Security Deposit Clause
(Cash with Burndown) (Commercial Lease) (Pro-Tenant)

Summary

This security deposit clause is for use in a commercial lease. It provides for a security deposit in the form of cash with a burndown provision and contains language favorable to tenant. This clause includes practical guidance and drafting notes. A burndown provision generally allows for the release or reduction of a security deposit at a certain point during the lease term. This template gives the tenant the right to reduce the security deposit one year after the commencement date, but it may be modified to provide for other arrangements. Defined terms used in this clause should be conformed to those used in the relevant lease. This clause favors tenant. For alternate versions of this clause that provide for a security deposit in the form of a letter of credit, see Security Deposit Clause (Letter of Credit) (Commercial Lease) (Pro-Landlord) and Security Deposit Clause (Letter of Credit) (Commercial Lease) (Pro-Tenant). For a 50-state survey regarding security deposit laws, see Security Deposit (Residential and Commercial Leases) State Law Survey.