Chicago / Housing guide
Tracking Deposit Interest and Notice Periods Across a Chicago Portfolio
Homzora editorial team · Updated September 14, 2026
A single Chicago rental is a set of dates. A portfolio is those same dates multiplied, staggered across different anniversaries, with a rate that changes every January and notice tiers that depend on how long each tenant has been there.
Nothing about it is difficult individually. All of it is a reconciliation problem at scale, and that is where the exposure sits.
Why the interest obligation is harder than it looks
A deposit held more than six months earns interest annually, at the rate the City Comptroller sets each January. For 2026 that is 0.01 percent, which on a two thousand dollar deposit is twenty cents.
Interest is due within thirty days of the end of each twelve month rental period. Not at year end, not on a common date. Thirty days after each individual tenancy anniversary.
Across forty units that is forty separate anniversaries scattered through the year, each with its own thirty day window, each requiring a payment or a rent credit and a record that it happened.
The amounts are trivial. Twenty cents a unit is eight dollars across the whole portfolio. The penalty for missing one is twice that unit deposit plus attorney fees.
The January rate change
The Comptroller announces the new rate on the first business day of each year, calculated from the average of savings, insured money market and six month certificate of deposit rates at the commercial bank with the most Chicago branches.
Two things follow. The interest calculation changes for anniversaries falling after the announcement. And the Security Deposit Interest Rate Summary attached to every lease and renewal has to be reissued with the updated figure.
The rate has been 0.01 percent every year since 2015, which makes it easy to assume it always will be. It was 1.71 percent in 2006 and 5 percent before July 1997. A portfolio that has never had to recalculate is a portfolio that has not yet been tested.
Notice tiers calculated per tenant
Chicago Fair Notice scales to tenancy length: thirty days under six months, sixty days from six months to three years, one hundred and twenty days beyond three years.
The tier depends on total time in the unit rather than the current lease term. Two years on a written lease followed by fourteen months month to month is a tenancy of three years and two months, and falls in the one hundred and twenty day tier.
So serving notice correctly requires knowing each tenant original move in date, not just their current lease. In a portfolio acquired from someone else, that information may not have come with the building.
And a short notice does not become valid when the stated period expires. It restarts from the date of actual service at the correct length.
Move out runs on two clocks
Every departure starts two deadlines at once, and they run at different speeds.
The itemized statement of damages must reach the tenant within thirty days of the date they vacate. The deposit and any interest owed must be returned within forty five days.
Working to the forty five day figure is the common error, because the deduction has already failed by then if no itemization went out at thirty.
Across a portfolio with turnover, that is two overlapping clocks per departure, running simultaneously with the interest anniversaries of every other unit.
Which buildings are in scope
The ordinance covers most rental housing in Chicago, with the principal exception of an owner occupied building of six units or fewer.
A mixed portfolio may therefore contain buildings under different rules. And Fair Notice applies even to the exempt buildings, so scope is not uniform even within a single exception.
Anything outside the city limits is a separate question again, since Cook County and Evanston run their own ordinances. Cook County requires sixty days notice for non renewal and caps late fees at ten dollars for the first thousand dollars of monthly rent plus five percent above that.
This is a ledger problem before it is a legal one
Everything above is arithmetic tied to dates. Interest calculated per unit at a rate that changes annually, due thirty days after each individual anniversary. Two overlapping clocks on every departure. Notice tiers derived from original move in dates rather than current leases. Rentec Direct has been operating since 2007 and is built around a general ledger accounting system with property management wrapped around it, aimed at portfolios of roughly ten units upward including managers who need trust accounting. If the difficulty is reconciling figures and dates rather than storing documents, that is the distinction worth weighing.
Homzora earns a commission if you subscribe through this link, at no cost to you. No software determines whether a building falls under the ordinance, and none substitutes for legal advice.
What a system cannot decide for you
Two things worth establishing yourself rather than assuming any tool will handle.
Whether each building is covered. That turns on owner occupancy and unit count, and on whether the property sits inside the city limits. It is a question of fact about the building.
Each tenant original move in date. Without it the notice tier cannot be calculated correctly, and it is the piece most often missing when a building changes hands.
Both are worth settling on acquisition rather than discovering during a dispute.
An operating checklist
- Record every tenant original move in date, separately from their current lease dates.
- Diary each tenancy anniversary and the thirty day interest window after it.
- Diary the first business day of January for the new rate, and reissue every rate summary addendum.
- On every departure, set two reminders: day thirty for the itemization, day forty five for the balance.
- Establish ordinance coverage per building, not per portfolio.
- Check whether any property sits outside the city limits and therefore under a different ordinance.
The short version
Interest at 0.01 percent, due within thirty days of each individual tenancy anniversary, at a rate reset every January. Itemization within thirty days of a departure and the balance within forty five. Notice at thirty, sixty or one hundred and twenty days calculated from total occupancy.
Twice the deposit plus attorney fees for a violation, and the violations are missed dates rather than bad faith.
The full ordinance reference and the interest rate history back to 2005 are free to download at our Chicago datasets.
Not legal advice. This page summarizes published provisions of the Chicago Residential Landlord and Tenant Ordinance and Illinois law as of September 2026, and does not evaluate any particular tenancy or portfolio. Cook County and Evanston operate separate ordinances with different requirements. Consult an attorney before relying on any of it.