Can the security deposit cover the final month’s rent owed under a lease agreement? That is the question many tenants ask themselves when it comes time to settle their account with their landlord and vacate the property. This is, of course, an understandable and common concern that we will address in the following post.
Can the security deposit cover the last month's rent or not?
Before explaining whether the final month’s rent can be used to cover the security deposit, let’s clarify that, in the Valencian Community, this matter is regulated by the Decree 46/2022. This decree sets forth the procedures for the security deposit system for urban property rentals in Valencia.
Under this regulation, a security deposit is required of the tenant; by making this deposit, the tenant provides the landlord with certain guarantees regarding damage to the property for the duration of the lease.
The amount typically required for this purpose is one month's rent in cash. However, if the amount is not specified in the contract, it is calculated based on 11% of the property's assessed value.
The Return of the Security Deposit
Under no circumstances is the security deposit an advance payment for the last month's rent. This may be specified in the lease agreement; however, the law is clear that the landlord must return all or part of the security deposit one month after the property has been vacated.
The security deposit is returned in full to the tenant if, upon the expiration of the lease, there are no damages to cover that were caused during their tenancy.
Otherwise, the remaining amount will be refunded to you after the repairs are completed. Keep in mind that the security deposit is not always equal to the final monthly payment; sometimes, the final payment is higher, so the security deposit does not cover it.
Similarly, the refund will depend on whether or not the tenant has failed to pay rent. In this case, the landlord has the right to keep this initial deposit as payment or part of it. The landlord, however, always has the option to consider a credit insurance as a safeguard against such problems.
Can the tenant seek compensation?
This exception does not apply in this case, since the obligation to pay the final month's rent arises while the lease is still in effect.
We already know that the amount of the bond is not a fixed, prescribed, or enforceable sum. For the offset to apply, we must wait:
The time of contract settlement, following the handover of the property.
Ensure that the condition of the returned property has been inspected to rule out any damage.
The landlord has paid the tenant's outstanding utility and condominium fees.
Thus, once the lease agreement has ended, the landlord has 30 days to return the security deposit after receiving the keys; this is sufficient time to determine any expenses or deductions based on the tenant’s obligations. Failure to meet this deadline results in the accrual of statutory interest as provided for in Article 36 of the Urban Lease Law.
Is specialized advice necessary?
When it comes to real estate matters, the regulations are very clear. In Alicante, there are many provisions that protect the rights of both tenants and landlords. Not familiar with them? That’s no problem; the professional and experienced team at Carlos Baños León Abogados specializes in real estate law and can provide you with expert advice on the matter.
