Commercial Lease: The Security Deposit in France

In France, the payment of a security deposit (dépôt de garantie) upon signing a commercial lease is governed by the French Commercial Code. While not strictly mandatory by statute, it is an almost systematic clause during negotiations. Following the adoption of the Law for the Simplification of Economic Life (Loi SVE) in April 2026, the total amount of the security deposit and associated guarantees is now strictly capped by law, and disputes fall under the jurisdiction of the Tribunal Judiciaire.

1. The Amount and Statutory Caps

Under Article L. 145-40 of the Commercial Code (as amended by the 2026 Loi SVE), the total amount of the security deposit and any associated guarantees (such as bank guarantees or GAPD) is strictly capped at 3 months of principal rent (excluding charges and VAT).

Prior to this reform, custom often dictated:

• Rent paid monthly in advance: 2 months of rent.
• Rent paid quarterly in advance: 1 quarter (3 months) of rent.
• Rent paid quarterly in arrears: Up to 2 quarters (6 months).

However, the 3-month cap now serves as the absolute legal limit for the cumulative value of all guarantees provided by the tenant.

The "Trap" of Applicable Interest

Article L. 145-40 of the Commercial Code stipulates a system for interest on deposits held by the landlord: "Rents paid in advance, in whatever form, and even as a guarantee, bear interest for the benefit of the tenant, at the 'taux des avances sur titres' practiced by the Bank of France (...) for the sums exceeding that which corresponds to the price of the rent of more than two terms."

Example: If the rent is €10,000 paid quarterly in advance. Two terms correspond to 2 quarters of rent (6 months, or €20,000). If the landlord holds sums (as a guarantee or advance) exceeding this 6-month threshold, the portion that exceeds the limit must produce interest for the benefit of the tenant at the Bank of France's rate for advances on securities. Note that for leases where the deposit respects the new 3-month cap and rent is paid monthly, the deposit typically no longer produces interest.

2. The Security Deposit is Not Subject to VAT A critical tax point (BOI-TVA-BASE-10-10-30): Unlike commercial rent which can be subject to VAT, the security deposit does not constitute remuneration for a provision of service or a delivery of goods at the time of its initial payment.

• Therefore, VAT is not calculated on the initial call for funds.
• It only escapes the tax temporarily: if, upon leaving the premises, the landlord retains the deposit to cover unpaid commercial rent that was subject to VAT, the final deduction must be broken down and the landlord must remit the VAT to the Treasury.

3. Adjustment During the Lease A lease drafted by professionals contains an "upgrading clause" or a "deposit readjustment clause." The initial guarantee must constantly track the real indexed rent.

• If the rent increases (via the ILC or ILAT indices), the landlord will often require the tenant to pay a supplementary guarantee, provided the total does not exceed the statutory 3-month cap.
• If the rent falls, the deposit often remains level unless contractual restitution of the variance is specifically owed.

4. Return of the Deposit Under Article L. 145-40 of the Commercial Code (Loi SVE 2026), strict deadlines now apply to the restitution of guarantees:

• Security Deposit: Must be returned within a maximum period of 3 months following the handover of the keys and the completion of the move-out inventory (état des lieux de sortie).
• Bank Guarantees: For other forms of guarantee like bank cautions, the return deadline is 6 months.

A contradictory état des lieux (inventory of fixtures) is mandatory at both the start and end of the lease under Article L. 145-40-1 to justify any deductions. If there is an unpaid balance, sums for repairs or unpaid rent will be deducted upon presentation of supporting documents (memos, quotes, or expertises) linked to the move-out inventory.

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How Landager Helps

Landager automates your commercial lease indexing, tracks ILC/ILAT indexation requirements, and ensures your security deposit management aligns with the 3-month cap and return deadlines mandated by Article L145-40 of the Commercial Code.

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