As a property investor in the state of Illinois, it is essential to understand the landlord-tenant laws that apply in your state. An important part of these laws govern the security deposit and spell out what you must always do and what you can never do. It is important to keep in mind that these are statewide laws, so you should always check with your local government to determine if there are additional laws that apply to your municipality.
Is There a Security Deposit Limit in Illinois?
No, in the state of Illinois, there is no limit to the maximum amount you can charge a tenant as a security deposit.
How Must You Store The Security Deposit in Illinois?If the landlord owns fewer than 25 units:
In Illinois, there are no specific requirements for storing a tenant’s security deposit if a landlord owns fewer than 25 units.If the landlord owns 25 units or more:
If a landlord owns 25 or more units which are located in one building or in a complex, that landlord is required to pay the tenant interest on their security deposit if the landlord keeps the security deposit for longer than six months. This interest rate shall be equal to the interest rate paid on minimum deposit savings accounts by the largest commercial bank in Illinois.
The landlord is required to pay the tenant the interest their account has accrued within 30 days of the end of each 12 month lease term. The landlord can either pay the tenant this amount or credit it toward the tenant’s next month’s rent. A landlord is not required to pay a tenant the interest if the tenant has defaulted on their lease.
Failure to comply with this law may result in a landlord having to pay the tenant their entire security deposit plus applicable court costs and lawyer fees.
Is Written Notice Required After Receipt of the Security Deposit in Illinois?
In Illinois, a landlord is not required to provide a tenant with written notice after receipt of the security deposit.
What Are Some Reasons You Can Keep a Tenant’s Security Deposit in Illinois?
In Illinois, you may be able to keep all or a portion of a tenant’s security deposit to cover:
- Unpaid rent.
- Damage in excess of normal wear and tear.
- Additional costs associated with a breach of lease.
- Utility bills the tenant has not paid.
- Costs to clean the property if the tenant has not done so.
When Must You Return a Tenant’s Security Deposit in Illinois?
Landlords who own five or more units in the state of Illinois have two options for returning a tenant's security deposit:
- 30 Days- If a landlord plans on making deductions from a tenant’s security deposit, the landlord has 30 days from the date the tenant moved out to do so. Within 30 days of the tenant moving out, the landlord must give the tenant written notice, by mail or by personal delivery, as to their intention to keep all or a portion of the tenant’s security deposit.
This notice must include:
- An itemized statement of deductions.
- Actual or approximate cost to fix the damage.
- Copies of any receipts or invoices.
-If the work has not yet been completed and an estimated cost is written, the landlord has an additional 30 days after submitting the written notice to provide the tenant with a copy of the receipt indicating the actual cost of the work.
- 45 Days- If a landlord plans to return a tenant’s security deposit in full, they have 45 days from the date the tenant vacated the unit to do so. There is no need to supply a tenant with written notice if the landlord is returning the security deposit in full.
If a court finds that a landlord does not follow the above procedures for returning a tenant’s security deposit, the landlord may have to pay the tenant double their security deposit, plus any applicable court costs and lawyer fees.
What Happens to the Security Deposit If You Sell Your Property?
If the property changes ownership, other than in a situation where the ownership is transferred to a party who has a lien on the property, the landlord is responsible for transferring all security deposits plus any accrued interest to the new owner.
Within 21 days of receipt of the security deposits, the new owner is responsible for posting a notice on the “primary entrance” of any tenant’s unit for which they have received a security deposit, informing the tenant that they are now in possession of the tenant’s security deposit plus any accumulated interest.
What Is Illinois’ Security Deposit Law?
The original text governing security deposit law in the state of Illinois can be found in 735 ILCS 5/9-201 to 321 and 765 ILCS 705 to 715. Portions of these laws are commonly referred to as the Security Deposit Return Act (765 ILCS 710) and the Security Deposit Interest Act (765 ILCS 715).