chicago landlords are presumably aware of their obligation to pay annual interest on security deposits at a rate of interest announced at the end of each year by the city comptroller. (Readers of domu’s highly-touted Landlord’s Guide To Security Deposits are aware that all security deposit funds must be placed into a federally-insured, interest-bearing, segregated account at a financial institution located in the State of Illinois and not commingled with landlord assets).

here at domu, we actually remained at our office until shortly before midnight on december 31, anxiously awaiting an announcement of the 2012 interest rate. and we were not disappointed. our faithful city comptroller, amer ahmad, dutifully announced that the rate of interest to be paid on security deposits for rental agreements entered into or renewed between january 1 and december 31, 2012, would be 0.057%. in other words, a landlord holding a $1,000 security deposit under a lease made or renewed during in 2012 will owe the tenant 57 cents at year’s end. a pittance, no doubt, but pity the poor landlord who neglects to make this payment.

landlords who rent apartments at properties containing 25 or more units, whether in a single building or in a complex of buildings located on contiguous parcels, are also bound by the illinois security deposit interest act, which requires the payment of interest on any security deposit held more than six months. in that regard, the illinois department of financial & professional regulation recently announced that the rate of interest to be paid on security deposits in 2012 would be 0.005%. since this rate is lower than the rate in effect for the city of chicago, “institutional” landlords governed by the illinois law will have to pay interest on 2012 leases at the 0.057% rate in effect for the city of chicago.