The rental property supply has decreased since the Housing Law came into effect. Interventionist measures and the legal uncertainty faced by landlords have weakened the market. Therefore, many landlords are seeking guarantees from prospective tenants, such as a deposit. Is this legal?
Is it legal to pay a reservation fee for a rental property?
It's completely legal. You can reserve a rental property by paying a deposit. The usual deposit amount is around €300 or €500, although it depends on the monthly rent. This will be deducted from the first month's rent.
In addition to paying the reservation fee, remember that to move into a property as a tenant, you need to have enough capital to pay:
- One month's deposit
- The current month's rent
- In addition, they could ask you for up to two more months' rent as an additional guarantee or request that you provide the name of a guarantor.
For a reservation contract to be legally valid, both parties must sign it. It must also clearly state the terms and conditions, the amount paid, the deposit return policy and any penalties for non-compliance.
If the rental agreement goes through, the reservation fee is deducted from the rent. On the other hand, if the tenant backs out, they could lose the money; if the landlord breaches the reservation agreement, they might even have to pay double.
Illegal practices
If the real estate agency asks you to pay for a viewing, it's illegal. It's also illegal for them to try to charge you a commission as a tenant. Management fees are the landlord's responsibility.
Article 20 of the Urban Leases Law (LAU) establishes that "real estate management expenses and those for formalising the rental contract will be borne by the landlord."
How to make your tenant profile stand out
Landlords often use a deposit payment to screen prospective tenants, as it suggests they have sufficient funds. In addition to being proactive and providing all the required documentation (that doesn't compromise your privacy), you can enhance your profile with a non-defaulting tenant certificate. This document certifies that you have no outstanding payments to other landlords and that you are not listed on the defaulting tenant register.
Can a deposit contract be used to reserve a rental property?
Yes, the law allows it. The consequences of breaching the agreement depend on the type of "contrato de arras" (deposit contract) chosen. You can find all the types of deposit contracts in this article.