Maryland Commercial Security Deposits: Uncapped & Negotiable

Unlike the strict, highly regulated two-month cap on residential security deposits, Maryland commercial security deposits operate in a free market. The state imposes practically no statutory restrictions, leaving all terms to the negotiation table.

Disclaimer: This guide provides general legal information for educational purposes only and does not constitute legal advice. Always consult a Maryland commercial real estate attorney before drafting or signing a lease. Information last verified: March 2026.

No Maximum Cap

There is no maximum limit on how much a landlord can demand for a commercial security deposit in Maryland. Depending on the tenant's creditworthiness, the nature of their business, and the extent of the landlord's build-out costs, deposits can range from one month's rent to six months' rent, or even a full year.

Alternatives to Cash Deposits

Because commercial cash deposits can tie up significant operating capital, many sophisticated Maryland landlords accept alternatives:

• Irrevocable Letters of Credit (LOC): Issued by a bank, guaranteeing the landlord can draw down funds if the tenant defaults. This is highly preferred by institutional landlords because the LOC stands separate from the tenant's bankruptcy estate.
• Corporate or Personal Guaranties: The parent corporation or the individual business owners personally guarantee the financial obligations of the lease.

No Statutory Interest or Account Requirements

Maryland law does not require commercial landlords to hold security deposits in separate, interest-bearing Maryland accounts, nor does it require them to pay interest to the tenant upon return.

However, a tenant with strong negotiating power may demand a lease clause stating the deposit will be kept in a segregated account and that accrued interest will remain the property of the tenant.

Return Deadlines Are Lease-Dependent

There is no statutory 45-day deadline to return a commercial security deposit. The timeframe for returning the deposit—and what itemized deductions are permitted—is governed completely by the specific terms carved out in the written lease.

Common negotiated clauses give the landlord 30 to 60 days following the expiration of the lease and the tenant vacating the premises in the condition required by the "Make Good" provision.