Security deposit

In practice, the deposit is a form of guarantee that serves to protect the landlord in the event of non-compliance by the tenant, as well as to ensure compliance with contractual obligations by the tenant.

In the real estate context, the deposit is usually a sum of money that the tenant pays to the landlord when signing the lease. The value of the deposit may vary according to the contract conditions and real estate market practices, but it is common for it to correspond to 1 or 2 months of rent. At KW - Keller Williams the security deposit is one and a half rent.

The deposit is a guarantee for the landlord that, in the event of default by the tenant, he will be able to recover the amount corresponding to the damage suffered. For example, if the tenant does not pay the rent or damages the property, the landlord can use the deposit to cover the resulting expenses.

On the other hand, if the tenant fulfills all his contractual obligations, the deposit will have to be returned at the end of the contract .

In what situations can the tenant lose the deposit paid?

Although the deposit only serves as a contractual guarantee, there are situations in which the landlord can withhold part or all of the deposit to cover damages:

• If the tenant withdraws from the contract before the established deadline, without mutual agreement ;
• If the tenant leaves the property in poor condition , or any object is missing, or some equipment is not in the state in which the tenant found it, at the beginning of the contract;

What kind of guarantees can be used as an alternative to collateral?

In addition to the cash deposit, there are other forms of guarantee that may be required in lease agreements, such as a guarantor, a security deposit or the request for advance rents .

• O fiador é uma pessoa indicada pelo arrendatário, que se responsabiliza por garantir o cumprimento das obrigações do inquilino, caso este não esteja em condições financeiras de o fazer.
• O Seguro Caução é um produto financeiro que funciona como uma garantia, prestada por uma seguradora, e que garante o bom cumprimento de obrigações contratuais assumidas pelo inquilino perante o senhorio. O Seguro Caução tem custos para o arrendatário, que poderá rondar os 2% a 5% do valor do negócio. 
•  O senhorio pode ainda pedir 1 ou mais rendas antecipadas, a serem liquidadas na celebração do contrato de arrendamento.

Valor das garantias e respetivo enquadramento legal

Em Portugal, a lei define algumas regras sobre garantias em contratos de arrendamento. No artigo 1076.º do Código Civil, vem indicada a possibilidade das partes poderem caucionar, através de qualquer uma das formas legais admitidas, o cumprimento das obrigações.

There are two ways to do this, which can coexist simultaneously: the deposit (the value of which is normally imposed by the landlord, equal to 1 or 2 months of rent) , or the request for up to 3 rents in advance.

1. Payment of rent may be made in advance, subject to written agreement, for a period not exceeding three months.
2. The parties may guarantee, by any of the legally provided forms, the fulfillment of the respective obligations.

That is, the number of advance rents cannot exceed three.

In addition, the landlord has a period of 20 days to return the deposit to the tenant after the end of the contract, under penalty of paying compensation for damages.

As for the "n" advance rents, they will be discounted in the last "n" months of the contract. If the tenant does not comply with the contract until the end, the landlord has the right to withhold both the amount of the rent in advance and the amount of the deposit, until the amount owed, which the tenant would have to pay, if he fulfilled the contract. until end.

The guarantees in an Affordable Lease agreement

In order to provide greater security and stability to lease contracts, the Government approved Decree-Law No. 69/2019, of May 22 , which establishes the mandatory insurance regime for affordable leases.

In the PAA - Affordable Lease Program, it is mandatory to take out insurance that is called "Affordable Lease Insurance" and which includes the following guarantees:

• Compensation for non-payment of rent (to be contracted by the landlord);
• Compensation for involuntary loss of income (to be contracted by tenants);
• Compensation for damages to the rented property (to be contracted by the tenants). This insurance can be replaced by a deposit of up to 2 months of income. In this case, at the time of submission of the lease contract for inclusion in the Affordable Lease Program, a statement justifying the waiver of this guarantee and the respective proof of the security deposit must be presented.

The following are exempt from this obligation:

• tenants who are " students or dependent trainees ", however and alternatively, it is mandatory to present a guarantor;
• the landlord if all tenants are “dependent students or trainees”.

This insurance, which is the responsibility of the tenant or landlord, is mandatory when signing the lease, as well as maintaining it during the term of the lease.

Despite the rules established by law, it is important that the parties involved in a lease are aware of contractual clauses and real estate market practices. Before signing a contract, it is essential that both parties are aware of their rights and duties, as well as the required guarantees. In this way, it will be possible to avoid conflicts and ensure a healthy relationship between landlord and tenant.