Rental guarantee deposit ( provision 36 of the Urban Rentals Act)
What: When signing the contract and by legal imperative, the tenant needs to hand over to the landlord a cash rental deposit of
How much:-one month’s rent for permanent use ( housing) rentals
-two months´rent for seasonal use or temporary contracts
This deposit amount can be updated once the first five years of rental life has passed.
Why:in order to guarantee any damage caused in the property by the tenant. The damage needs to be proved as not being the consequence of the habitual use of the house.
Refundable: This cash will be given back to the tenant once the house is given back in perfect state after the renting period.
If damages have been caused, the cost of the repair of these will be deducted from the deposit amount.
This deposit cannot be used to pay rental instalments.
The deposit can be asked back if not given to the tenant after the letting, interests will be charged once one month has passed and the deposit has not been refunded.
Rent
How much: Rent is freely agreed by parties. The landlord can never ask for advanced payments of more than one month.
During the first 5 years of contract, the rent will be updated according to the Consumer Price Index (IPC) published by the National Institute for Statistics. After those first five years, the updating can be done in a different way, but generally this IPC index is used after the first 5-years period too.
The updated rent needs to be communicated to the tenant and will be requirable one month after this communication.
When: Unless a different thing is accepted by the parties, the rent is paid in a monthly basis and must be done within the first 7 days of each month.
How and where: Rent payment can be done where and how the parties agree. If nothing is stated in the contract regarding this, the payment must be done in cash and at the rented house.
A receipt must be given to the tenant, unless the payment can be proved by a different means (i.e. Bank transference receipt).
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