Illinois Security Deposit Law Less Than 5 Units

If you’re searching for information about Illinois security deposit law for buildings with less than 5 units, you’re not alone. For years, tenants in small buildings were often left unprotected under Illinois law. Until recently, the Illinois Security Deposit Return Act only applied to buildings with five or more units owned by the same landlord. That meant thousands of renters across the state had to rely on vague lease terms or pursue difficult breach-of-contract claims when their deposits were withheld unfairly.

That changed on January 1, 2024. Thanks to a major amendment to the Security Deposit Return Act, all residential tenants in Illinois – regardless of building size – now have legal protection when it comes to security deposit disputes. This update gives renters in small buildings new leverage to recover deposits wrongfully withheld by landlords.

But there’s still a catch: the laws governing deposits can vary widely depending on where you live, when you moved out, and what your lease says. This article explains how the new law works, how it interacts with local ordinances, and what to do if your landlord hasn’t returned your deposit.

Why Unit Count Used to Matter

Before 2024, whether or not you were protected by Illinois security deposit law often came down to a single question: did your landlord own at least five units in your building? If the answer was no, the Illinois Security Deposit Return Act did not apply. That law only covered buildings with five or more residential units owned by the same landlord. This left many tenants – especially those renting in smaller buildings or condos – without the protections they assumed they had.

If you weren’t covered by the Act, you couldn’t rely on the law’s basic guarantees, such as a requirement for landlords to send an itemized list of damages within 30 days, return the deposit within 45 days, or provide paid receipts for deductions. More importantly, you couldn’t claim the Act’s penalty of two times the amount wrongfully withheld or recover attorney’s fees.

Tenants in smaller buildings often had to fall back on breach of contract law, which meant that their rights depended entirely on the wording of their lease. This made the outcome of security deposit disputes much less predictable – and far more difficult to enforce in court.

The 2024 Update: Illinois Law Now Covers All Residential Units

As of January 1, 2024, the Illinois Security Deposit Return Act applies to every residential rental unit in the state – regardless of how many units are in the building or how many the landlord owns. This is a major shift from prior law and brings long-overdue protections to tenants in small buildings, single-family homes, and condo rentals.

Under the updated law, landlords who collect a security deposit must follow strict procedures if they intend to keep any portion of it for property damage. The key requirements are:

• Within 30 days after the tenant moves out, the landlord must provide an itemized statement of damages and the cost to repair or replace each item.
• If the landlord uses estimated costs, they have an additional 30 days to provide paid receipts or other documentation.
• The landlord can only deduct for unpaid rent or property damage beyond ordinary wear and tear.
• If no rent is due and the landlord does not follow the law’s requirements, they must return the full deposit within 45 days of move-out.

If a landlord fails to comply, the tenant may sue for twice the amount of the deposit that was wrongfully withheld, plus court costs and reasonable attorney’s fees.

It is important to note that the revised law only applies to tenants who moved out on or after January 1, 2024. If you moved out before that date and your landlord did not own five or more units in your building, you are likely still limited to local law or a breach of contract claim based on the terms of your lease.

Local Ordinances Still Apply and May Offer Better Protection

Even though the updated Illinois Security Deposit Return Act now covers all residential units, tenants should not assume that it is the only law that applies. Many cities and counties in Illinois have their own landlord-tenant ordinances that offer even stronger protections than state law. If you live in one of these areas and your unit is covered, the local ordinance will usually take priority and offer the most effective legal remedy.

For example:

• Chicago: The Residential Landlord and Tenant Ordinance applies to nearly all rental units in the city. It requires landlords to hold deposits in interest-bearing accounts, pay annual interest to tenants, and follow strict rules when making deductions. Violations can result in penalties of two times the deposit, return of the deposit, and attorney fees.
• Cook County: The Cook County Residential Tenant and Landlord Ordinance (CCRTLO) applies to most rental units outside Chicago but within county limits. Like the Chicago law, it sets clear rules for handling, deducting, and returning deposits.
• Evanston: Evanston’s ordinance sets a shorter timeline – just 21 days – for landlords to return a deposit or send an itemized list of damages.
• Urbana and DeKalb: These cities have their own rules that closely mirror the state law, but apply to all units regardless of size.
• Oak Park: Oak Park has a local ordinance that is very similar to the Cook County RTLO.

If you live in one of these areas, check whether your building is covered by the local ordinance. Some laws, like those in Chicago and Cook County, exempt smaller owner-occupied buildings. Still, if your unit is covered, the local ordinance will often offer clearer procedures, stronger penalties, and better access to attorney fee awards than the state law.

What Happens if You’re Still Not Covered (e.g., Pre-2024 Move-Outs)

If you moved out before January 1, 2024, and your landlord owned fewer than five units in your building, the revised Illinois Security Deposit Return Act likely does not apply. In these cases, your legal rights depend primarily on the terms of your lease and whether any local ordinances offer protection.

Start by checking whether your municipality has a landlord-tenant ordinance. Cities like Chicago, Evanston, Urbana, and DeKalb – as well as Cook County – enacted local rules before the state law was expanded. If your unit falls within the coverage of one of these ordinances, those rules may still apply, even for pre-2024 move-outs.

If no local law applies, your only option is a breach of contract claim based on your lease. Most leases include a section explaining when a deposit will be returned and what deductions are permitted. Common clauses allow deductions for unpaid rent or damage beyond ordinary wear and tear. But many leases also contain vague or overly broad provisions that can make it harder to challenge improper deductions.

If your lease does not specify a timeline for returning the deposit, Illinois courts typically consider 45 days to be a reasonable period. And while breach of contract claims do not include automatic penalties or fee awards, you may be able to recover attorney’s fees if your lease includes a clause awarding fees to the prevailing party. That said, this can be risky. Some leases are one-sided and require the tenant to pay the landlord’s fees regardless of who wins. Others allow fee recovery for both sides, which means you could be responsible for the landlord’s fees if you lose.

Because of these risks and the relatively low dollar amounts involved, tenants in this situation often choose to file small claims lawsuits without a lawyer. Many courthouses have self-help desks or pro se courtrooms for people representing themselves. Free resources like Illinois Legal Aid Online can also help you prepare your case.

Summary of Illinois Security Deposit Law for Buildings with Less Than 5 Units

Thanks to a 2024 update to the Illinois Security Deposit Return Act, all residential tenants in Illinois are now protected by statewide deposit rules – no matter how many units are in the building. This change is especially important for tenants in smaller buildings, who previously had little legal recourse outside of local ordinances or lease-based claims.

If you moved out on or after January 1, 2024, the updated law applies to you. It requires your landlord to return your deposit within 45 days or provide an itemized list of damages and paid receipts. If they fail to comply, you may be entitled to twice the amount wrongfully withheld, plus attorney’s fees.

Local laws in cities like Chicago, Evanston, Oak Park, Urbana, Cook County, and others may provide even stronger protections. And if you moved out before the law changed, your rights depend on whether you are covered by a local ordinance or what your lease says.

No matter your situation, it is critical to know your rights, read your lease carefully, and document your communications with your landlord.

What to Do Next

If your landlord withheld your deposit and you believe it was done unfairly, you may have a legal claim – especially if you moved out after January 1, 2024. Understanding your rights under Illinois security deposit law is the first step. Taking action is the next.

If your unit is in Cook County, my firm offers free reviews of security deposit disputes. To get started, visit our contact page and submit a brief description of your situation. There is no obligation, and we only get paid if you recover money from your landlord.