Urbana Security Deposit Rules: What the Landlord-Tenant Relationships Ordinance Adds to Illinois Law

A landlord in Urbana 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 Landlord-Tenant Relationships Ordinance (Urbana Code ch. 12.5). The state law sets the 45-day return deadline after termination of the tenancy; the local ordinance adds rules on interest on the deposit, return deadline and relocation assistance. Where the two overlap, the landlord has to meet the stricter one.

What the Landlord-Tenant Relationships Ordinance adds

• Interest on the deposit: Deposits of $100 or more held over six months earn interest at the passbook rate of the largest commercial bank headquartered in Champaign County, payable within 30 days after each 12-month rental period. (12.5-19)
• Return deadline: Landlord may withhold for damage only after delivering an itemized statement with receipts within 30 days; otherwise the full deposit is due within 45 days after move-out, with double damages for bad-faith refusal. (12.5-20)
• Relocation assistance: When the city declares a unit unlawful to occupy because of landlord-caused violations, the landlord must refund prepaid rent, unused rent and the deposit and pay moving, utility-reconnection and up to 14 days of hotel costs. (12.5-46 to 12.5-48)
• Other local rule: Landlord must give at least 30 days' written notice before non-renewing, terminating a month-to-month tenancy or changing lease terms on renewal; late fees capped at 5%. (12.5-11, 12.5-10(a)(7))

Who it covers: Rental of dwelling units in Urbana (Ord. 9394-58, eff. April 1, 1994), excluding (12.5-2) institutional residences, contract purchasers, fraternal/social organization housing, transient hotel/motel occupancy and employee occupancy. Relocation assistance (Art. IV, Ord. 2014-08-080) is a fixed-cost reimbursement scheme, not a flat dollar amount.
Worth knowing: Post-move-out painting and carpet cleaning cannot be charged against the deposit without damage beyond normal wear (12.5-20(d)). Late fees are capped at 5% of rent.

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 Urbana Code ch. 12.5, then return deadline and relocation assistance.
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 Urbana Code ch. 12.5 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 Urbana require interest on security deposits?
A: Yes. Deposits of $100 or more held over six months earn interest at the passbook rate of the largest commercial bank headquartered in Champaign County, payable within 30 days after each 12-month rental period.

Q: Is the Urbana deposit return deadline different from Illinois law?
A: Yes. Landlord may withhold for damage only after delivering an itemized statement with receipts within 30 days; otherwise the full deposit is due within 45 days after move-out, with double damages for bad-faith refusal. 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 Landlord-Tenant Relationships Ordinance apply to my unit?
A: Rental of dwelling units in Urbana (Ord. 9394-58, eff. April 1, 1994), excluding (12.5-2) institutional residences, contract purchasers, fraternal/social organization housing, transient hotel/motel occupancy and employee occupancy. Relocation assistance (Art. IV, Ord. 2014-08-080) is a fixed-cost reimbursement scheme, not a flat dollar amount. 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

• Urbana Code §§ 12.5-11, 12.5-19, 12.5-20, 12.5-46 to 12.5-48, Landlord-Tenant Relationships Ordinance: code text, 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 Urbana, 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.