Do I have to put a security deposit into a commercial lease?

Verified 02 October 2025 - Directorate of Legal and Administrative Information (Prime Minister)

A security deposit is a sum of money paid by the tenant (called taker) to the owner (called landlord) when signing the commercial lease. This amount is retained for the duration of the lease. It allows the landlord to cover unpaid rents or necessary repairs in case of damage to the tenant.

The payment of a security deposit not required.

The amount of the security deposit is freely fixed by the parties. In practice, it amounts to one of the following amounts:

  • That is 3 months of rent when the rent is payable quarterly and in advance
  • That is 6 months of rent when the rent is payable by quarter and at maturity

If the security deposit exceeds these amounts (3 months in case of advance payment or 6 months in case of payment on maturity), the owner must pay the tenant interest. This interest is calculated at the rate applied by the Banque de France for advances on title.

In any case, the lessor must not claim from the lessee (or tenant) the VAT on the amount of the security deposit.

Please note

The lease agreement generally provides that the security deposit corresponds to 3 months of rent. Accordingly, the security deposit is revised at the same time as the rent and/or when the lease is renewed.

The security deposit must be refunded to the tenant when he leaves the premises, that is to say after the completion of an inventory of the exit and the handover of the keys.

The law does not provide for no maximum delay for the return of the security deposit. However, a time limit is often specified in the commercial lease agreement.

Thus, the lessor who does not repay the security deposit several months after the return of the premises (or the period specified in the lease) may be ordered to pay, in addition to the security deposit, interest at the legal rate from the time of the formal notice as well as damages.

The tenant must return the premises in good repair condition. If the tenant makes the premises degraded, the lessor can keep – partially or in full – the sum of the security deposit according to the work necessary to carry out a reorganization of the property.

FYI  

The commercial lease often provides that the tenant must pay his rent until the end of the contract. The tenant is therefore not allowed to deduct the security deposit from the last rent due.

The security deposit is a personal debt from the lessor to the lessee.

If the rented premises are sold, it is the original lessor who will have to return the security deposit to the tenant.

Thus, the purchaser of the premises cannot require the tenant to make a new security deposit.

On the other hand, where the original lessor has returned the security deposit to the tenant at the time of the sale, the purchaser may then ask the tenant to pay a new security deposit.

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