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The Security Deposit, Terms & Conditions When Renting a Property in Madrid

“Spain is different”. Rentals are a good example: Everything is negotiable or nearly, depending on the market. In a rental, all the conditions depend on the agreement you reach with the landlord. When you negotiate these conditions, it is essential you have in mind the law and the norm: yes, in Spain they are often different.
In this post, I will sum up the security deposit and other conditions you can expect so you can get the best deal and negotiate with landlords effectively.

First of all: the law. In Spain, there is a standard law for rentals: “La Ley de Arrendamientos Urbanos”. If you know some Spanish, you can review it here. Here’s the summary:

  • The 1st year is mandatory for both parties,
  • After the 1st year, the tenant can take the decision to leave, after warning the landlord 30 days in advance,
  • The landlord cannot end the contract before the 5 years have passed,
  • The legal amount for a security deposit is 1 month’s rent, 2 month’s rent if furnished.

Now, on top of this, many terms of the agreements can be freely defined by the parties. In Madrid, this means that landlords require the following:

  • More money on top of the legal security deposit – it’s called “Additional guarantee”,
  • More time on top of the legal 30 days to warn the landlord you’re leaving,
  • The tenant can leave at any time after the 1st year, whereas the law only indicates at every yearly renewal.

In terms of security deposit & additional guarantee, here’s what you will see in the market in total (legal deposit + additional guarantee):

  • For flats, on average, 2-3 months in total, but many landlords ask for up to 8 months.To be negotiated.

Many landlords now ask for “bank guarantees” or “aval bancario”. This means that you have to put the amount of the additional guarantee in a specific bank account, on which you will have to pay 3% risk commission a year. The landlord will have rights to access to this account if anything was to happen.

My opinion is that 2 months in total is reasonable and fair, especially for a furnished flat. 3 months is still acceptable, and if the landlord asks for more than this, then the deposit should be negotiated.
You can negotiate the deposit the following ways:

  • Demonstrating you have a “good profile”: risk-free stable income on the long term, which is at least 3 times superior to the rent.
  • Switching advance payment with security deposit,
  • Having another flat you could rent which asks for less security deposit,

You will find here a 2 page summary of the conditions of rental contracts in Spain, in the order and format of legal Spanish rental contracts.
If you need help to move to Madrid zen, do not hesitate to send us an email !
Madridly yours,
+Pierre-Alban Waters

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This post is also available in: French, Italian

Posted on Wednesday, January 9th, 2013 by in Flathunting

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