Illinois Security Deposit Law Explained | What Are an Illinois Landlord’s Security Deposit Obligations?

Updated on:

September 10, 2018

In this article, we explain Illinois security deposit laws and answer the question, “what are an Illinois landlord’s security deposit obligations?” If you would like to know more about the rights of an Illinois tenant, you can read our article, Illinois Tenant Rights Explained.

Illinois tenants may be required to pay a security deposit, which is typically used to cover unpaid rent, repairs, and cleaning fees. Once an Illinois landlord receives a security deposit, he or she is not required to produce proof of receipt, unlike other states.

How Much Does a Security Deposit Cost?

Although security deposits are normally equal to one month’s rent, Illinois landlords can require any amount they prefer. If a tenant’s security deposit is held for six months or longer on a building with 25 units or more, Illinois state law requires landlords to pay their tenants interest on the amount or apply the interest as a credit to the rent every twelve months. If a tenant’s security deposit is held for six months or longer on a building with less than 25 units, Illinois landlords are not required to pay interest.

Do Security Deposits Gain Interest?

Security deposit interest payments have to abide by a strict set of rules. First, the interest rate is always equal to the interest rate paid on minimum deposit savings accounts by the largest commercial bank in Illinois. Second, the tenant has to receive his or her earned interest within 30 days of the end of each twelve-month lease term. However, if the Illinois tenant has defaulted on his or her lease, the landlord is not required to pay this interest. If a

If the landlord fails to pay this interest, the tenant does have the right to sue in order to recover an equal amount to the security deposit, court costs and attorney fees.

Do You Get Your Security Deposit Back When You Move Out?

Luckily, if a tenant moves, The Illinois Security Deposit Return Act grants tenants the right to their security deposits in full within 45 days of the moving date, if:

· The tenant’s building has five units or more

· The tenant does not owe any back rent

· The rental unit is left in acceptable condition

· The rental unit is clean

If a landlord refuses to return all or any portion of a security deposit, the landlord must provide an itemized statement of the rental unit’s damages, along with a paid receipt within 30 days of the tenant’s move date.

What Happens to a Security Deposit if I Switch Landlords?

If an existing landlord transfers ownership to a new landlord in Illinois, the existing landlord is responsible for transferring all pending security deposits to the new landlord, including accrued interest. Once the security deposits are officially transferred, the new landlord has 21 days to alert his or her tenants with a formal notice on the “primary entrance” of all units for whom he or she has received a security deposit, informing tenants that he or she is now in possession of the tenants’ security deposit, including accumulated interest.

If you are an Illinois tenant, and you are wanting to go the extra mile to protect your security deposit, be sure to thoroughly inspect your unit for damages and concerns prior to signing a lease or moving. Document any and all existing damages in writing, with supporting photos.

Originally published at www.oflaherty-law.com.