How Can Commercial Landlords Protect Themselves in Texas?

 Posted on June 23, 2025 in Business and Commercial Law

Owning commercial real estate in Texas can be profitable, but it comes with significant risks. From tenant defaults to property damage, commercial landlords face challenges that can quickly turn profitable investments into financial nightmares. Understanding Texas-specific protections and best practices helps safeguard your investment and minimize costly surprises. An experienced Hood County, TX commercial real estate attorney can advise you on common ways to protect your commercial property. 

Tips for Texas Commercial Landlords 

Sign Strong Lease Agreements

Your commercial lease agreement serves as your primary protection against potential issues. Include specific rent payment dates, late fees, default procedures, and tenant responsibilities for maintenance and repairs, and avoid generic or template agreements. Texas allows landlords significant flexibility in lease terms, so take advantage by including personal guarantees from business owners, especially for new or small businesses. These guarantees make individual owners personally responsible for lease obligations even if their business fails.

Obtain a Substantial Security Deposit 

Texas does not limit security deposit amounts. You should require substantial security deposits – typically two to three months' rent – to cover potential damages and unpaid rent. Consider requiring the first and last month's rent upfront along with the security deposit for maximum protection. This is particularly important in commercial leases, which tend to last for a significantly longer time period and where the tenant is likely to make significant changes to the property.

Conduct Regular Property Inspections

Texas law allows landlords to inspect commercial properties with reasonable notice, typically within 24 hours. Schedule regular inspections to identify maintenance issues, unauthorized modifications, or lease violations early. Document everything with photos and written reports to build a record in case you need to take legal action. Pay special attention to businesses that might cause environmental damage or exceed occupancy limits, as these issues can create expensive liability for property owners.

Require Extensive Insurance and Liability Protection

Require tenants to carry comprehensive general liability insurance naming you as additional insured. This can protect you from lawsuits arising from tenant activities on your property. Specify minimum coverage amounts in your lease, which are typically one to two million dollars for most commercial properties. In addition, maintain your own comprehensive property and liability coverage, including loss of rent insurance that compensates you for income lost during repairs or tenant defaults.

Call a Hood County, TX Commercial Real Estate Attorney

Commercial landlords need qualified, knowledgeable legal representation to ensure their best interests are protected. If you need guidance for your commercial real estate business, turn to the experienced Tarrant County, TX commercial real estate attorneys at Cain & Kiel Law. Schedule a consultation by calling us at 817-645-1717.