Introduction to Commercial Landlord Tenant Law

Knowing your commercial landlord tenant law is the surest way to avoid disputes and ugly lawsuits. Learn the important basics here:

Commercial Leases vs Residential Leases

While the similarities between a commercial lease and residential lease are numerous, residential landlords generally have to follow stricter laws set up to protect the average residential tenant.

For example residential landlords are required by law to maintain their rental properties to meet the local health and safety standards. Evicting residential tenants is also a royal pain.

On the other hand, commercial leases are viewed as agreements between competent business people so commercial landlord tenant law do give commercial landlords a lot rights and power in general.

Security Deposits for Commercial Properties

There is no limit to the amount of security deposit you can collect as long as it is stated in the lease agreement and your tenant agrees to it. On the average, most commercial landlords will ask for 1 to 3 month of rent as security deposit. They might also request a letter of credit from the bank if their tenants aren't financially stable.

For residential leases, landlord tenant law restricts the maximum amount of security deposit you ask for (often 1 to 2 month's rent). - Click here to see the security deposit laws for every state in the U.S.

More importantly, commercial landlords have a lot more freedom when it comes to security deposit deductions. For residential tenants, there are very specific situations where a landlord can deduct money from the security deposit, mostly for unpaid rent and property damages caused by the tenant.

Property Repairs for Commercial Properties

In commercial leases, tenants are responsible for most real estate repairs and maintenance. Commercial landlord tenant laws won't hold landlords responsible if the property isn't kept in habitable condition - That task is left to the tenants.

Residential landlord tenant laws tend to be more strict. They often require that the property meets local health and safety codes... and that's the landlord's sole responsibility. Landlords also have to foot any repair bills unless the damage is due the tenant's abuse or neglect.

That being said, there is often room for negotiations when it comes to property repairs and maintenance (for both commercial and residential leases). As long as it's not dictated by the law, landlord and tenants can negotiate and decide who shall be responsible for what repairs.

Evicting Tenants for Commercial Leases

Although evicting your tenants is never a pleasant experience, it is often quicker and easier when it comes to commercial tenants.

With residential tenants, you will have to give them a written notice to quit before you can go to court and file a lawsuit. This notice will give your tenants a few days to resolve any problems before you can bring your case to court.

Most of the time, the law doesn't require commercial landlords to give them a written notice before filing a lawsuit to evict them. However, we still recommend that you give them a written notice and the chance to fix any issues before you head to court to avoid any unnecessary trouble and legal fees.

Landlord Tenant Law

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Commercial Landlord Tenant Law for Repairs 
While I have been a residential property manager since 1997, I only had my first taste of commercial landlord tenant law this year. My property management …