Carlos E. Vallejo.

Today we remember a little about article 36 of the LAU regarding the deposit in urban rentals.

Obligation and amount.

At the conclusion of the contract, the requirement and provision of a cash deposit in an amount equivalent to one month’s rent in the rental of homes and two in the lease for use other than housing will be mandatory.

Update.

During the first five years of the contract, or during the first seven years if the landlord is a legal entity, the deposit will not be subject to updating. But each time the lease is extended, the lessor may demand that the deposit be increased, or the lessee decrease it, until it becomes equal to one or two monthly payments of the current rent, as appropriate, at the time of the extension. The update of the deposit during the period of time in which the term agreed for the lease exceeds five years, or seven years if the lessor is a legal entity, will be governed by the provisions of the parties. In the absence of a specific agreement, what was agreed on the update of the rent will also be presumed wanted for the update of the deposit.

Return.

The balance of the cash deposit that must be returned to the lessee at the end of the lease will accrue legal interest, one month after the handover of the keys by the lessee without such restitution having been made effective.

Additional guarantee.

The parties may agree on any type of guarantee of compliance by the lessee with their lease obligations in addition to the cash deposit. In the case of housing leases, in contracts of up to five years, or up to seven years if the landlord is a legal person, the value of this additional guarantee may not exceed two monthly rents.

Mandatory deposit of bonds in the public administration.

The autonomous communities may establish the obligation that the landlords of urban property subject to this law deposit the amount of the deposit regulated in article 36.1 of this law, without accrual of interest, at the disposal of the autonomous Administration or the public entity that appointed until the expiration of the corresponding contract. If after one month from the end of the contract, the regional administration or the competent public entity does not return the amount deposited, it will accrue the corresponding legal interest. So far everything is correct, you can see these different sections in the LAU. The aspects that I would highlight refer to the additional guarantee, that many landlords want to put in the contracts, they should know that a maximum of two monthly payments is the value.

In the event that there is a real estate agency marketing the property, it would be the two monthly payments from the landlord and the real estate agency fees that correspond to one month. Yes it is legal, but at the market level you demand too much guarantee from the tenant. It can also be a landlord strategy to filter profiles that really have financial guarantees to be able to rent the property.

Regarding the deposits of the bond in the corresponding public body. In most cases it is the community administration, which exercises this power. If the deposit is obligatory and in the event that there is a legal dispute between parties, certain judges value this obligatory nature of the deposit, being the cause that the judicial procedure cannot be initiated, without this requirement.

The Spanish reality tells us that 98% of landlords fail to comply with this mandatory deposit, waiving a subsequent legal dispute.

Although, in some legal proceedings, some of the parties may appeal this practice of the judge.