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.
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