New Cook County landlord ordinance changes security deposit rules

Posted7/17/2021 7:01 AM

This column is to inform Cook County landlords of the passing of the Cook County Residential Tenant Landlord Ordinance, which became effective June 1. I strongly suggest all Cook County landlords read, review and discuss with your attorneys the impact of this ordinance on your rental properties.

This column will highlight elements of the ordinance but will in no way cover all the ramifications of this ordinance on your rental business. This ordinance impacts all Cook County properties with the exception of properties located in home rule communities, preclosing rental agreements associated with buy-sell transactions, buildings with six or fewer units and owner occupied with an exclusion involving immediate family members.


Special note to real estate agents who complete rental agreements for your landlord clients; you are likely considered a landlord under the ordinance and are potentially subject to the penalty provisions contained therein.

Of course, landlords commonly collect security deposits prior to allowing their tenant to take possession of their property. I believe many if not most attorneys advising Cook County clients will advise their clients to terminate this practice.

Some of the security deposit requirements are:

• The security deposit must be returned within 30 days of the termination of the rental agreement or within 30 days of the tenant vacating the property

• The security deposit must be kept in a segregated federally insured Illinois bank account. The name and address of the institution where the funds are kept must be disclosed to the tenant. If the security deposit is moved from the initial depository, the landlord must inform the tenant within 14 days of the transfer. The list of requirements regarding the receipt for the security deposit is long.

by signing up you agree to our terms of service

• Great care must be taken when a landlord wishes to deduct past due rent, or charge for damages to the property, from the security deposit so as not to violate the ordinance.

A common event in residential real estate transactions is the seller requests to remain in the property after closing for a specified period of time. Often in these situations, at closing, a deposit will be made by the seller, held in escrow, to help ensure the seller vacates the property as agreed and that the property is turned over to the purchaser in the same condition that existed when the purchase offer was made. Under the ordinance, the purchaser now becomes a landlord, subject to the terms and provisions of the ordinance. That deposit made by the seller is now considered a security deposit under the ordinance. In the event the purchaser fails to comply with certain provisions of the ordinance, the ordinance contains penalties up to twice the amount of the deposit, or more.

Another area fraught with danger involves the sale of a rental property. For example, in the past, if the seller of a rental three-flat held $5,000 of tenant security deposits, he or she would simply credit the purchaser the $5,000 and life would go on. Now, all sorts of disclosures must be made to the tenant(s) and both seller and purchaser of the property are subject to the penalties contained in the ordinance if these disclosures are not properly made.

Other provisions in the ordinance include: Landlords are now required to give their tenants at least 60 days notice that their rental agreement will not be renewed and landlords must disclose to prospective tenants any relevant information regarding code violations, utility shut-offs, presence of lead paint, bedbug infestations and foreclosures. Again, substantial penalties exist for failure to comply with these provisions.

This is by no means an exhaustive compilation of the new ordinance. Again, rental property owners are strongly urged to read, review and consult their attorney regarding this new ordinance.

• Send your questions to attorney Tom Resnick, 910 E. Oak St., Lake in the Hills, IL 60156, by email to or call (847) 359-8983.

Article Comments
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.