Security Deposits in a Commercial Lease

There is a lot of room for negotiation when it comes to security deposits.

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Just like a residential rental or lease, your commercial landlord is going to insist on a security deposit. The security deposit can be used by the landlord for a number of reasons, but most commonly it will be used to cover any damage at the end of your lease if you do not renew your agreement.

Unlike residential leases, there aren't any laws that govern how much a commercial landlord can ask for a security deposit. Your landlord may ask for a very large deposit; how much depends on you bargaining power. Additionally, you landlord may earn interest on your security deposit, and unless you work it into your lease, you won't see any of that additional income.

As a result of the rather lax legal setting, you will want to include (as much as possible) favorable security deposit terms in your commercial lease. The articles below address this issue in detail.

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