Chicago has one of the most detailed tenant ordinances in the country, and its security deposit rules are a big part of it. The Chicago Residential Landlord and Tenant Ordinance, usually called the RLTO, tells landlords where to keep your deposit, when to tell you about it, how much interest to pay, and exactly when to return it. Landlords who get it wrong can owe twice the deposit plus interest.
Those rules matter in a city where most homes are rented. The Census Bureau’s QuickFacts puts Chicago’s owner occupied housing rate at 46.0 percent for 2020 to 2024, which means about 54 percent of occupied homes are rented, and the median gross rent was $1,440 a month (U.S. Census Bureau QuickFacts, Chicago).
Homzora is a housing research publisher, not a law firm. This article explains Chicago and Illinois rules in plain English and is not legal advice for your situation.
Quick answers
- Itemized statement: within 30 days after you vacate (RLTO Summary).
- Refund: within 45 days, with interest.
- Penalty: two times the deposit plus interest for noncompliance.
- 2026 interest rate: 0.01 percent.
Does the RLTO cover your apartment?
The RLTO covers most Chicago rentals, but not all. According to the City’s official RLTO summary, it does not cover units in owner occupied buildings with six or fewer units, owner occupied co ops and condominiums, hotels and motels (with exceptions for monthly rent and stays over 32 continuous days), school dormitories, hospitals, shelters, and employee housing (City of Chicago, RLTO Summary). If your landlord lives in your three flat, for example, the RLTO deposit rules may not apply, and you would look to Illinois state law instead.
The RLTO deposit rules, step by step
At move in
- Receipt: the landlord must give you a receipt for the deposit; an electronic receipt is allowed for electronic payments.
- Separate account: the deposit must be held in a federally insured, interest bearing account at an Illinois financial institution and may not be commingled with the landlord’s assets.
- Disclosure: within 14 days of receiving the deposit, the landlord must tell you in writing which institution holds it.
Each of these requirements appears in the City’s RLTO summary of Chapter 5-12-080 (City of Chicago, RLTO Summary).
During the tenancy: interest
Landlords must pay interest each year on deposits held more than six months, at a rate set by the City Comptroller (City of Chicago, RLTO Summary). For deposits received in 2026, the rate is 0.01 percent, according to the Chicagoland Apartment Association (Chicagoland Apartment Association). The amount is small at that rate, but failure to pay it is still a violation.
At move out
| Deadline | What the landlord must do |
|---|---|
| Within 30 days after you vacate | Give you an itemized statement of damages, with estimated or actual repair costs and copies of paid receipts |
| Within 45 days after you vacate | Return the deposit and required interest, minus unpaid rent and properly itemized damage costs |
| After a fire | Return the deposit within seven days of the tenant’s termination notice |
These deadlines come from the City’s summary of the RLTO (City of Chicago, RLTO Summary).
The penalty: twice the deposit plus interest
If a landlord fails to comply with the RLTO’s deposit requirements, the tenant may recover two times the security deposit plus interest (City of Chicago, RLTO Summary). On a deposit equal to Chicago’s median gross rent of $1,440, that is $2,880 plus interest. Because the penalty applies to failures to comply with the requirements, not only to bad faith, landlords who skip the receipt, the bank disclosure, or the deadlines can face it.
What landlords may deduct
The RLTO allows the landlord to keep amounts for unpaid rent and for damage expenses, supported by the itemized statement and receipts (City of Chicago, RLTO Summary). Every damage deduction must be backed by the itemized statement and copies of paid receipts or estimates, so ask to see them for any charge you question. Document the condition of the unit carefully at move in and move out.
A Chicago deposit checklist
- Get a receipt when you pay the deposit.
- Within 14 days, look for the written notice of where the deposit is held.
- Each year, check that interest was paid if the deposit has been held more than six months.
- Photograph the unit at move in and move out.
- Give a forwarding address in writing.
- Day 30: expect the itemized statement with receipts if anything is being deducted.
- Day 45: expect the balance and interest.
