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Commercial Leasing- 3 issues with commercial security deposit

Commercial leasing: Renting commercial space shouldn't have to be an overly contentious element of operating a business. However, there are issues that come up throughout the course of commercial tenant-landlord relationships that can cause some disagreements and confusion.

Security deposits are one of the common issues that can spark a dispute. Below, we look at a few examples of typical arguments that tenants and landlords in Florida often have with regard to commercial security deposits, as well as what you can do to prevent or resolve these matters.

Issue: The deposit is too high.

Commercial tenants should expect to pay a security deposit at the beginning of any lease period, but they can be surprised if the amount of the deposit is much higher than one or two months of rent. Understand there are no laws that limit the amount a landlord may request in a deposit. Before you get discouraged by a high security deposit, though, understand that this amount is often negotiable.

Issue: The landlord is wrongfully retaining the deposit.

A landlord has the right to retain some or all of your security under certain circumstances. For instance, if you violate the terms of a lease or vacate the property without proper notice, then you may lose your deposit. However, if a landlord will not return your deposit within the legally specified time and is not giving an acceptable reason why, then you may need to take legal action to collect your deposit.

Issue: The landlord is mismanaging it.

In accordance with Florida landlord and tenant statutes, a security deposit should be held in either an interest-bearing account or a non-interest-bearing account and should not be commingled with other accounts. Further, security deposits are traditionally for expenses like repairs or unpaid rent. However, if a landlord is using your deposit to pay for other, unapproved expenses, then you may need to file a legal claim to protect this money.

These and other issues related to a security deposit can spark costly, contentious legal disputes. One frequent issue is the lease is not signed by all the owners or not signed by their authorized agents, making it difficult to enforce.  This becomes more of an issue if the lease includes an option to extned the lease, an option to purchase or a right of first refusal. To protect yourself and your money, you can talk to an experienced attorney if you have any questions or concerns regarding a security deposit.

If you find yourself in a dispute or litigation concerning security deposits or rents, we can help.

Thought for the Day:

"I've missed more than 9,000 shots in my career. I've lost almost 300 games. 26 times I've been trusted to take the game's winning shot and missed. I've failed over and over and over again in my life and that's why I succeed." - Michael Jordan, NBA Hall of Famer.

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