Chicago Security Deposit Rules 2026–27: RLTO Receipts, Bank Disclosure, Interest, the 45-Day Deadline and the Two-Times Penalty
Chicago's security deposit law is unusual. In most cities a deposit fight is about one question: did the landlord keep money it shouldn't have? Under Chicago's Residential Landlord and Tenant Ordinance (RLTO), a landlord can owe you twice the deposit for getting the paperwork wrong. That covers a missing receipt, an undisclosed bank, a late interest payment, or an itemized statement without receipts attached.
That makes the RLTO one of the most tenant-protective deposit laws in the country. It also means Chicago renters should read their lease and receipt the day they sign, not the day they move out. This guide walks through each requirement in Municipal Code of Chicago § 5-12-080, as published in the city's official code, along with the City of Chicago's 2026 interest notice.
Step Zero: Does the RLTO Cover Your Apartment?
Before anything else, check coverage. According to the City of Chicago Department of Housing, the RLTO covers most rental properties in Chicago except:
units in owner-occupied buildings with six units or less,
most units in hotels, motels and rooming houses,
dormitories, shelters and employee's quarters,
non-residential rentals, and
owner-occupied co-ops.
If your landlord lives in your three-flat, the Chicago rules below likely do not apply. Illinois state law may still protect you. Talk to legal aid (see the end of this guide) about which rules cover your unit.
Rule 1: The Receipt (Day You Pay)
When a landlord takes a deposit, it must give you a receipt showing:
the amount of the deposit,
the name of the person receiving it (and, if that person is an agent, the landlord's name),
the date it was received, and
a description of the unit.
The receipt must be signed by the person who took the money. If you paid electronically, an electronic receipt with the same details and an electronic or digital signature is allowed.
This rule has teeth. Under § 5-12-080(b)(1), failing to provide the receipt entitles the tenant to immediate return of the security deposit.
Rule 2: The Bank Account
The landlord must hold deposits in a federally insured, interest-bearing account at a financial institution located in Illinois. The money stays your property. It can't be mixed with the landlord's own funds, and the landlord's creditors can't reach it, including a foreclosing lender or a bankruptcy trustee.
Two disclosure duties follow:
The name and address of the bank must be clearly and conspicuously disclosed in your written lease. With no written lease, the landlord must tell you in writing within 14 days of receiving the deposit.
If the deposit is moved to a different bank during your lease, you must be told in writing within 14 days of the transfer.
A landlord may take the first month's rent and the deposit in one check or transfer, but must move the deposit into a compliant separate account within 5 business days.
Rule 3: Annual Interest
If the landlord holds a deposit or prepaid rent for more than six months, it owes you interest. Interest runs from the start of the lease at the rate set for the year the lease was signed. It must be paid within 30 days after the end of each 12-month rental period, in cash or as a credit against rent.
The City Comptroller sets the rate each year. The City's notice sets the rate for January 1 through December 31, 2026 at 0.01%. The Department of Housing says the rate has been 0.01% every year since 2015. Leases signed earlier carry the rate for their year.
Year lease was signed | Interest rate (City of Chicago notice) |
2015 through 2026 | 0.01% |
2014 | 0.013% |
2013 | 0.023% |
2012 | 0.057% |
2011 | 0.073% |
2010 | 0.073% |
2009 | 0.12% |
2008 | 1.26% |
At 0.01%, the interest on a typical deposit comes to pennies. The importance of this rule isn't the money. It's that late or missing payment is a violation that can trigger the penalty below.
If the interest was paid but the amount is wrong: the landlord isn't automatically liable. You must first send written notice that the amount was deficient. The landlord then has 14 days to either pay the correct interest plus $50 or send a written explanation of how it calculated the interest. If it does neither, the penalty applies. If you disagree with its explanation, you may go to court. If the court finds the calculation wrong, the penalty applies.
Rule 4: Move-Out (30 and 45 Days)
After you move out, two clocks start:
Day 30: If the landlord wants to deduct for damage, it must deliver or mail to your last known address an itemized statement of the damage and the estimated or actual cost of each repair, with copies of paid receipts attached. If it gives estimates, it must send paid receipts, or a certification of actual costs if its own employees did the work, within 30 days after the estimate statement.
Day 45: The landlord must return the deposit, or the balance, plus required interest.
Allowed deductions are limited to unpaid rent not validly withheld, and a reasonable amount to repair damage caused by you or people under your control. Reasonable wear and tear is excluded.
Fire: if you end the lease under the RLTO's fire provision (§ 5-12-110(g)), the deadline shortens to seven days after you give notice of termination.
Rule 5: When the Building Changes Hands
If the building is sold or otherwise transferred, the successor landlord is liable for your deposit, including interest. Within 14 days of the transfer, the new landlord must notify you in writing that it holds your deposit, with its name, business address and its agent's business phone number.
The former landlord stays jointly liable until it transfers the deposit and notifies you in writing (within ten days of that transfer) of the new landlord's name, business address and phone number.
The Penalty: Two Times the Deposit
Section 5-12-080(f) says that if a landlord fails to comply with any of subsections (a) through (e), meaning the account, receipt, interest, move-out and transfer rules above, the tenant shall be awarded two times the security deposit plus interest. That doesn't prevent you from recovering other damages under the RLTO.
What went wrong | RLTO section | Consequence |
No signed receipt | 5-12-080(b) | Immediate return of deposit, plus possible penalty |
Bank not disclosed or not in Illinois | 5-12-080(a) | Two times the deposit plus interest |
Interest not paid within 30 days of lease year | 5-12-080(c) | Two times the deposit plus interest |
Interest paid but short | 5-12-080(f)(2) | Written notice first; landlord has 14 days to fix plus $50 |
No itemized statement with receipts in 30 days | 5-12-080(d) | Two times the deposit plus interest |
Deposit not returned in 45 days | 5-12-080(d) | Two times the deposit plus interest |
New owner gives no notice in 14 days | 5-12-080(e) | Two times the deposit plus interest |
The RLTO also has an attorney's fees section (§ 5-12-180). Ask a lawyer or legal aid how it applies to your case.
How to Claim Your Deposit, Step by Step
1. Gather your documents.
your lease, especially the page that names the bank,
the deposit receipt (or proof that you never got one),
proof of payment (check, bank record or transfer confirmation),
records of any interest payments or rent credits,
move-in and move-out photos or video, and
the date you moved out and returned keys.
2. Count the days. Mark day 30 and day 45 from your move-out date.
3. Send a written demand. List each violation by section number, the deposit amount, and what you are owed. Send it by a method that leaves a record, and keep a copy. If the only problem is a short interest payment, use the written-notice process in Rule 3 first.
4. Get free legal help. Cook County Legal Aid for Housing and Debt offers free legal help to Cook County residents with housing problems. A lawyer can tell you whether your building is covered and how to file.
5. File in court if needed. A deposit claim is a civil suit for money. A legal aid lawyer can help you with the right court and forms.
If the Landlord Says No
"Your building isn't covered." Ask whether the owner lives in the building and how many units it has. The exemption applies only to owner-occupied buildings of six units or fewer.
"The damage was more than the deposit." Ask for the itemized statement and paid receipts the RLTO requires within 30 days. Without them, the deductions are open to challenge.
"We sold the building, talk to the new owner." Both owners may be liable until the deposit is transferred and you're notified in writing.
More Help
More help in Chicago: Chicago financial help guides
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This guide gives general information, not legal advice. Talk to a lawyer or legal aid about your situation.
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