Maximum deposit amount
Illinois doesn't impose a statewide cap on security deposits. However, charging more than 2 months' rent often hurts your applicant pool more than it protects against damage. Most landlords cap at 1-2 months for practical reasons.
Return deadline after move-out
Illinois requires landlords to return the security deposit (or provide an itemized statement of deductions plus the remaining balance) within 45 days after the tenant surrenders the unit. Missing this deadline can forfeit your right to ANY deductions — meaning you'd owe the full deposit back even for legitimate damage. Some states also impose double or treble damages for willful withholding.
Allowed deductions
Permitted: unpaid rent, damage beyond normal wear and tear (e.g., large stains, holes in walls, broken fixtures), cleaning required to return the unit to move-in condition, unpaid utilities the tenant was responsible for. NOT permitted: normal wear (faded paint, minor carpet wear after 3+ years, small nail holes from hanging pictures, worn weather stripping). Document everything with timestamped photos at move-in AND move-out.
Where the deposit must be held
Most states require deposits to be held in a separate account, not commingled with personal or operating funds. Some states require an interest-bearing account; some require disclosure of where the deposit is held. This is the area where landlords most commonly trip — using deposits for operating expenses creates personal liability.
Itemized statement requirements
When deductions are taken, Illinois requires an itemized statement listing each deduction with a description and dollar amount. Vague descriptions ("cleaning") aren't enough — courts want specifics ("3 hours cleaning at $40/hr = $120; carpet steam clean = $180"). Attach receipts where possible. The statement must be delivered by the return deadline.