Security Deposit Limits and Handling

• Tennessee has no rules regarding security deposits on commercial properties.

• Landlords can ask for any amount for the security deposit. They can also store it using any type of account, as there are no restrictions on it mingling with other funds.

• Lessors don’t need to bear interest on the amount, as lessees aren’t entitled to any interest.

• Most landlords follow the residential example and return the security deposit within 30 days of the lease’s end. The only exception is if the tenant doesn’t ask for the deposit’s refund.

• The lessor must do their due diligence in sending the security deposit to the lessee’s last known address. If they haven’t requested or claimed it within 60 days since the lease ended, the landlord can keep it.

Right of Entry for Inspections and Repairs

• The landlord cannot enter the property for an inspection without first sending notice. However, they don’t need the tenant’s permission to enter the premises.

• There’s no specific notice period. As such, most landlords abide by the residential notice period of 24 hours.

• Should the contract not state otherwise, the tenant is responsible for all repairs and maintenance. The lessor must ensure the property is in good condition prior to the agreement. However, once the contract starts, this responsibility falls on the lessee.

Environmental Responsibilities

• The landlord has the responsibility to ensure their property abides by all federal, local, and state environmental laws. Some lessors add a clause prohibiting the lessee from dealing in any business that affects environmental regulations.

• The lessor can also require environmental inspections if the business deals with ecological hazards and materials.

• It’s the tenant’s responsibility to ensure the property abides by environmental laws while it’s in their possession.

Notice Requirements

• There are no laws surrounding the notice periods for commercial leases.

• Most landlords follow the residential requirements, which means a weekly lease will have a 10-day notice period. For monthly commercial leases, most abide by giving 30 days written notice.

• Fixed-term leases have no notice period and should end on the stated date. Breaking a fixed-term agreement early can result in penalties.

• Penalties can be the tenant losing the lease or paying all of the outstanding rent. It can also be that the lessor sues the lessee in the small claims court.

Include Required Disclosures

There aren’t many disclosures commercial lessors must add to the agreement. In fact, there’s only one:

• Lead-Based Paint Disclosure: The landlord must state whether lead-based paint is present. It’s only valid for buildings older than 1978.