Real Estate

Security deposits in Italian rentals

Posted on 02/05/2013

Home moneyEvery single agreement has rights and obligations of which both parties must be aware of. Talking about rentals of Italian houses, we have the same situation.
In order to estabilish tenant’s responsibilities to the landlord and to other tenants, and vice-versa, landlord obligations and rights, we must consider that tenancy in Italy is regulated by l. n. 392/1978 (the ‘Fair Rent’ Act) and l. n. 431/1998, and, however, it is based on the rental agreement.

In general, the landloard should maintain the property the tenant is renting so that the property will be a safe, decent, and healthy place for the tenant and his/her family to live.
On the other side, the tenant should regularly pay monthly rent, and ensure that the condition of the premises at the time of vacating should be same as at the start of tenancy.
In order to ensure landlord in case of unpaid licensee fees, in case of damage to the apartment or, in general, failure by the tenant to comply with the agreement (such as moving out before the lease ends), landlords usually ask the tenant to pay an amount of money, – usually known as “security deposit” -, at the time the lease is signed.

So, every rental agreement has a clause like this: “The Lessee shall pay to the Lessor an interest free security deposit amount of € … as equivalent to three months rent as security to the lessor, which will be refunded at the time of vacating and handing over possession of the said premises to the Lessor, after deducting arrears of the water, Electricity, Sewerage bill or the cost of any damage to the property, etc.”.

Before signing a lease, we must be aware of this clause, so it’s important to know that, according to Italian law (art. 11, act n. 392/1978), landlords are forbidden to request payment of security deposits amounting to more than three months’ rent.

Anyway, the violation of this law has not been sanctioned by any nullity, except that, just as provided by art. 13, Act No. 431/1998, this stipulation is not even indirectly aimed at recognizing the landlord a fee greater than that resulting from the contract.

The deposit can be paid in cash, but nothing prevents the lessor to claim a bank guarantee.
The deposit is given back with legal interest (minus any deductions for repairs/restoration) at the termination of the contract, not before that moment