each add their own ordinance on top. Before anything else, figure out which layer your rental sits in.

Where the rental is	Deposit cap	Return deadline	Interest
Rest of Illinois	None	30 days to itemize, 45 to return in full	Only in buildings with 25+ units, held 6+ months
Suburban Cook County (RTLO)	1.5 months’ rent	Ordinance rules apply on top of state law	Required, with limited exemptions
Chicago (RLTO)	None	45 days	Required, with limited exemptions

The Chicago ordinance is the strictest. It requires a separate account, receipts, interest, the 45-day return and a 2x penalty, and small technical mistakes can cost you. If you own in the city, read the ordinance itself or have a local attorney review your lease and deposit process.

What counts as the deposit

Outside Cook County there’s no cap, so the question of what counts mostly matters for tracking. Any refundable money you hold against damage or unpaid rent (a pet deposit, a key deposit) should go in the same ledger and the same statement at move-out. In suburban Cook County, add them together and keep the total at or below 1.5 months’ rent.

Prepaid last month’s rent is rent, not a deposit you can deduct damage from. Label it clearly in the lease so nobody argues about it later.

The 30-day statement and the 45-day backstop

The Security Deposit Return Act (765 ILCS 710/1, as amended by P.A. 103-0224) gives you two paths:

1. You’re deducting for damage. Within 30 days after the tenant vacates or their right of possession ends (whichever is later), deliver an itemized statement of the damage and the estimated or actual cost. Attach paid receipts, or copies of estimates if the work isn’t done yet. If you sent estimates, follow up with the paid receipts within 30 days after you send the statement.
2. You’re not deducting. Return the full deposit within 45 days.

The old rule exempted owners of fewer than five units. That exemption ended January 1, 2024, so a landlord with one rented condo in Springfield follows the same timeline as a large building in Naperville.

Wear and tear versus damage

You can deduct unpaid rent and the cost of repairing damage beyond normal wear and tear. Normal wear covers the slow decline of a unit from ordinary living: minor wall scuffs, faded paint, carpet worn flat where people walk. Damage is something that shouldn’t have happened: a broken window, a door off its hinges, pet urine soaked into the subfloor, burns in the countertop.

Cleaning is a common fight. A unit left with trash, a filthy oven and a stained tub justifies a cleaning charge. A unit that is broom-clean but not spotless usually doesn’t.

Interest under the state law

The Security Deposit Interest Act (765 ILCS 715) applies to buildings with 25 or more units when you hold the deposit for six months or more. Most small landlords outside Cook County won’t owe interest under state law. In Chicago and suburban Cook County, interest is required regardless of building size, and the local rate and timing rules apply.

A worked example at $1,600 a month

You rent a two-bedroom unit in a Peoria fourplex for $1,600 and took a $1,600 deposit. No state interest applies (four units). The tenant’s right to possession ends October 31 and they move out the same day.

During the walk-through you find a cracked bathroom sink ($340 to replace, receipt from the plumber) and a closet door with a broken track ($85 estimate; the part is on order). The carpet is worn in the hallway after three years, which is wear and tear.

By November 30 you send an itemized statement listing $425 in deductions, with the paid plumbing receipt and a copy of the door estimate, plus a check for $1,175. When the door repair is finished and paid, you send that receipt within 30 days of the statement.

The same unit in Evanston, under the Cook County ordinance, would need a deposit of no more than $2,400 and would owe interest under the local rules.

What bad faith costs

If a court finds you withheld any part of the deposit in bad faith, you can owe twice the deposit plus the tenant’s court costs and attorney fees. Missing the 30-day statement is the most common way small landlords lose their right to keep anything.

This page is general information, not legal advice. For Chicago or Cook County properties especially, a local attorney is worth the call before you deduct.