The above payment of the rental deposit is one of the most questions asked , both by owners and tenants. In this blog we will try to clarify everything as possible.

01Deposit for long term rentals

AWhat is a deposit?

A deposit is a sum of money that the tenant agrees to pay to landlord before moving into the house (usually at the time of signing the contract by both parties). The deposit is usually a month´s rent if the property is going to be allocated to housing, it is two months if it is destined for a different use, according to the Urban Leasing Law (LAU), in Article 36 of Chapter IV.

Apart from the deposit the additional payment of another amount can be arranged as a guarantee. The deposit serves to guarantee the fulfilment of the obligations of the tenant and also helps protect against damage to the property.

In Andalusia all rental guarantees must be sent to the Regional Government of Andalusia within a maximum period of one month from the signing of the contract. The owner must enter the deposit using Model 806 of the Junta de Andalucía. You can download it by following the link below:

http://www.juntadeandalucia.es/economiayhacienda/apl/surweb/modelos/modelo806/806.jsp

BUpdate on deposit

The deposit cannot be updated during the first three years of the contract. It may be increased or decreased according to agreement between the parties until the amount is equal of the monthly rent.

CAdditional guarantee to the deposit to ensure the collection of monthly payments.

To ensure compliance with the obligations of the tenant, the owner can demand an additional guarantee apart from the deposit. This amount like the deposit can be used to cover defaults and damages or damage to the property.

• Guarantees (banking and personal), insurance and deposits.

  The bank guarantee is an amount agreed by both parties that will be deposited in a bank. A guarantor is a third party person or a firm who will guarantee the tenant's fulfilment of rent. Rental insurance is a policy for which the owner (insured) would be covered in the event of non-payment and damages. The deposit is an amount agreed by both parties that will remain the owner

• How much can I ask for a guarantee? Where is it regulated?

  There is no amount set by law. It is possible to agree freely between both parties.

• Where should it appear in the contract?

  Any type of guarantee must appear in the rental contract as "Guarantee"

• Where is it deposited?

  The money is not deposited to any official body.

DRefund of the deposit

• When is it returned

  The deposit is returned when the owner has inspected the property to verify that there is no damage. Once this has happens and there are no non-payment of suppliers then it can be kept for a maximum period of one month.

• Losts of deposits

  According to article 217 of the Civil Procedure Law, it is the landlord´s responsibility to prove there is damage to the property.

• How to claim the deposit

  If there is no damage to the property and all obligations have been fulfilled by the tenant; the tenant must wait 30 days after keys have been returned. It would be advisable to give notice of court procedure to the landlord if the deadline has passed. In addition after 30 days the amount of the deposit will begin to generate interest.

02DEPOSIT FOR HOLIDAYS RENTAL

Decree 28/2016, of 2 February, on housing for tourism purposes in its chapter 1, article 1, establishes that rents for a time longer than two months to the same person will be outside of the rule. As explained above about the deposit for long term rental, if the holiday rental is (less than 2 months) there is no obligation to pay a deposit.

APrice and reservation, but NEVER deposit

• Conditions of price and reservation.

  The price of the holiday rental will be fixed per night and must include the consumption of water supplies, electricity, heating, refrigeration, bed and bath linen, household goods and final cleaning.

  All the conditions on the price, reservation, cancellations ... will be agreed between the parties, but if nothing was agreed, it would be governed by the following:

• Reservation:

  The tenants must pay a reservation fee (advance) up to a maximum of 30% of the total stay.

• Cancellation and Penalties:

  If the tenant cancels the reservation, they are entitled to a refund of at least 50% of the reservation and it occurs ten days before the arrival date. If occurs less than ten days from the date of entry, the tenant will not be entitled to any refund.

  If the owner cancels the reservation, they must return the reservation fee if it´s before ten days of the arrival date. Less than ten days from the date of entry, the owner has to return the reservation fee and in addition, the owner must compensate the tenant with 30% of the total price of the stay.

  In any case, if the cancellation of the reservation was for reasons of force majeure, there will be no penalty for any of the parties.

BSecurity deposit

It is an amount the owner asks to cover possible damages caused during the stay. The amount is fixed by the owner and will be lower or higher depending on what things are in the property and the duration of the stay.

The security deposit will be refunded after checking that everything is in good condition on the property.

As a complement to this article, we wrote another one about the long term rental in which we also talked about many other things besides the deposits. The article is called "How do I put my house on the rental market?" and it may be of interest for you to read.

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