Chicago Security Deposit Rules: What the Residential Landlord and Tenant Ordinance (RLTO) Adds to Illinois Law

A landlord in Chicago has to satisfy two sets of rules at once: the Illinois statute, 765 ILCS 710/1 (Security Deposit Return Act), and the city's own Residential Landlord and Tenant Ordinance (RLTO) (Chicago Mun. Code ch. 5-12). The state law sets the 45-day return deadline after termination of the tenancy; the local ordinance adds rules on interest on the deposit, receipt and itemization, return deadline and rent-increase notice. Where the two overlap, the landlord has to meet the stricter one.

What the Residential Landlord and Tenant Ordinance (RLTO) adds

• Interest on the deposit: Landlords must pay interest yearly on security deposits and prepaid rent held more than six months, at the rate the City Comptroller announces each January. (5-12-080(c), 5-12-081)
• Receipt and itemization: A written receipt showing amount, recipient name, date and unit description must be given when a deposit is taken. (5-12-080(b))
• Return deadline: Landlord must send an itemized damage statement within 30 days and return the deposit plus interest within 45 days after the tenant vacates (7 days if the unit is destroyed by fire). (5-12-080(d), 5-12-110(g))
• Rent-increase notice: Fair Notice Ordinance requires 30/60/120 days written notice of a rent increase or non-renewal depending on whether the tenancy is under 6 months, 6 months to 3 years, or over 3 years. (5-12-130(j))

Who it covers: All residential rental units in Chicago except (5-12-020): owner-occupied buildings of six or fewer units, hotel/motel/rooming-house stays under 32 days, dormitories, hospitals/shelters, owner-occupied co-ops/condos, and employee housing. The Fair Notice Ordinance (2020) applies to all residential units.
Worth knowing: A landlord who breaks the deposit rules owes two times the deposit plus interest. The city introduced a further renter-protection ordinance in June 2026; check the code for amendments before relying on this summary.

What Illinois law already requires

• Return deadline: 45 days after termination of the tenancy.
• Detail: For landlords with five or more units: an itemized statement within 30 days and the refund within 45 days. Chicago's RLTO has its own 45-day rule and double-deposit penalty.
• Itemized deductions: required in writing.
• Forwarding address: not a statutory condition of getting the deposit back.
• Penalty for wrongful withholding: Bad-faith failure to return or itemize exposes the landlord to twice the security deposit plus attorney's fees.
• Interest: Landlords with 25 or more units must pay interest on deposits held more than six months (765 ILCS 715).
• Small claims limit: $10,000.
• Statute: 765 ILCS 710/1 (Security Deposit Return Act).

Using both rules together

1. Read the lease for the deposit amount, the move-in date, and any clause that mentions the ordinance.
2. Check the local rule first: interest on the deposit under Chicago Mun. Code ch. 5-12, then receipt and itemization, return deadline and rent-increase notice.
3. Count the Illinois deadline of 45 days from termination of the tenancy.
4. A written demand that cites both 765 ILCS 710/1 (Security Deposit Return Act) and Chicago Mun. Code ch. 5-12 carries more weight than one that cites either alone. Bad-faith failure to return or itemize exposes the landlord to twice the security deposit plus attorney's fees.

Frequently Asked Questions

Q: Does Chicago require interest on security deposits?
A: Yes. Landlords must pay interest yearly on security deposits and prepaid rent held more than six months, at the rate the City Comptroller announces each January. The city-set rate for deposits held during 2026 is 0.01%.

Q: Is the Chicago deposit return deadline different from Illinois law?
A: Yes. Landlord must send an itemized damage statement within 30 days and return the deposit plus interest within 45 days after the tenant vacates (7 days if the unit is destroyed by fire). Where the local rule is stricter than 765 ILCS 710/1 (Security Deposit Return Act), the stricter one is the one a landlord has to meet.

Q: Does the Residential Landlord and Tenant Ordinance (RLTO) apply to my unit?
A: All residential rental units in Chicago except (5-12-020): owner-occupied buildings of six or fewer units, hotel/motel/rooming-house stays under 32 days, dormitories, hospitals/shelters, owner-occupied co-ops/condos, and employee housing. The Fair Notice Ordinance (2020) applies to all residential units. Check the section cited below for the full list of exemptions before relying on it.

Q: Can I sue my landlord in small claims court for my Illinois deposit?
A: Yes. Illinois small claims court hears claims up to $10,000, which covers most deposits plus the statutory penalty. A dated written demand that cites 765 ILCS 710/1 (Security Deposit Return Act) is the usual first exhibit.

Sources Checked

• Chicago Mun. Code ch. 5-12, §§ 5-12-080, 5-12-081, 5-12-082, 5-12-110(g), 5-12-130(j), Residential Landlord and Tenant Ordinance (RLTO): official page, read 2026-09-20
• 765 ILCS 710/1 (Security Deposit Return Act) (the Illinois statute cited above)
• LeaseLenses Illinois deposit data set, last reviewed 2026-09-19; the same data powers the Illinois demand letter tool
• Illinois landlord-tenant overview and the Illinois deposit rules page

This page is general legal information for Chicago, Illinois, not legal advice. Local ordinances are amended more often than state statutes; read the current code text before relying on a figure in court.