Security Deposits in New Hampshire Commercial Leasing

The strict security deposit protections afforded to residential tenants under RSA 540-A—the low cap of one month's rent or $100, the mandatory segregated bank account, and the 30-day return deadline—do not apply to commercial tenancies in New Hampshire.

In the commercial sector, security deposits are entirely unregulated by statute.

Disclaimer: This guide provides general legal information for educational purposes only and does not constitute legal advice. Always consult a licensed commercial property attorney. Information last verified: March 2026.

No Statutory Limits

Because there is no prevailing state law governing commercial deposits:

1. There is no cap on the amount. A commercial landlord can demand 3 to 6 months of gross rent as a security deposit.
2. There is no legal requirement to hold the funds in a segregated bank account (unless the lease explicitly requires it).
3. There is no statutory 30-day return deadline. The return timeline is governed exclusively by the terms of the lease.

Common Methods of Security

Letters of Credit

The preferred security instrument for institutional commercial landlords in New Hampshire. Instead of a large cash outlay, the tenant's bank issues an irrevocable letter of credit. If the tenant defaults, the landlord presents the letter to the bank and receives the guaranteed funds. This protects the landlord if the tenant's business entity files for bankruptcy.

Cash Deposits

For smaller commercial tenancies (e.g., a small retail shop or professional office), a straightforward cash deposit is common. Because there is no statutory handling requirement, the landlord can hold the cash in their general operating account unless the lease specifies otherwise.

Personal Guarantees

Because many commercial tenants operate through LLCs, landlords frequently require the individual owner to sign a personal guarantee. If the LLC defaults on the lease, the landlord can pursue the owner's personal assets to cover unpaid rent and damages.

Drafting the Security Clause

Since the lease is the only governing authority for commercial deposits, a well-drafted security clause must specify:

• The exact dollar amount or the method for calculating the deposit.
• Where the funds will be held (and whether interest accrues to the tenant).
• The exact conditions under which the landlord can draw down on the deposit.
• The "top-up" requirement if funds are drawn (requiring the tenant to replenish the deposit to its original amount).
• The specific timeline for returning the deposit after lease termination.

Managing Commercial Security with Landager

Letting a $150,000 letter of credit lapse because someone missed the renewal date is a catastrophic risk management failure. Landager systematically tracks expiration dates, top-up thresholds, and draw-down events for every commercial security instrument in your New Hampshire portfolio, ensuring your investments are constantly collateralized.

Back to New Hampshire Commercial Landlord-Tenant Laws Overview.