Malta Commercial Security Deposits

In the commercial sector in Malta, security deposits are a matter of intense negotiation and are not subject to the residential market norms.

Deposit Amounts

Unlike residential leases where one month is standard, commercial deposits often range from 3 to 6 months' rent. For high-value retail or industrial spaces, the security may even be higher or structured as a Bank Guarantee.

Forms of Security

Commercial landlords in Malta often accept:

• Cash Deposit: Held by the landlord (usually non-interest bearing).
• Bank Guarantee: A letter from a Maltese bank guaranteeing payment of a specific sum upon the landlord's demand.
• Parent Company Guarantee: Common for international franchises.

Deductions and Reinstatement

A unique aspect of commercial deposits is their use for reinstatement costs. If a tenant modifies a shell-and-core space, the landlord may use the deposit to return the property to its original state if the tenant fails to do so upon exit.

Deposit Return Procedures

Under the general principles of the Civil Code (Cap. 16), a commercial security deposit must be returned to the tenant immediately upon the legal termination of the lease and the successful handover of the keys. Landlords are, however, entitled to retain all or a portion of the deposit to offset documented breaches of contract. This includes unpaid utility bills, pending damages to the commercial property, or unfulfilled reinstatement obligations, provided they supply an itemized list of deductions.

How Landager Helps

Landager tracks different types of security—whether cash or bank guarantees—and alerts you when a guarantee is approaching its expiry date.