Security Deposits Under Office Leases

The landlord under an office lease typically requires you to post a security deposit for performance of your lease obligations. This security deposit is generally equal to one or two month's rent, but a landlord may insist on more if the company is new or financially unstable.

From the tenant's perspective, you want the following if you can get it:

• Interest on the security deposit
• A reduction in the amount of the security deposit if the tenant has been paying the rent on time for at least a year
• A provision that says the security deposit must be returned within 15 days of the termination of the tenancy

You may be able to obtain the above clauses in an amendment to the landlord's standard form lease. Click here for a sample Amendment to Commercial Lease.

Some landlords may insist on a personal guarantee from the business founders if the tenant will be a corporation or other entity. Try to avoid this situation — it puts your personal, as well as business, assets at risk.

Copyright © LegalDocs Online, Inc. All Rights Reserved.