The tenancy agreement is coming to an end: what happens to the security deposit?
The end of a tenancy often gives rise to two recurring disputes. The tenant who refuses to pay the final month’s rent ‘because the security deposit covers it’, and the landlord who returns the security deposit after deducting amounts for items that are not always deductible. Both positions are usually incorrect.
The security deposit is not the final month’s rent
The statutory security deposit is a guarantee of compliance with the contract, not an advance on rent. It is equivalent to one month’s rent for residential tenancies and two months’ rent for non-residential tenancies, and the landlord is obliged to deposit it with the relevant regional authority, which in Catalonia is the Institut Català del Sòl.
Failing to pay the final month’s rent on the assumption that the deposit will cover it constitutes non-payment of rent, with the consequences that this entails, and does not prevent subsequent disputes over damage to the property.
When it must be returned
At the end of the tenancy and once the keys have been handed over. The Urban Tenancies Act stipulates that, if one month has elapsed since the keys were handed over without the balance having been refunded, the amount will accrue statutory interest.
That one-month period is for returning the deposit, not for starting to think about it. And it is not conditional on the landlord recovering the deposit from the regional authority, which is a matter between the landlord and the authorities and not the tenant’s problem.
What may be deducted
- Unpaid rent or similar sums.
- Outstanding utility bills relating to the period of occupation.
- Damage caused by the tenant or by people living with them, beyond normal wear and tear.
- Building work carried out without the landlord’s consent, where the landlord chooses to demand that the property be restored to its previous condition.
What cannot be deducted
Wear and tear resulting from the ordinary use of the property. The tenant is liable for any damage they cause, not for the natural passage of time. Paint that has worn away after several years of occupation, the normal deterioration of a floor, or the ageing of household appliances supplied with the property are not considered attributable damage.
Nor, as a general rule, is the cost of routine cleaning on moving out deductible, unless the tenancy agreement expressly provides for it or the condition of the property is manifestly abnormal.
Evidence is almost everything
Most of these disputes are resolved by who can prove the condition of the property. Two recommendations to save both parties any trouble:
- Draw up an inventory with photographs dated at the start of the tenancy and another upon handover of the keys, signed by both parties.
- Document the handover of the keys in writing, with the date, as the one-month period is calculated from this date.
If they are not returned
A prior written claim, with acknowledgement of receipt, should be made, claiming the principal sum and interest. If there is no response, the next step is to bring a legal claim, which, in the case of small claims, may be dealt with through summary proceedings.
