Evanston, Illinois: security deposit interest

Ordinance No. 52-O-24, adopted July 22, 2024, struck the subsection that made a housing provider pay interest at Chicago's published rate, struck the city's duty to publish that rate, and removed the words "interest bearing" from the account requirement. What survives in § 5-3-5-1 still caps the deposit at one and a half months' rent, still requires a federally insured Illinois account held apart from the provider's own money, and still gives a tenant twice the amount wrongfully withheld on a late or short refund — but no interest. Two consequences follow. Illinois' Security Deposit Interest Act reaches only buildings of twenty-five or more units, so tenants in smaller Evanston buildings now have no deposit-interest right at all; and a tenancy that began before January 1, 2025 was governed by the old rule, which means Chicago's published rate series, not the state's, answers historical Evanston questions.

Evanston deposit interest at a glance

The rate history

Evanston never set a rate of its own. The repealed subsection required a housing provider who received security or prepaid rent to "pay interest to the tenant at the rate equal to the interest rate paid on such security deposits in the city of Chicago," and a companion subsection put a duty on the city to publish that rate. Ordinance No. 52-O-24 struck both. Because the peg ran to Chicago rather than to the state, a question about an Evanston tenancy that began before January 1, 2025 is answered with the rate the Chicago Comptroller announced for the year the agreement was made or renewed — not with the state rate.

Who and what is covered

The repealed rule sat in Evanston's Residential Landlord and Tenant Ordinance, which covers dwelling units in the city, including a mobile or manufactured home a tenant rents under a rental agreement. Tenancies entered into or renewed before January 1, 2025 fell under the old rule; from that date forward none do.

Custody of the deposit

Still live, and changed only by two words. Section 5-3-5-1(C) requires a housing provider to hold all security deposits "in a federally insured account in a bank, savings and loan association or other financial institution located in the state of Illinois." The deposit stays the tenant's property, may not be commingled with the housing provider's assets, and is out of reach of the housing provider's creditors, including a foreclosing mortgagee or a trustee in bankruptcy. What Ordinance No. 52-O-24 removed from that sentence was the phrase "interest bearing" — so the account must still be insured and separate from the provider's own money, but it need not earn anything.

Penalty for violation

Section 5-3-5-1(D) lets a tenant recover the property and money due, plus damages equal to twice the amount wrongfully withheld and reasonable attorney fees. That remedy attaches to the refund duty in subsection (B) — the twenty-one-day itemized return after the tenant vacates — and not to any interest duty, which no longer exists. Since April 13, 2026 the chapter also carries a fine. Ordinance No. 30-O-26 added § 5-3-13, which sets a fine of not less than one hundred dollars and not more than one thousand dollars for each offense and allows every day a violation continues to be treated as a separate offense. How far that fine reaches is unsettled on the face of the code. The amendment the City Council adopted on April 13, 2026 applied the fine to "the provisions of this chapter"; the filed ordinance and the codified section both read "the provisions of this Section," which points only at the fine section itself. A tenant's right to twice the amount wrongfully withheld under § 5-3-5-1(D) does not depend on § 5-3-13 either way.

How this interacts with state law

Illinois' Security Deposit Interest Act, 765 ILCS 715, requires interest only from a lessor of residential property containing twenty-five or more units, only on deposits held six months or more, paid within thirty days after the end of each twelve-month rental period at a rate the Department of Financial and Professional Regulation announces each year. Evanston's own rule used to reach below that threshold by borrowing Chicago's rate. Since January 1, 2025 it does not, so a tenant in an Evanston building of fewer than twenty-five units has no deposit-interest right from either layer.

Mobile home parks

Evanston's ordinance expressly reaches mobile and manufactured homes, and the definition of "dwelling unit" at § 5-3-2(A) states that the city's security-deposit section "shall supersede, in its entirety, Section 18 of MHLTRA (Security Deposit; Interest) in its entirety" — that is, the deposit-interest section of the state Mobile Home Landlord and Tenant Rights Act, 765 ILCS 745/18. Since Evanston's own security-deposit section carries no interest duty after the 2024 amendment, the ordinance as written switches that state right off within the city and puts nothing in its place, which is the opposite of what a local overlay usually does. Two cautions belong with that sentence. First, the clause names "Section 42-811 of this Article" as the superseding section, and no section 42-811 exists anywhere in the chapter, whose sections run in the 5-3 form; the section actually titled "Security Deposits and Prepaid Rent" is § 5-3-5-1, which appears to be the intended reference. Second, whether a home-rule municipality can displace a section of a state act this way is a question of Illinois home-rule law that is not settled here. What is stated is what the ordinance says, not the answer to that question.

