Security Deposit in Portugal: What Tenants Need to Know
What is a Security Deposit?
In Portugal, tenants are typically required to pay a security deposit at the beginning of a lease agreement, along with prepaid rent for a few months. This deposit is held by the landlord and returned at the end of the contract if the property is left in good condition.
Why Do Landlords Ask for a Deposit?
The deposit serves as a security measure for landlords, protecting them from any damage caused during the rental period. If you move out and the property is in the same condition as when you first rented it—no holes in the walls, broken furniture, or damage—your landlord will return the full deposit. However, if repairs are needed, the costs will be deducted from the deposit.
By law, the security deposit cannot exceed the equivalent of two months' rent. However, in practice, landlords often ask for two months' rent, but in some cases, especially when there is expensive furniture, appliances, or electronics (like TVs or sound systems), the deposit could be even higher. The amount depends on the landlord's level of caution and the value of the property.
Deposit and Contract Termination
It’s important to note that the deposit is only to protect the property. It has nothing to do with early termination of the contract. In some countries, landlords may keep the deposit if the tenant decides to terminate the contract early. However, this is not the case in Portugal. The deposit will always be refunded as long as the property is in good condition, regardless of when you leave the property.
Example of Deposit Use
For example, if you made holes in the wall without the landlord's permission, there are two options:
Option 1: You fix the holes yourself (patch and paint).
Option 2: Leave the holes as is and let the landlord repair them, with the cost deducted from your deposit.
How Much is the Deposit?
The deposit is often proportional to the quality of the property. If the apartment is well-furnished or newly renovated, the deposit will likely be higher. Typically, the deposit is equal to one to two months' rent, but sometimes it can be higher depending on the property. For instance, if the rent is €2,000 per month, the deposit might be €2,000, €4,000, or even more, depending on the landlord's preferences.
What Happens If There's Damage?
I once encountered a landlord who required a deposit equal to one month's rent. The previous tenants had a dog that caused significant damage to the floor by peeing on it. The deposit was not enough to cover the cost of replacing the floor. As a result, the landlord decided to increase the deposit to two months' rent for future tenants. However, he didn't specify "no pets" in his listing, and we were able to find new tenants with a well-trained Shiba Inu that only goes outside for bathroom breaks.