Rental Deposit: What It Is and How It Works (2026 Guide)

Renting a home is one of the most common real estate transactions in Spain. One of the key elements that both tenants and landlords must properly manage is the security deposit. This financial guarantee, which covers the lease term, is legally required in most contracts, and proper handling of it can help prevent future disputes.

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 registered, and under what conditions it is returned is essential for both parties. In this article, we take an in-depth look at the key aspects of rental security deposits, including recent legal updates, return deadlines, and practical guidance for tenants and landlords.

What is a rental security deposit?

A rental security deposit is an amount of money paid by the tenant to the landlord as a guarantee against potential damage to the property or unpaid rent. This deposit is refundable at the end of the lease, provided there are no outstanding debts or damages attributable to the tenant.

In Spain, its primary regulation is established in the Urban Leases Act (LAU), which sets out the conditions for the deposit, its registration, and its return.

How does it work?

The rental security deposit is a protection mechanism for the landlord, but it also safeguards the tenant’s rights.

The purpose of the security deposit is to guarantee payment of rent and compliance with the lease terms. It protects the landlord in case of unpaid rent or damages to the property. If the tenant causes damage beyond normal wear and tear, the landlord may deduct the repair costs from the deposit. It also ensures compliance with contractual obligations. For example, if the tenant leaves unpaid utility bills or community fees, the landlord may retain the corresponding amount from the security deposit.

The rental security deposit is refundable. As long as there are no breaches of contract, the tenant is entitled to recover 100% of the deposit at the end of the lease. This amount must be deposited with the appropriate public housing authority. The landlord is legally required to register it in the tenant’s name and cannot keep it in a private account. In some autonomous communities, the deposit generates annual interest, which must be paid to the tenant.

The security deposit is different from other additional payments, such as the last month’s rent or other supplementary guarantees. Although the law requires only one month’s deposit for primary residences, landlords may request additional guarantees. These must be justified and agreed upon by both parties. The security deposit is also different from a bank guarantee, which may sometimes be required in addition to the deposit. They are separate legal concepts.

When and how is the security deposit paid?

It is typically paid at the time the lease agreement is signed. The security deposit is usually delivered along with the first month’s rent and, in some cases, administrative or agency fees if a real estate agency is involved.

It is recommended to use secure payment methods to avoid potential issues, such as bank transfers made to an official, designated account. A receipt or proof of payment should always be requested and should include key details such as the deposit amount, the date of payment, and the bank account where the funds were deposited.

If the landlord does not provide a receipt, the tenant may request written confirmation of payment. If the landlord refuses, it is advisable to keep the bank statement as proof of payment.

Regarding the deadline for the final deposit, the landlord has a maximum of 30 days to register the security deposit with the relevant public housing authority, such as IVIMA, AVRA, or INCASÒL. If the landlord fails to do so, the tenant may file a complaint.

You may be interested in: temporary rental agreement.

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How much will be required in 2026?

The legally required amounts vary depending on the type of lease agreement. For a primary residence, the minimum security deposit is equal to one month’s rent. However, additional guarantees may be requested depending on the autonomous community, such as in Madrid or Catalonia, where parties may agree to up to two months’ deposit for residential properties.

In the case of commercial premises, the minimum security deposit is currently two months’ rent, and no more or less may be required unless otherwise agreed upon by both parties.

If the landlord requests more than the legally permitted amount, the situation should be evaluated. If there is no valid legal justification, the tenant may file a complaint with the housing authority in their autonomous community.

Where is the rental security deposit held?

According to the law, the landlord must deposit the security deposit with the appropriate public housing authority in the autonomous community where the property is located.

In Andalusia, the responsible agency is AVRA; in Catalonia, deposits must be made with INCASÒL; 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 lease agreement. If the landlord fails to deposit the security deposit with the designated public agency, the tenant may claim its return with interest.

Who is obligated to pay it?

The tenant is responsible for paying the security deposit. This does not relieve the landlord of their obligation to register the deposit with the relevant public authority, and the tenant may request proof that the deposit has been properly filed.

The landlord’s obligations include depositing the security deposit with the appropriate public housing authority within 30 days and returning it at the end of the lease, provided there are no damages or outstanding debts.

In special cases, such as subletting, the subtenant typically pays the deposit to the original tenant. In shared housing arrangements, each tenant pays their proportional share of the deposit.

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

The security deposit must be returned within a maximum of one month from the date the keys are handed over, provided there are no outstanding rent payments, no damage to the property, and all utility bills have been settled.

The return process is as follows:

First, the tenant must notify the landlord or managing agency of their departure. An inspection of the property is then carried out. If everything is in good condition, a request is submitted to the relevant authority where the deposit was registered to process the refund.

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

The landlord may retain the security deposit if there is damage to the property beyond normal wear and tear, if there are outstanding debts (such as unpaid rent, community fees, or utility bills), or if the tenant vacates the property before the agreed-upon term without proper notice.

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

Tips to Avoid Problems with the Security Deposit

For Landlords

The landlord must deposit the security deposit with the appropriate public housing authority to prevent incurring fines or penalties. A detailed inventory should be completed when the tenant moves in and out of the property. The landlord must document any repairs with invoices and estimates and return the security deposit within a maximum period of one month to avoid potential claims.

For Tenants

The tenant should always pay the rent by bank transfer, never in cash or without a receipt. In addition, the tenant should inspect the property upon moving in and moving out, sign a condition report, and request proof that the security deposit has been properly registered. It is also advisable to report any damage in writing to avoid being held responsible later.

You may be interested in: Renting Without a Contract and Without Receipts.

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Frequently Asked Questions (FAQs)

Is it legal to request 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 claim interest on the deposit (3% per year).

How long does the administration take to return the deposit?

Between 15 and 30 days from the date of the request.

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

The landlord may retain the deposit as compensation, unless the tenant provided at least 30 days’ notice, where required.

What happens if the deposit is not returned?

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 understand their rights and obligations to avoid potential disputes. It is always advisable to document everything in writing and ensure that the deposit is properly handled. If you have any doubts, consult a legal advisor or the housing authority in your Autonomous Community.