Security Deposits in a Commercial Lease

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.

In some cases, a bank will guarantee payment to the landlord in lieu of a cash deposit from you.

You should get your deposit back at the end of your lease, and you may even be able to get it earlier.

Empower Yourself: DIY Products by Nolo

Sidestep the lawyers with do-it-yourself books, documents, and software.

Manage the legal and tax affairs of your LLC with this set of books. Form and operate your LLC with Nolo's LLC Handbook. Understand LLC taxation with Tax Saavy for Small Business.
Use this pair of Nolo’s bestselling business books to answer your routine legal questions and guide you in filling out the forms, documents, and contracts needed to run your day-to-day operations.
Our form provides everything you need to establish the internal rules of your limited liability company.
Building Your Business is Expensive. Launching Your LLC Shouldn't Be.

Nolo offers hundreds of consumer-friendly, do-it-yourself legal products for all types of legal situations. Browse our full product list.

More Legal Issues

Click below to view more legal issues. Our extensive collection of legal topics ranges across different areas of practice.

Learn About Our Team

Learn About Our Team

Our editors have over 100 years of combined experience practicing law. These professionals have worked in a wide range of legal areas, from estate planning to criminal law to business formation and beyond. They’re experts at explaining complicated legal issues in easy-to-understand terms.

Learn more about the team that manages Nolo’s articles, books, and DIY tools.

Need a Lawyer? We Can Help

Find an experienced, local attorney in three easy steps. Our process is designed for ease and simplicity.

01

Describe Your Case

Briefly tell us about your case, and provide your contact information.

02

Get Connected

We find and instantly list attorneys that can best handle your case.

03

Hire an Attorney

Choose the attorneys you would like to work with.

Integrity and Expertise You Can Rely On

Get Professional Help
Talk to a Business Law attorney.
There was a problem with the submission. Please refresh the page and try again
Full Name is required
Email is required
Please enter a valid Email
Phone Number is required
Please enter a valid Phone Number
Zip Code is required
Please add a valid Zip Code
Please enter a valid Case Description
Description is required
How It Works
  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you