Most every commercial lease has (or should have!) provisions
regarding the management and application of the tenant’s security
deposit. Since the Virginia Code does not specifically address security
deposits for commercial leases, the applicable lease provisions will control in
the event of any dispute between the landlord and the tenant. Ideally,
the lease should: specify the amount of the security deposit; permit the
landlord to make deductions from the security deposit in the event the tenant
fails to pay rent, damages the property or otherwise violates the lease;
require the tenant to restore the full balance of the security deposit in the
event deductions are made by the landlord during the term of the lease; permit
the landlord to transfer the security deposit to a successor landlord; and set
forth a time table pursuant to which any remaining balance of the security
deposit will be refunded following the termination of the lease. It is
quite common for landlords and tenants to dispute the application of the
security deposit at the end of the lease term. A well-written lease will
give the landlord substantial power to make deductions from the security
deposit to repair damage to the property and to compensate the landlord for any
other losses incurred as a result of the tenant’s actions or defaults. It
will also shift the legal burden to the tenant to contest the landlord’s
deductions. Of course, landlords should endeavor to be reasonable with
respect to deductions and should meticulously account for any deductions by
documentation of charges and communicating clearly with the tenant.
No comments:
Post a Comment