Get Incremental Access to Cash Tied Up in Significant Security Deposit

January 31, 2018
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Tenant defaults sometimes happen, and experienced owners of office buildings or shopping centers know this and ask for a sizeable security deposit from some tenants who seem at higher risk. If this would leave you with less cash flow than you anticipated, you may be able to get your security deposit back from the owner in increments as the lease progresses—that is, by a “burn-off” of your security deposit over time until it’s eliminated by the end of the lease term. However, a burn-off right should be negotiated and drafted effectively or it could be useless.

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