The rental deposit is another element in the lease agreement that affects the tenant.

Rental security deposit in Madrid: Features

Article 36 of the Ley de Arrendamientos Urbanos 2/1994 refers to the rental security deposit, stating that the parties may agree on any type of guarantee for the fulfillment of the tenant’s obligations, in addition to the mandatory rental deposit, or “Fianza.”

The purpose of the deposit is to ensure the compliance with the term of the contract. If the tenant does not comply with the contract in general, that money could be kept by the landlord of the property.

Another fundamental reason why the landlord makes use of this legal figure, though it is not mandatory, is that in this way it doubles its security against any possible inconvenience, such as damage to the property or non-payment of rent.

Deposit is not the same as bail (Fianza)

The security deposit is regulated by the Urban Leasing Law (LAU) and is mandatory. Its amount is one month’s rent for permanent residences and two months for non-residential uses.

In contrast, the rental deposit is not stipulated by the LAU and is an amount to be agreed upon between the parties, with no specific limit. The deposit is held by the property owner and does not need to be submitted to any official body of the autonomous community.

For this reason, we recommend that you read this article on the difference between a mandatory and security deposit.

Deposit Amount in a Primary Residence

Security Deposit in a Primary Residence

• Requirement: The security deposit is mandatory by law.

• Amount: One month’s rent for primary residence contracts.

• Purpose: Serves as a guarantee to cover possible unpaid rent or damages to the property.

• Management: The landlord is required to deposit it with the housing authority of the autonomous community (for example, in Madrid, the Social Housing Agency).

• Refund: Returned to the tenant at the end of the contract, once it has been verified that there are no debts or damages.

Additional Deposit or Guarantee

• Requirement: The deposit is optional and agreed upon between the parties.

• Amount: The Urban Leasing Law (LAU) allows landlords to request up to a maximum of two additional months’ rent on top of the security deposit.

• Purpose: Provides extra protection to the landlord against possible breaches by the tenant.

• Management: The landlord holds it directly, with no obligation to deposit it in any official body.

• Refund: Returned to the tenant at the end of the contract, once it has been verified that there are no issues.

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Deposit Amount in a Seasonal Rental

Additional Deposit or Guarantee (Optional)

This is where the difference is most noticeable.

• Freedom of agreement: In seasonal rental contracts, the Urban Leasing Law (LAU) does not establish a maximum limit for additional guarantees. This means that the landlord and tenant are free to agree on an additional deposit or guarantee on top of the security deposit.

• Conditions: The conditions of this additional deposit must be clearly specified in the contract. It is most commonly used to cover possible damages to the furniture, unpaid rent, or any other type of breach.

• Management: As in primary residence contracts, the landlord holds the deposit, and it does not need to be deposited with any official body.

• Refund: Returned to the tenant at the end of the contract, once it has been verified that all agreed obligations have been met.

At DFLAT Madrid, we know from experience that, for seasonal contracts of 12 months or less, an amount equivalent to 2 months’ rent as a deposit is appropriate and sufficient. DFLAT reduces this by half for stays of 6 months, in line with the rule of proportionality.

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Refund of the Deposit

The amount paid as a deposit is reimbursed to the tenant after the end of the rental contract, provided that none of the following situations apply:

• Early termination of the rental contract

• Pending amounts or debts (rent or utilities)

• Failure to maintain the property in the same condition in which it was delivered

What extra security does DFLAT Madrid offer?

The best guarantee is to have access to the best customer and the best owner.

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