Notes and caveats

• Tenancies that began before 2025 used Chicago's rate — This is the detail most sources miss. Evanston's repealed rule did not borrow the Illinois rate — it borrowed Chicago's, the figure the Chicago Comptroller announces each year for rental agreements made or renewed in that year. A tenant working out what was owed on an Evanston tenancy that started before January 1, 2025 needs the Chicago series for the year the agreement was made or renewed, and will get a wrong answer from the state rate.
• Small buildings lost the right outright — Illinois' Security Deposit Interest Act reaches lessors of residential property containing twenty-five or more units. Evanston's local rule had no unit threshold, so it was the only deposit-interest protection most Evanston renters had. With the local rule gone, a tenant in a building under twenty-five units has no deposit-interest right from any layer of law, and a tenant in a larger building has only the state one.
• The account must be insured, not interest-bearing — A reader comparing an older copy of the ordinance with the current one will find the difference in § 5-3-5-1(C). The subsection still requires a federally insured account at an Illinois institution and still keeps the deposit out of the provider's assets and beyond the provider's creditors; what it no longer says is that the account must be interest bearing. The custody duty survived the 2024 amendment. The interest duty did not.
• A chapter fine was added in April 2026 — Evanston's landlord-tenant chapter had no fine of its own until Ordinance No. 30-O-26 added § 5-3-13 on April 13, 2026: not less than one hundred dollars and not more than one thousand dollars for each offense, with every day a violation continues capable of being treated as a separate offense. Read the words carefully before relying on it. The version the City Council adopted applied the fine to the provisions of the chapter; the version printed in the code applies it to the provisions of "this Section," and that section contains nothing but the fine. The private remedies in § 5-3-5-1(D) are unaffected.

Cite this page: "Landlord Atlas, Evanston, Illinois: security deposit interest (verified September 20, 2026), landlordatlas.com/laws/deposit-interest/illinois/evanston/" — free to cite and quote with a link (how these records are verified).

Citations

• Evanston City Code tit. 5, ch. 3 (Housing Provider and Tenant Regulations) (verified 2026) Official source
• Evanston City Code § 5-3-5-1 (Security Deposits and Prepaid Rent) · (C), (D) (verified 2026) Official source
• Evanston City Code § 5-3-2 (General Definitions), definition of 'dwelling unit' · (A) (verified 2026) Official source
• Evanston Ordinance No. 52-O-24 (redlined text, adopted July 22, 2024) · § 1 (verified 2026) Official source
• City of Evanston, Residential Landlord and Tenant Ordinance page (effective date) (verified 2026) Official source
• Evanston City Code § 5-3-13 (Penalty) (verified 2026) Official source
• Evanston Ordinance No. 30-O-26 (adopted April 13, 2026; added § 5-3-13, Penalty) · § 1 (verified 2026) Official source

How this record was verified: Evanston City Code title 5, chapter 3 (Housing Provider and Tenant Regulations, the Residential Landlord and Tenant Ordinance) read in full from the city's official code, all forty-eight documents of the chapter, as codified through Ordinance No. 39-O-26 enacted May 11, 2026 (Supplement 22, Update 1; pages updated September 8, 2026), with every credit line in the chapter enumerated and both occurrences of the word "interest" read in context; § 5-3-5-1, the definition of "dwelling unit" at § 5-3-2, the scope and exclusions at § 5-3-1(D)–(F) and the new § 5-3-13 read verbatim with their credit lines; the enacted text of Ordinance No. 30-O-26, which added § 5-3-13, and of Ordinance No. 19-O-26, which created a separate § 5-3-13 on rent-price coordination, both read on the city's own ordinance file, together with the City Council minutes of April 13, 2026 and June 8, 2026 for the adoption dates and the text the Council voted on; and the redlined text of Ordinance No. 52-O-24 and the city's Residential Landlord and Tenant Ordinance page read earlier for the January 1, 2025 repeal of the local deposit-interest rule.

This page records local law on deposit interest. The statewide position — Illinois requires deposit interest only from lessors of residential property with 25 or more units, and only on a deposit held more than six months. — lives on the Illinois deposit-interest page with its own citations and verification date.