A sample demand letter
Date: 2026. To: [landlord]. Re: Security deposit for [address, unit]. I vacated on 2026. Under the Chicago Residential Landlord and Tenant Ordinance, Section 5-12-080, you were required to [provide an itemized statement with receipts within 30 days] [return my deposit and interest within 45 days] [disclose the institution holding my deposit within 14 days of receipt]. This did not happen. The RLTO allows a tenant to recover two times the security deposit plus interest when a landlord fails to comply. Please send [amount] to [address] by 2026. Sincerely, [name].
Getting help
The City’s Department of Housing publishes the RLTO summary and tenant resources (City of Chicago, RLTO Summary). Illinois Legal Aid Online offers free information and forms for Illinois renters (Illinois Legal Aid Online).
Build your evidence file
Disputes with landlords are usually decided by documents, not memories. Keep these together from the day you sign:
- The signed lease, every addendum, and every renewal.
- Receipts or bank records for the deposit and each rent payment.
- Dated photos and video of every room at move in and move out.
- Copies of every repair request and the landlord’s replies.
- Every notice you send or receive, with proof of delivery.
Store copies somewhere other than your phone, such as an email to yourself, so they survive a lost device.
Before you sign your next lease
- Ask who owns the building and who manages it, and get contact details in writing.
- Read the clauses on early termination, subletting, renewal, and notice before you sign, not after a problem arises.
- Confirm the deposit amount, where it will be held, and how it will be returned.
- Walk through the unit with the landlord, note existing damage in writing, and keep a signed copy.
- Ask whether the unit is covered by any local rent rules, so you know how much the rent can change if you stay.
Chicago at a glance
Chicago has about 1.16 million households, averaging 2.29 people each, and a median household income of $77,902 over 2020 to 2024 (U.S. Census Bureau QuickFacts, Chicago). The RLTO’s owner occupied exclusion matters here: in a building of six or fewer units where the owner lives, the RLTO deposit rules may not apply (City of Chicago, RLTO Summary). Ask your landlord at lease signing whether they live in the building.
Key terms
- RLTO: the Chicago Residential Landlord and Tenant Ordinance, Chapter 5-12 of the Municipal Code (City of Chicago, RLTO Summary).
- Itemized statement: the list of damages with repair costs and receipts, due within 30 days after you vacate.
- Interest rate: the annual rate set by the City Comptroller for deposits held more than six months.
- Two times the deposit: the amount a tenant may recover, plus interest, when a landlord fails to comply with the deposit rules.
Frequently asked questions
Is there a cap on how much deposit a Chicago landlord can charge?
The City’s RLTO summary does not state a maximum deposit amount (City of Chicago, RLTO Summary). The rules focus on how the deposit is held, disclosed, and returned.
My landlord lives in my two flat. Do the RLTO rules apply?
Owner occupied buildings with six or fewer units are excluded from the RLTO (City of Chicago, RLTO Summary). Illinois state law may still provide protections; Illinois Legal Aid Online explains them (Illinois Legal Aid Online).
The interest is only a few cents. Does it matter?
The interest rate for 2026 is 0.01 percent (Chicagoland Apartment Association), so the dollar amount is tiny. But the RLTO’s penalty applies to failures to comply with its requirements (City of Chicago, RLTO Summary), so the obligation still matters.
My landlord never told me which bank holds my deposit. Does that matter?
Yes. The RLTO requires written disclosure of the institution within 14 days of receiving the deposit, and the penalty for failing to comply with the deposit requirements is two times the deposit plus interest (RLTO Summary).
What if my building had a fire?
After a fire, the RLTO summary says the deposit must be returned within seven days of the tenant’s termination notice (RLTO Summary).
How much notice must my landlord give before entering for a move out inspection?
The RLTO summary says tenants must permit access on two days’ notice for repairs, services, and necessary inspections, with no notice required in emergencies (RLTO Summary).
Sources
- City of Chicago Department of Housing, Residential Landlord and Tenant Ordinance Summary
- Chicagoland Apartment Association, 2026 Illinois and Chicago security deposit interest rates
- U.S. Census Bureau QuickFacts, Chicago
- Illinois Legal Aid Online