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What is a Security Deposit?

Regulations for how to accept, store and keep a security deposit differ across jurisdictions, but it is a good idea to keep a tenant or subtenant's deposit in a separate escrow account.

In Illinois, there is no limit to the amount you can charge for a security deposit unless you live in subsidized or public housing. In these cases, the law states that you may only charge a deposit similar to deposits being charged by private landlords in the area. A security deposit is generally equal to the amount of 1 months' rent.

Storing the Deposit

There is no state legal guidance in Illinois governing the storage of security deposits. Many people choose to keep security deposits in a separate bank account specifically for that purpose.

Returning the Deposit

You can use your subtenant’s security deposit to pay for cleaning the unit, damages beyond normal wear and tear or to cover unpaid rent. If you are returning your subtenant's security deposit in full, you must do so within 45 days of the end of the sublease term. In order to withhold some or all of the security deposit, you must give written notice to your subtenant within 30 days of the end of the sublease agreement. Written notice must include the amount of the security deposit that you are claiming, why you are claiming it, and paid receipts showing the costs of repairs.

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