Tenants ask me all the time about the return of their security deposit. The State of Illinois has a security deposit statute and so do several individual cities. In Chicago, most units that are not owner-occupied (the landlord lives in the building), or are owner-occupied and are in a building containing eight or more units are covered under the Chicago Residential Landlord Tenant Ordinance. Most ordinances have very specific rules for the handling of security deposits and contain stiff penalties for non-compliant landlords.

Your landlord has to keep your security deposit in an interest-bearing account that does not contain the funds of the landlord and disclose the name of the financial institution wherein the security deposit is kept on the face of the lease.
Your landlord is to pay you yearly interest on your security deposit and attach the current interest rate to your lease.
When you are moving out:
1. Do not use your security deposit as rent. This is regularly done in practice in landlord/tenant relationships, but is legally improper. You are not allowed to “live out” your deposit.
2. Make sure you take pictures when you leave. If your landlord tries to withhold your security deposit for damages to your apartment, you need to have proof if you are going to successfully argue otherwise.
3. There are several relevant statutes covering the return of a security deposit. Illinois has its own and many individual municipalities have an ordinance as well. Below are the Illinois statute, Section 5-12-080 of the RLTO, and The Evanston Ordinance.
  1. The Illinois Security Deposit Return Act
    (765 ILCS 710/1) (from Ch. 80, par. 101)
    Sec. 1. A lessor of residential real property, containing 5 or more units, who has received a security deposit from a lessee to secure the payment of rent or to compensate for damage to the leased property may not withhold any part of that deposit as compensation for property damage unless he has, within 30 days of the date that the lessee vacated the premises, furnished to the lessee, delivered in person, by mail directed to his last known address, or by electronic mail to a verified electronic mail address provided by the lessee, an itemized statement of the damage allegedly caused to the premises and the estimated or actual cost for repairing or replacing each item on that statement, attaching the paid receipts, or copies thereof, for the repair or replacement. If the lessor utilizes his or her own labor to repair any damage caused by the lessee, the lessor may include the reasonable cost of his or her labor to repair such damage. If estimated cost is given, the lessor shall furnish the lessee with paid receipts, or copies thereof, within 30 days from the date the statement showing estimated cost was furnished to the lessee, as required by this Section. If no such statement and receipts, or copies thereof, are furnished to the lessee as required by this Section, the lessor shall return the security deposit in full within 45 days of the date that the lessee vacated the premises.
    Upon a finding by a circuit court that a lessor has refused to supply the itemized statement required by this Section, or has supplied such statement in bad faith, and has failed or refused to return the amount of the security deposit due within the time limits provided, the lessor shall be liable for an amount equal to twice the amount of the security deposit due, together with court costs and reasonable attorney’s fees.
  2. The Chicago Residential Landlord Tenant Ordinance
    (d) The landlord shall, within 45 days after the date that the tenant vacates the dwelling unit or within 7 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.
    …
    (f)(1) Subject to subsection (f)(2), if the landlord fails to comply with any provision of Section 5-12-080 (a) — (e), the tenant shall be awarded damages in an amount equal to two times the security deposit plus interest at a rate determined in accordance with Section 5-12-081. This subsection does not preclude the tenant from recovering other damages to which he may be entitled under this chapter.
  3. There is also an Ordinance for the City of Evanston: (Ord. No. 81-0-02)
    (C) Upon termination of the tenancy, property or money held by the landlont of accrued rent and thrd as security or prepaid rent
    may be applied to the paymee amount of damages which the landlord has suffered by reason of the tenant’s noncompliance with Subsection 4-1 of this chapter, all as itemized by the landlord in a written notice delivered to the tenant together with the amount due twenty one
    (21) days after tenant has vacated his/her unit. Any security or prepaid rent not so applied, and any interest on such security due to the tenant, shall be paid to the tenant within twenty one (21) days
    after tenant has vacated his/her unit. In the event the rental agreement terminates pursuant to subsection 5-3-7-4(A)1 of this chapter regarding landlord’s wrongful failure to supply essential
    services, the obligations imposed on the landlord pursuant to this subsection (C) shall be performed within forty eight (48) hours after the expiration of the seven (7) day written notice to the landlord to
    restore service.

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