Rental deposit in Madrid: how much they can ask for and how to get it back

The deposit (fianza) is the money you hand over when you sign the contract to guarantee you will comply: that you will pay the rent and return the home in good condition. It is not a payment to the landlord: it is yours and, if all goes well, it must be returned to you.

For residential leases, the Urban Leases Act (LAU, article 36) sets the deposit at one month's rent, in cash. No more, no less. If what you rent is not a home (an office, a shop), it is two months.

During the first five years of the contract, or seven if the landlord is a company, the deposit is not updated even if the rent goes up. After that, at each renewal, it can be adjusted so it still equals one month of the current rent.

On top of the deposit, the landlord may ask you for an additional guarantee: an extra deposit, a bank guarantee or a guarantor. This is legal, but it has limits.

• In residential contracts of up to five years (seven if the landlord is a company), the additional guarantee cannot exceed two months' rent.
• In seasonal (short-term) rentals, it cannot exceed one month.
• They cannot force you to take out rent default insurance or similar cover.
• Agency and contract-drafting fees cannot be passed on to you, directly or indirectly.

An important nuance: the ban on rent default insurance and the one-month cap for seasonal rentals come from Royal Decree-law 29/2026, in force since 8 October 2026. A decree-law must be ratified by Parliament, and the previous one of this kind was repealed. If your contract is older or you are signing in the coming weeks, it is worth checking which wording applies to you.

If they ask you for six months in advance «as a guarantee», or a two-month deposit plus three months' extra security, do not sign without asking first.

In the Community of Madrid, the landlord cannot simply keep the deposit: it must be lodged with the Social Housing Agency (Agencia de Vivienda Social). The deadline is 30 days from signing the contract, and late lodging incurs a surcharge.

As a tenant you can ask the Agency to certify whether your deposit has been lodged. All you need is an application and a copy of the contract, and it can be done in person by appointment, at a public registry office or online. That certificate can also help you claim the rental deduction in your income tax return.

My advice: ask the landlord for the deposit receipt as soon as they have it. If they do not give it to you, ask the Agency yourself. It is a simple way of finding out who you are dealing with.

What you do on the day you move in largely decides whether you get your deposit back on the day you move out.

• When you move in, take dated photos and video of every room and send them to the landlord by a means that leaves a record.
• If there is an inventory of furniture and appliances, check it and note anything already broken or worn.
• When you leave, leave the home clean, hand over all the keys and ask for a document recording the condition in which you return it to be signed.

Under Royal Decree-law 29/2026, the law requires both parties to record in writing the condition of the home when the contract ends. If that document is not signed, or does not record any damage, it is presumed, unless proven otherwise, that you returned it in good condition.

The landlord may deduct from the deposit any rent or utilities you owe and damage beyond normal wear and tear. What they cannot do is keep the deposit to repaint the flat because it is due, or to fix what was already wrong when you moved in.

The law gives the landlord one month from when you hand over the keys to return your deposit. After that month, the outstanding amount accrues statutory interest in your favour.

If they do not return it, or deduct items you are not responsible for, these are the sensible steps:

• Ask in writing for the refund and a breakdown of any deductions, with invoices or quotes to justify them.
• If they do not reply, send a formal demand with proof of delivery, for example a burofax, giving them a deadline.
• If they still do not pay, you can go to court. There are simple procedures for small amounts, but it is worth knowing beforehand what evidence you have and what you can claim.

The better you have documented moving in and moving out, the easier everything will be.

I have been practising as a lawyer for more than fifteen years and I know the property sector from the inside. I only work for tenants and buyers: I take no commissions from landlords, developers or agencies, and nobody pays me to get you to sign.

If you have been asked for a deposit, extra security or a guarantee that seems excessive, or your previous landlord will not return your deposit, write to me before you sign or take any step. The first consultation is free and I will tell you honestly whether there is anything to claim and how to do it.

Further reading: what to check in your rental contract in Madrid and how much your rent can go up.