Utah Commercial Security Deposit Laws

Unlike residential properties which have specific statutory guidelines dictating the return of security deposits, Utah law takes a hands-off approach to commercial security deposits. In the commercial realm, the written lease agreement is the ultimate authority.

Disclaimer: This guide provides general legal information for educational purposes only and does not constitute legal advice. Always consult a licensed attorney in Utah for advice specific to your situation. Information last verified: March 2026.

No Statutory Limits

Utah law establishes no maximum limit on how much a commercial landlord can charge for a security deposit.

Because commercial build-outs (Tenant Improvements) are expensive and the financial risk of a commercial tenant defaulting is high, landlords often request substantial deposits. Common commercial deposit amounts range from one month's rent to six months' rent, often depending on:

• The tenant's credit history and business financials.
• The cost of the tenant improvements (TI) funded by the landlord.
• The length of the lease term.

Account Requirements

Utah does not require commercial landlords to hold security deposits in a separate, interest-bearing escrow account. Landlords are generally free to commingle commercial deposit funds with their operating accounts unless the lease agreement specifically requires the deposit to be held in a segregated account or requires interest to be paid to the tenant.

Return Deadlines Dictated by Lease

The strict 30-day return window applicable to residential deposits does not apply to commercial leases in Utah.

Instead, the deadline for returning a commercial security deposit must be defined within the lease agreement itself. It is common for commercial leases to stipulate return windows of 30, 60, or even 90 days after the tenant vacates the premise, allowing the landlord ample time to assess damages and calculate final utility or CAM (Common Area Maintenance) reconciliations.

Warning: If a commercial lease completely fails to mention a timeline for returning the security deposit, a court may impose a "reasonable time" standard, which can lead to unnecessary legal disputes.

Allowable Deductions

A commercial landlord may use the deposit to cover any breach of the lease agreement, including:

• Unpaid base rent or additional rent (CAM, taxes, insurance).
• Costs to repair damages caused by the tenant beyond normal wear and tear.
• Costs to remove specialized alterations or equipment left behind by the tenant if the lease required their removal.
• Cleaning costs.

Non-Refundable Fees: Just like in residential law, commercial landlords can charge non-refundable fees (e.g., an administrative fee or a non-refundable cleaning deposit). However, these must be explicitly designated as "non-refundable" within the executed lease agreement.

How Landager Helps

Tracking differing security deposit rules across a mixed portfolio of commercial and residential units can lead to compliance failures. Landager's platform allows you to upload custom commercial lease terms, logging specific, unique return deadlines for each commercial tenant and automating reminders so you never breach your own contract.

Back to Utah Commercial Property Laws Overview.