Security Deposits in Portugal: Limits and Return Laws

The security deposit (caução) plays an important role in Portuguese residential lease agreements as the landlord's financial protection against damage and arrears. Significant legislative changes in 2022 and 2023, culminating in the Mais Habitação program (Law No. 56/2023) which became effective on 7 October 2023, established clear statutory limits on deposit amounts. Landlords must ensure their practices comply with the updated framework of Law No. 24-D/2022 and Law No. 56/2023.

1. Statutory Deposit Limits: 2 Months' Rent

The 2-month cap on security deposits was introduced by two successive legislative acts:

1. Law No. 24-D/2022: First introduced the cap as an amendment to the Civil Code.
2. Law No. 56/2023 (Mais Habitação): Reinforced and confirmed the cap as part of the broader housing reform package.

NRAU Attribution Note: The 2-month cap should be attributed to Law 24-D/2022 and Law 56/2023 — not simply to the original NRAU (Lei 6/2006), which did not itself impose a specific numerical cap. Attributing the cap solely to "the NRAU" is legally imprecise and may cause confusion.

Combined Maximum Upfront Requirement:

• First month's rent: Payable at signing.
• Advance rent (antecipação de rendas): Maximum 2 months.
• Security deposit (caução): Maximum 2 months.
• Total maximum upfront: 5 months' rent (first month + 2 advance + 2 deposit).

Requiring any amount above these limits is unlawful and exposes the landlord to administrative penalties.

2. Permitted Deductions from the Deposit

The landlord may deduct from the deposit only documented and justified claims:

• Unpaid rent or outstanding fees.
• Unpaid utilities (water, electricity, gas) where the tenant was contractually responsible.
• Damage beyond normal wear and tear — documented in the move-out inspection report with photographic evidence and verified cost invoices.
• Excessive cleaning costs if the tenant left the premises in a condition substantially below what was received.

Prohibited deductions:

• Minor scratches, scuffs, or colour fading from normal everyday use.
• Gradual deterioration of painted surfaces or floor coverings from prudent use (Art. 1043 CC).
• Costs of upgrading or renovating the property for a new tenant.

3. Return of the Deposit: No Fixed Statutory Deadline

A critical point for compliance accuracy: Portuguese law does not stipulate a fixed number of days for the return of the security deposit.

• Art. 1076 of the Civil Code and the NRAU do not specify a "30-day" or "21-day" return period.
• Return must occur once the tenant's obligations are verified — meaning the landlord has inspected the property, assessed any damages, checked for outstanding utility bills, and confirmed outstanding rent is nil.
• Market practice: A 30-day return period is commonly included as a contractual term and is frequently cited in case law as a "reasonable" timeframe. However, this is market convention — not a statutory legal requirement.
• Jurisdiction: Disputes regarding the return of the deposit or disputed deductions are handled by the Julgados de Paz (Peace Courts) for claims up to €15,000 or the Tribunais Judiciais (Judicial Courts).
• Landlords who contractually commit to a 30-day period are bound by that contractual obligation, but in the absence of such a clause, the standard is "reasonable time."

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