Oak Lawn Title 3 Ch. 1 General Provisions (§3-1-7-3 interest on security deposits) § 3-1-7-3
RENTAL UNITS, INTEREST ON SECURITY DEPOSITS
Operative Text
A. A lessor of residential real property who receives a security deposit from a lessee to secure the payment of rent or compensation for damage to property shall pay interest to the lessee computed from the date of the deposit at a rate of one-hundredth of a percent (0.01%) per year on any such deposit held by the lessor for more than one year, provided, however, that all terms and conditions of the lease have been fully complied with by the lessee. In the event the lessee fails to fully comply with all terms and conditions of the lease, the lessor may retain all interest earned on any such security deposit. B. When a lease is terminated by either party and interest on a security deposit is due, the lessor has the right to inspect the apartment for damages in order to determine whether the security deposit shall be refunded, and should there be damages in excess of the amount of said security deposit, the interest due thereon need not be paid but may be applied to reduce the damages. C. When the term of the lease is for two (2) years or less, the interest due the lessee on the security deposit shall be retained by the lessor and paid to the lessee within thirty (30) days after the end of the term, upon inspection of the premises by the lessor and determination that no damages, other than those caused by ordinary use, have occurred. D. When the term of a lease is greater than two (2) years, the interest owed thereon by the lessor shall be paid every two (2) years and at the expiration of the lease, in each instance after an inspection for damages by the lessor. E. When a lease in excess of six (6) months is renewed, at its expiration the lessor shall pay the lessee all interest accrued to the renewal date within thirty (30) days after said expiration date. (Ord. 75-26-101; 1985 Code; Ords. 92-08-36, 16-02-09)
Oak Lawn Title 3 Ch. 1 §3-1-7-3 requires residential landlords to pay interest on security deposits held for more than one year, at a rate of 0.01% per year, but only when the tenant has fully complied with all lease terms. The timing of when that interest must be paid depends on the length of the lease: for leases of two years or less, payment is due within 30 days after the lease ends; for longer leases, interest is paid every two years and at expiration. If damages beyond ordinary wear exceed the deposit amount, the landlord may apply the accrued interest toward those damages rather than paying it out.
Plain English — not legal advice.
Landlords operating under Oak Lawn Title 3 Ch. 1 §3-1-7-3 generally track the date each security deposit was received and calculate interest at 0.01% per year once a deposit has been held for more than one year. Compliant operators follow the payment schedule tied to lease length — disbursing interest within 30 days of lease end for shorter leases, every two years for longer ones, and within 30 days of a renewal's expiration date when a lease exceeding six months is renewed. Conducting a documented inspection before each interest disbursement is part of the process, since the provision allows interest to be withheld or applied to damages when the tenant has not fully complied with lease terms or when damages exceed the deposit.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Under Oak Lawn Title 3 Ch. 1 §3-1-7-3, tenants who have fully complied with their lease terms are entitled to interest on their security deposit once it has been held for more than one year, paid out on a schedule tied to the lease length. If a landlord fails to pay interest as required — for example, not remitting it within 30 days after a lease of two years or less ends — tenants may have grounds to raise that failure as part of a dispute over the deposit. Tenants who believe their rights under §3-1-7-3 have not been honored can look into filing a complaint with the appropriate local authority or consulting a tenant-rights organization familiar with Oak Lawn regulations.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated November 10, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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