Deposit and damage when leaving a rented flat

The deposit is the amount you hand over to the landlord when you sign the tenancy agreement, which you get back when you leave the flat if everything is in order. Most disputes at the end of a tenancy come down to one question: is that mark normal wear and tear from use, or is it damage you have to pay for? The answer mostly depends on what you can prove. In this article we explain how to prepare from day one, how to hand back the flat, and what part your insurance can play.

What the deposit is and what it's for

For residential tenancies, the Spanish Tenancy Act (Ley de Arrendamientos Urbanos, LAU) requires the tenant to hand over a cash deposit when signing the contract. For housing, that statutory deposit is equivalent to one month's rent. In addition, the contract may include other supplementary guarantees, such as an extra deposit or a guarantor, within the limits set by law.

The deposit is there to cover anything the tenant owes when the contract ends: outstanding rent, unpaid utility bills, or damage to the property that goes beyond normal use. It isn't an extra payment or an advance on the last month's rent, unless both parties agree so in writing.

In many Spanish regions, the landlord must lodge the deposit with the body designated by the regional government. That's an obligation on the landlord; it's worth keeping the receipt if they give you one, and in any case the proof of what you paid.

Nothing that follows replaces advice from a solicitor or a consumer service. If your case is complex or a significant amount is at stake, consult a professional.

The inventory: your best defence starts on day one

The moment to avoid a dispute over the deposit isn't the day you hand back the keys, but the day you receive them. If there's no record of the flat's condition when you moved in, it will later be hard to prove that a stain, a scratch or a broken appliance was already there.

What it should include

• A list of the furniture, appliances and items belonging to the landlord, with their condition.
• The condition of the walls, floors, doors, windows, blinds, bathroom fittings and taps.
• Dated photographs or video, room by room, with close-ups of any existing damage.
• The meter readings for electricity, water and gas.
• The number of sets of keys and remote controls you receive.

Ideally, the inventory is attached to the contract and signed by both parties. If the landlord doesn't propose one, prepare it yourself, send it by a means that leaves a record (email or message) and ask them to confirm it. If you notice something in the first few days that you hadn't spotted, report it in writing as soon as possible.

Normal wear and tear versus damage

The law doesn't require the tenant to return the flat as good as new. What's expected is that you return it as you received it, apart from what has deteriorated through the passage of time and ordinary use. The line isn't always clear-cut, but there are useful guidelines.

Usually considered normal wear and tear	Usually considered damage
Slightly faded paint or light marks from furniture after years of use	Walls painted a different colour without permission, or with large holes and stains
Small scuffs on the floor in a walkway area	Flooring lifted by spilt, unmopped water, burns or deep impact damage
An appliance that breaks down through age	An appliance broken through misuse or an impact
Bathroom grout darkened over time	Broken sanitary ware or a damaged shower screen
Blinds with a worn cord	Blinds pulled out or slats broken

Two factors carry a lot of weight: how long you've lived in the flat, and the condition it was in when you moved in. Five years of use don't leave a home the same as six months, and a wall that was already worn can't be expected to look pristine.

Then there are the day-to-day minor repairs. The LAU assigns the tenant responsibility for small repairs required by wear from ordinary use, such as changing a light bulb or adjusting a tap, while repairs needed to keep the property fit for habitation generally fall to the landlord. If a significant fault comes up during the tenancy, report it in writing: it will help you when it comes to settling the deposit.

How to hand back the flat, step by step

1. Check the contract. Confirm the notice period you must give and how to communicate it.
2. Go through the entry inventory and compare it with the current condition. Fix anything reasonable for you to fix: picture hooks, light bulbs, grout.
3. Give it a thorough clean. A dirty property is one of the most common reasons for a deduction, and one of the easiest to avoid.
4. Cancel or change the name on the utilities that are in your name, and keep the last bill.
5. Take photos and video on the last day, following the same method as when you moved in.
6. Hand over the keys in person and ask for a signed document recording the handover date, the general condition and the meter readings. If that's not possible, keep written proof of the date and manner in which you returned them.
7. Request the return of the deposit in writing, giving your account number.

The LAU sets a time limit for the landlord to return the deposit once the keys have been handed over; if they're late, the amount may accrue interest. If the landlord deducts something, they must be able to justify it: ask for a breakdown of each item and the quotes or invoices for the repairs.

If there's a disagreement

When the landlord withholds all or part of the deposit and you disagree, it's worth following an order of steps:

• Reply in writing, with your entry and exit photos, explaining why you consider it normal wear and tear.
• Propose a reasonable solution. Often the dispute comes down to one or two items and is settled by agreement.
• If there's no agreement, go to your local or regional consumer services for guidance, or to a solicitor.
• Check whether you have legal expenses cover in any of your policies. Some include telephone assistance or claims related to renting; others expressly exclude them.

What part your insurance plays

It's worth being clear about this: no insurance covers normal wear and tear, and none replaces the deposit. The deposit covers what the landlord can claim from you; the insurance covers certain accidental events.

That said, tenant insurance can help in specific situations. If during the tenancy you accidentally cause damage to the property, for example a kitchen fire or a water leak that ruins the flooring, liability cover towards the landlord, if your policy includes it, can take care of it. That way the damage doesn't end up deducted from the deposit or claimed separately.

The key is to report the claim as soon as it happens, not at the end of the tenancy. Damage that suddenly appears when the keys are handed over is very hard to fit into a policy.

And if you're the one letting out your own property, remember that the deposit doesn't cover long-term non-payment or legal proceedings. That's what rent guarantee insurance is for, and on the blog you'll also find our piece on what to do when your tenant can't pay the rent.

Quick checklist

• Signed inventory with photos on entry.
• Faults and incidents reported in writing during the tenancy.
• Flat cleaned and small repairs done before leaving.
• Exit photos and a dated key-handover document.
• Written request for the return of the deposit.
• Written justification for any deduction.

How we help at Retuerto y Asociados

From our office in Santa Cruz de Tenerife, we review your policies so you know whether you have liability cover towards the landlord and legal expenses cover in case of a dispute. If you rent your home, take a look at our tenant insurance page, read about what's yours to insure and what's the landlord's, or get in touch and we'll go through it with you.