A security deposit is a payment from a tenant held by a landlord. This is to make sure that the tenant pays rent on time. It is to make sure the tenant keeps the apartment or house in good condition. The landlord keeps the deposit until after the tenant moves out. The security deposit is the tenant's property until the tenancy is ended.

Local law may require the landlord to hold the security deposit in a separate bank account. This prevents the landlord from spending the security deposit.

The lease should explain the purpose of the security or damage deposit. It should say what it can be used for. There may not be a lease, or the lease may not explain what a deposit can be used for. If that is the case, then the landlord can use the deposit for:

• Unpaid rent
• Cleaning the apartment
• Repairing damages

Normal wear and tear damages cannot be taken out of the deposit.

If a written lease has specified costs for cleaning, repair, or replacement of a component of the property the costs must be for damage beyond normal wear and tear.

How much can a security deposit be?

Generally, there are no limits on how much a landlord can charge as a security deposit. Landlords usually charge one or two months' rent. But, there are some exceptions:

• Subsidized or public housing: Landlords may only charge a deposit similar to deposits being charged by private landlords in the area.
• Mobile home parks:  Landlords cannot charge more than one month's rent. This applies if the landlord rents 5 or more trailers.
• In Suburban Cook County: landlords cannot charge more than one and a half month's rent.
• In Oak Park: landlords cannot charge more than one and a half month's rent.

Note: Sometimes landlord's charge a move-in fee instead of a security deposit. A move-in fee is not a security deposit and does not have the same protections as a security deposit. A move-in fee is usually non-refundable. However, if the move-in fee is a large amount, similar to the amount of 1x or 2x the monthly rent, then it might be considered a security deposit.

Is it OK for a tenant to not pay their last month's rent since the landlord has a security deposit?

No. A security deposit does not take the place of rent. It does not matter that landlords keep the security deposit if a tenant leaves the apartment owing rent. The landlord can serve a demand for rent and then sue for eviction. Then, the tenant may have to move out before the end of the month.

If the landlord and tenant agree to use the security deposit to cover rent, this agreement should be in writing.

A written statement of damages

Sometimes a lease or a local law requires a landlord must provide a written statement of damages before taking money out of a security deposit.  In Chicago, the landlord must give the tenant a written statement of damages within 30 days after the tenant moves out unless it is an owner-occupied building with 6 units or less. The law in most of the rest of Illinois is as follows. In suburban Cook County, the landlord must give the tenant a written statement of damages within 30 days after the tenant moves out. The law in most of the rest of Illinois is as follows.

• Landlords of buildings with 4 or fewer apartments do not have to give tenants written statements of damages. The exception is if they are required to in the lease.  If the lease requires the landlord to give the tenant a written statement, the landlord must describe in writing any damages to the property that they want to pay for out of the security deposit. The lease should state when the landlord must give the tenant this statement and what information needs to be included on it.
• Landlords of building with 5 or more apartments must give tenants a written statement describing any damage to the property if they want to deduct repair costs from the security deposit. The landlord must deliver the written statement to the tenant within 30 days after they move out. The landlord must list the actual or estimated cost of repair and give receipts for repairs unless the price was listed in the lease. The landlord does not have to send the tenant a statement if they kept the security deposit because the tenant owed rent. 
  • Starting January 1, 2024, landlords of residential buildings must give tenants a written statement describing any damage to the property if they want to deduct repair costs from the security deposit. The landlord must deliver the written statement to the tenant within 30 days after they move out or within 30 days of the date when the tenant's right of possession ends, whichever is later.

Current mailing address or email

The tenant must give the landlord a current mailing address or email. This way the landlord can send them the written statement. If not, the landlord is not responsible for not providing the receipts or returning the security deposit.

Landlord unable to show receipts

If the landlord can't show receipts for the damages, they must still provide a list of the costs. They must provide any other evidence they have to show what they paid for repairs. They must explain why they cannot produce the receipts. 

When is a security deposit returned?

Sometimes there are time limits for when a landlord must return a security deposit. In Chicago, the landlord must return the security deposit within 45 days after the tenant moves out unless it is an owner-occupied building with 6 units or less. If the tenant moved out because of a fire, the landlord must return the security deposit within 7 days. The law in most of the rest of Illinois is as follows. In suburban Cook County, the landlord must return the security deposit within 30 days after the tenant moves out. The law in most of the rest of Illinois is as follows.

• 4 units or less: There are no specific rules. 
• 5 or more units: The landlord must return the security deposit within 45 days after the tenants move out. 

If your landlord has not returned your security deposit, here is a security deposit demand letter you can use.