Must a commercial landlord include interest when returning a security deposit to his tenant at the end of the lease?

4 views 2 answers
We are ending a 3-yr tenancy for a warehouse space in Montgomery County, MD. The landlord has held $2,325 as a security deposit from us for this period. When he returns it, is he responsible for returning it to us with interest? The lease is silent on this subject. (I am, coincidentally, the landlord in a number of residential leases in the same county and I am required to return security deposits with added interest to my tenants. My question is: is this also true in commercial leases?)

Attorney Answers

2
Mark Oakley ·
Most statutory protections of tenants (such as requiring interest on security deposits and imposing an obligation to maintain tenant deposits in an escrow account separate from the landlord's other deposits) only apply to residential leases. Commercial parties are deemed to be sophisticated enough to negotiate by contract all of the protections they may wish to have in their lease. Therefore, unless it is provided for in your lease, the landlord is not obligated to add interest to the deposit. However, once the deposit becomes due, if it remains unpaid after that date then you may be entitled to prejudgment interest of 6% per year from that date until any judgment is obtained against the landlord for its return.
0 upvotes
Lavonne Torrence ·
Montgomery County, Maryland does not require commercial landlords to pay interest on security deposits. Your lease will govern the landlord's obligations. As Mr. Oakley has pointed out, you may be entitled to interest if the deposit is not timely returned and you are awarded a judgment against the landlord for their failure to timely return the deposit. If your existing lease does not require the landlord to pay interest, it might be helpful in the future to engage an attorney with significant commercial lease experience to negotiate security deposit rights and other pivotal provisions of the lease.
0 upvotes