Rental Deposit: What It Is and How It Works 2026

Renting a home is one of the most common real estate transactions in Spain, and one of the key aspects that both tenants and landlords must manage correctly is the rental deposit. This financial deposit, which acts as a guarantee during the lease period, is a legal requirement in most contracts, and managing it correctly can prevent conflicts later on.

In a context where rental prices remain high in many Spanish cities, understanding how the security deposit works, how much must be paid, where it is deposited, and under what conditions it is recovered is essential for both parties. In this article, we will take an in-depth look at all the key aspects of rental security deposits, including the latest legal updates, return deadlines, and practical advice for tenants and landlords.

What is a rental deposit?

A rental deposit is an amount of money that the tenant gives to the landlord as a guarantee against possible damage to the property or non-payment. This deposit is refunded at the end of the contract, provided that there are no debts or damage attributable to the tenant.

In Spain, the main regulations governing this are set out in the Urban Leasehold Act (LAU), which establishes the conditions for deposits and their return.

How does it work?

The rental deposit is a protection mechanism for the landlord, but it is also a system that guarantees the tenant's rights.

The purpose of the security deposit is to guarantee the payment of rent, since if the tenant stops paying, the landlord can use the deposit to cover the unpaid months. It also serves to cover damage to the property, in which case, if the tenant causes damage beyond "normal use" of the property, the landlord can deduct the repair costs from the deposit. In addition, it ensures compliance with the obligations of the contract. For example, if the tenant does not pay the community fees or leaves utility bills unpaid, the landlord can retain part of the security deposit.

The rental deposit is refundable, meaning that as long as there are no breaches of contract, the tenant will recover 100% of the deposit at the end of the contract. This amount must be deposited with a public body; the landlord is required by law to deposit the deposit with the relevant body in the autonomous community and cannot keep it in a private account. In addition, the deposit generates interest in some autonomous communities, which is paid to the tenant on an annual basis.

The security deposit is different from other types of additional payments, such as the "month's deposit," and some landlords ask for two months' security deposit (one required by law and another as extra collateral), but this must be justified and accepted by both parties. The security deposit is also not the same as a "bank guarantee," as in some cases a bank guarantee or collateral is required in addition to the security deposit, but these are different concepts.

When and how is the deposit paid?

It can be at the time of payment, in which case the deposit is handed over when the rental agreement is signed, along with the first month's rent or, in some cases, with administrative fees (if a real estate agency is involved).

It is recommended to use secure payment methods to avoid problems, so it is essential to pay by bank transfer (never in cash, unless a receipt is signed). You should request a receipt or proof of payment and include details in the contract such as the amount of the deposit, the date of payment, and the bank account where it was deposited.

If the landlord does not provide a receipt, the tenant may request written confirmation of payment. If the landlord refuses to do so, it is recommended that the tenant keep the bank statement in a safe place as proof.

Regarding the deadline for the final deposit, the landlord has a maximum of 30 days to deposit the security deposit with the relevant public body (IVIMA, AVRA, INCASOL, etc.). If they fail to do so, the tenant can report the landlord.

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How much will be paid in 2026?

The legal amounts payable vary depending on the type of contract. Therefore, for a primary residence, the minimum deposit is equal to one month's rent, but more may be requested depending on the autonomous community, such as in Madrid or Catalonia, where it is permitted to agree on up to two months' deposit for homes.

In the case of commercial premises, the current minimum deposit is equal to two months' rent, and no more can be requested unless agreed upon by both parties.

If the landlord asks for more than the legal amount, the situation must be assessed, and if there is no valid justification for this (such as high property value), the tenant can file a complaint with the housing agency in their autonomous community.

Where is the rental deposit held?

According to the law, the landlord must deposit the security deposit with the relevant agency in the autonomous community.

In Andalusia, the responsible agency is AVRA; in Catalonia, deposits must be made to INCASOL; in Madrid, the designated agency is IVIMA; and in Valencia, it is AVIVA.

The deadline for depositing the security deposit is one month from the signing of the contract. If the landlord fails to deposit the security deposit with the designated entity, the tenant may then claim its return with interest.

Who is obligated to pay it?

The tenant is responsible for paying the security deposit. This is one of their obligations, along with ensuring that the landlord deposits the security deposit with the public agency, for which they can request proof of payment.

The landlord's obligations, on the other hand, include depositing the security deposit with the relevant agency within 30 days and returning the security deposit at the end of the contract, provided there is no damage or outstanding debts.

In special cases, such as subletting, it is the subtenant who pays the deposit to the original tenant, and in shared housing, each tenant pays their proportional share of the deposit.

When and how is the security deposit returned to the tenant?

The deposit must be returned within a maximum period of one month from the handover of the keys, provided that there are no outstanding rent payments, there is no damage to the property, and all utility bills have been paid.

The return process works as follows:

First, the tenant notifies the agency of their departure, then an inspection of the property is carried out, and if everything is in good condition, a request is made to the agency where the deposit was paid to return it.

In what cases can part or all of the deposit be retained?

The landlord may retain the deposit if there is damage to the property that goes beyond normal wear and tear, if there are outstanding debts, whether for rent, community fees, or utility bills, or if the tenant leaves the apartment before the agreed-upon time and without notice.

For example, if a window is broken and costs around €200 to repair, that amount should be deducted from the deposit.

Tips for avoiding problems with your security deposit

For homeowners

The owner must deposit the security deposit with the public agency to avoid incurring fines and claims. A detailed inventory must also be made when entering and leaving the property, with photos and a description of its condition. The owner must document any major repairs with invoices and estimates, and must return the security deposit within a maximum period of one month to avoid complaints.

For tenants

The tenant must always pay by bank transfer, never in cash and without a receipt. In addition, they must inspect the apartment when moving in and out and sign a condition report, and they must request proof of deposit of the security deposit. It is also recommended that they report any damage in writing to avoid being blamed for it later.

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Frequently Asked Questions (FAQs)

Is it legal to ask for two months' deposit for a property?

It depends on the autonomous community.

What happens if the landlord does not deposit the security deposit?

The tenant may file a complaint and demand the return of interest (3% per annum).

How long does it take for the administration to return the deposit?

Between 15 and 30 days from the date of application.

What should you do if the tenant breaks the lease early?

The landlord may retain the deposit as compensation, unless 30 days' notice is given.

What happens if they don't return the deposit?

You can file a claim through the courts (Small Claims Court).

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Conclusion

A rental deposit is a fundamental requirement in any lease agreement. Both tenants and landlords should be aware of their rights and obligations to avoid conflicts. It is always advisable to document everything in writing and ensure that the deposit is made correctly. If you have any questions, consult a legal advisor or the housing agency in your autonomous community.