Chicago (RLTO) Security Deposit - When the Landlord Needs to Give Interest?
If a tenant lives in Chicago and the Chicago Residential Landlord Tenant Ordinance (RLTO) applies, the landlord needs to follow certain rules when the tenant pays a security deposit.
When does a tenant's security deposit start to earn interest?
After a tenant pays a security deposit, the landlord must pay interest to the tenant after the tenant has lived at the property for more than six months. The landlord must pay the tenant any interest within 30 days after the end of each 12-month period. The interest can be paid by cash or credit applied to the rent due.
How much interest does the landlord need to pay?
It depends on the year and the rate that the City of Chicago sets. The rate of interest on security deposits under leases from January 1 through December 31, 2022 is 0.01%. For a full list of the interest rates, visit the City of Chicago's website here.
| For examples of how to calculate interest, click here. |
What happens if the landlord didn't give interest?
- If the landlord did not give interest or did not give enough interest, the tenant needs to give written notice (email, certified mail, or mail) to the landlord that the interest was deficient.
- If the landlord doesn't give the correct amount + $50.00 OR does not provide a written explanation of how interest was calculated, then the tenant may go to court.
- In court, a tenant may be entitled to damages (twice the security deposit + attorney's fees) when the landlord did not give the correct interest.
The tenant has two years to sue the landlord for the violation. The 2-year countdown starts on the day that the violation happens.
The above article provides information about legal issues but is not the same as legal advice. Legal advice is when a lawyer applies the law to your specific situation. The information in this article does not replace the advice or representation of a licensed attorney. Law Center for Better Housing cannot guarantee the accuracy or completeness of the information in this article and is not responsible for any consequences that may result from using it. You should consult with a licensed attorney to ensure the information in this article is appropriate for your specific situation. Using the information in this article does not create a relationship between Law Center for Better Housing and you as your attorney.