The security deposit interest section of The Chicago Residential Landlord Tenant Ordinance (RLTO) has been interpreted by the Illinois Supreme Court to impose strict-liability upon violator landlords.  Other sections of the RLTO have also been interpreted by Illinois courts in decisions mostly favorable to renters.

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SECTION

5-12-010
5-12-020
5-12-030
5-12-040
5-12-050
5-12-060
5-12-070
5-12-080
5-12-081
5-12-082
5-12-090
5-12-100
5-12-110
5-12-120
5-12-130
5-12-140
5-12-150
5-12-160
5-12-170
5-12-180
5-12-190
5-12-200

   RATES

 TITLE

Title, Purpose and scope
Exclusions
Definitions
Tenant Responsibilities
Landlord's Right of Access
Remedies for Improper Denial of Access
Landlord's Responsibility to Maintain
Security Deposits
Interest Rate on Security Deposits
Interest Rate Notification
Identification of Owner and Agents
Notice of Conditions Affecting Habitability
Tenant Remedies
Subleases
Landlord Remedies
Rental Agreement
Prohibition on Retaliatory Conduct by Landlord
Prohibition on Interruption of Tenant Occupancy by Landlord
Summary of Ordinance Attached to Rental Agreement
Attorney's Fees
Rights and Remedies Under Other Laws
Severability

Chicago's Security Deposit Interest Rates

5-12-080  Security Deposits

(a)     A landlord shall hold all security deposits received by him in a federally insured interest-bearing account in a bank, savings and loan association or other financial institution located in the State of Illinois. A security deposit and interest due thereon shall continue to be the property of the tenant making such deposit, shall not be commingled with the assets of the landlord, and shall not be subject to the claims of any creditor of the landlord or of the landlord's successors in interest, including a foreclosing mortgagee or trustee in bankruptcy.

(b)     Any landlord or landlord's agent who receives a security deposit from a tenant or prospective tenant shall give said tenant or prospective tenant at the time of receiving such security deposit a receipt indicating the amount of such security deposit, the name of the person receiving it and, in the case of the agent, the name of the landlord for whom such security deposit is received, the date on which it is received, and a description of the dwelling unit. The receipt shall be signed by the person receiving the security deposit. Failure to comply with this subsection shall entitle the tenant to immediate return of security deposit.

(c)     A landlord who holds a security deposit or prepaid rent pursuant to this section for more than six months shall pay interest to the tenant accruing from the beginning date of the rental term specified in the rental agreement at the rate determined in accordance with Section 5-12-081. The landlord shall, within 30 days after the end of each 12-month rental period, pay to the tenant any interest, by cash or credit to be applied to the rent due.

(d)     The landlord shall, within 45 days after the date that the tenant vacates the dwelling unit or within seven days after the date that the tenant provides notice of termination of the rental agreement pursuant to Section 5-12-110(g), return to the tenant the security deposit or any balance thereof and the required interest thereon; provided, however, that the landlord may deduct from such security deposit or interest due thereon for the following:

(1)     Any unpaid rent which has not been validly withheld or deducted pursuant to state or federal law or local ordinance; and

(2)     A reasonable amount necessary to repair any damage caused to the premises by the tenant or any person under the tenant's control or on the premises with the tenant's consent, reasonable wear and tear excluded. In case of such damage, the landlord shall deliver or mail to the last known address of the tenant within 30 days an itemized statement of the damages allegedly caused to the premises and the estimated or actual cost for repairing or replacing each item on that statement, attaching copies of the paid receipts for the repair or replacement. If estimated cost is given, the landlord shall furnish the tenant with copies of paid receipts or a certification of actual costs of repairs of damage if the work was performed by the landlord's employees within 30 days from the date the statement showing estimated cost was furnished to the tenant.

(e)     In the event of a sale, lease, transfer or other direct or indirect disposition of residential real property, other than to the holder of a lien interest in such property, by a landlord who has received a security deposit or prepaid rent from a tenant, the successor landlord of such property shall be liable to that tenant for any security deposit, including statutory interest, or prepaid rent which the tenant has paid to the transferor.

The successor landlord shall, within ten days from the date of such transfer, notify the tenant who made such security deposit by delivering or mailing to the tenant's last known address that such security deposit was transferred to the successor landlord and that the successor landlord is holding said security deposit. Such notice shall also contain the successor landlord's name, business address, and business telephone number of the successor landlord's agent, if any. The notice shall be in writing.

The transferor shall remain jointly and severally liable with the successor landlord to the tenant for such security deposit or prepaid rent, unless and until such transferor transfers said security deposit or prepaid rent to the successor landlord and provides notice, in writing, to the tenant of such transfer of said security deposit or prepaid rent, specifying the name, business address and business telephone number of the successor landlord or his agent within ten days of said transfer.