Chicago · Renting
Chicago treats a deposit as the tenant’s money being held, not the landlord’s money being kept. Nearly every rule below follows from that, and most of them surprise people who have rented elsewhere.
The rules here are strict in both directions. A landlord who handles a deposit the way it is handled in most American cities is exposed to damages of twice the deposit — and a tenant who doesn’t know the deadlines usually has no idea they are owed anything.
Where your deposit is supposed to sit
A landlord must hold every security deposit in a federally insured, interest-bearing account at an Illinois financial institution, and may not mix it with their own money.
In much of the country a deposit can sit in an ordinary operating account. Here it is segregated by law, and mixing it with operating funds is itself the violation — separately from anything that happens at move-out.
Rent and deposit may arrive together, but the deposit has to be moved into a compliant separate account within five business days. The clock runs from when the money was accepted, not from when the tenancy starts.
What you should have been given when you paid it
A receipt — and the ordinance says what it has to contain: the amount, the name of the person receiving it, the landlord’s name if an agent took it, the date, a description of the unit, and a signature. Where the deposit was paid by electronic transfer, a shorter electronic receipt is allowed instead.
A bank record, a cancelled cheque, or a line in the lease is not a receipt under this section. The ordinance specifies both what the receipt must contain and that it be signed.
It earns interest, and you are paid that every year
Where a deposit is held for more than six months, the landlord must pay the accrued interest to the tenant within 30 days after the end of each 12-month rental period.
Paying a tenant interest on their own deposit, annually, is not the norm in most American rental markets. It is a recurring obligation here — not a single settlement at move-out.
The rate is set by the City Comptroller: the average of three rates — savings, money market, and six-month certificates of deposit — at the commercial bank with the most Chicago branches. It is announced at the start of each year, and the rate that governs an agreement is the one most recently announced when that agreement was made or renewed.
We don’t publish the current rate. It changes every January, and a stale figure on a page like this is worse than no figure — it gets quoted. The mechanism above is stable; the number is one lookup from the Comptroller’s office.
Getting it back: two clocks, and one of them is narrow
A landlord must return the deposit within 45 days after the tenant vacates. There is a second, much shorter deadline — seven days — but it applies only where a tenant terminates the agreement after fire or casualty damage to the unit or common area.
The seven-day clock is often described as attaching to any notice of termination. It does not. For an ordinary move-out — lease ending, notice given, keys returned — the forty-five day rule is the one that applies.
If they keep part of it
A landlord withholding anything for damage must deliver or mail an itemized statement within 30 days, giving the cost of repairing or replacing each item. That cost may be an estimate — but paid receipts, or a certification of actual costs where the landlord’s own employees did the work, must follow within a further 30 days of the estimate.
An estimate is permitted, so an itemized statement quoting estimated costs is not itself a defect. What it is not is the end of the matter — it starts a second thirty-day clock for the receipts.
What happens when a landlord gets this wrong
A landlord who fails to comply with these provisions is liable to the tenant for damages of two times the security deposit, plus the interest.
The part that catches people: it attaches to procedural failures, not only to wrongfully keeping money. The account, the receipt, the annual interest, the deadlines — a slip on any of them can trigger it, in a tenancy where the deposit was always going to be returned in full.
One narrow exception exists, for interest paid on time but in a deficient amount, with a short window to put it right.
What people don’t know to ask
Four things that come up after the fact, on both sides of the lease.
- The exposure starts the day the deposit is taken, not the day the tenancy ends. Most of these rules are about the middle of a tenancy.
- Interest is annual. If you have been in the unit three years, you should have been paid twice already — not once at the end.
- The receipt requirement carries its own separate remedy, distinct from the two-times damages.
- Whether the ordinance covers your unit at all is its own question, and the answer is not “every rental in Chicago.”
Whether any of this applies to a particular tenancy, and what to do if it has gone wrong, is a question for an attorney. The current interest rate is published by the Office of the City Comptroller.
Sources
- Chicago Municipal Code 5-12-080 — security deposits. Served as 2026 S-74 (current).
- Chicago Municipal Code 5-12-081 — interest rate on security deposits. Served as 2026 S-74 (current).
- Chicago Municipal Code 5-12-110(g) — tenant remedies where the unit is damaged or destroyed by fire or casualty. Referenced by 5-12-080(d).
Every statement on this page was read against the ordinance text rather than against another summary of it. Four statements in our source material were found wrong on that reading and corrected before this page was written — including the seven-day return deadline, which is widely repeated as a general rule and is not one. Where a figure changes yearly we say so and decline to print it. Nothing here is legal advice; it is a description of what the ordinance requires.