Security Deposits

Unlike residential leases, under which landlords must return security deposits within 30 days of the tenant's vacating the premises (as detailed in the Chicago Landlord-Tenant Ordinance), there are no defined legal time limits for the return of a security deposit in a commercial or industrial lease. Security deposits can be any amount agreed upon by you and the landlord. Therefore, stipulate the exact amount of time post-expiration or termination of the lease that the landlord has to return your deposit.

The landlord may withhold part of the security deposit to cover unpaid rent, reasonable costs to repair damage caused by the tenant, or interest. Specify the conditions under which the landlord can keep the deposit or apply it towards unpaid rent.

Commercial tenant usually must maintain a certain amount of funds in deposit throughout the tenure of the lease. If the landlord uses your deposit money to cover unpaid rent, you will have to replenish the funds within a specified period of time after its use.

Limit what the landlord can do with your deposited funds. Insist on the inclusion of language that requires the landlord to notify you, and provide a specified and reasonable amount of time to respond if s/he attempts to apply the deposit to back rents or other costs (CAM, property taxes, etc.).

Your landlord may also apply the deposit against move-out damages, maintenance or other operating costs you have created. In the lease, require the landlord to provide a detailed list of which charges were deducted, and always maintain your right to challenge the deductions.