Rental Deposits in the Canary Islands: Mandatory ICAVI Registration

Residential leases in the Canary Islands are strictly governed by the Spanish Urban Leases Act (LAU), which came into effect on 1 January 1995. Beyond national statutes, regional compliance is mandated by Decree 30/2006, requiring the formal deposit of guarantees with the Canary Housing Institute (ICAVI). Evading this system exposes landlords to significant administrative sanctions and interest penalties.

1. Statutory Limits and Additional Guarantees

The Urban Leases Act (LAU) establishes clear boundaries for financial guarantees that cannot be waived by private contract:

• Mandatory Legal Deposit (Fianza): For residential properties used as a habitual residence, the landlord must collect exactly one (1) month’s rent (Art. 36.1 LAU).
• Additional Guarantees: Any additional security requested must be documented as an "Additional Guarantee." For leases up to five years (or seven if the landlord is a legal entity), this additional amount is capped at two (2) months’ rent (Art. 36.5 LAU).

2. Mandatory Registration with ICAVI (Decree 30/2006)

Landlords in the Canary Islands are legally prohibited from holding the mandatory legal deposit in private accounts. The capital must be deposited with the regional administration:

• Competent Authority: The Instituto Canario de la Vivienda (ICAVI).
• Deadline: The deposit must be made within one month (30 calendar days) from the formalization of the lease agreement.
• Procedure:
  1. Registration as a third-party creditor with the Ministry of Finance.
  2. Monetary transfer to the General Deposit Box of the Government of the Canary Islands.
  3. Submission of the deposit certificate and lease copy to ICAVI.

3. Offenses and Penalties

Failure to deposit the fianza with ICAVI is a serious administrative offense under the Canary Islands Housing Law (Ley 2/2003).

• Voluntary Late Deposit: Surcharges of 5% to 20% apply depending on the delay.
• Non-Compliance via Inspection: Sanctions can range from 20% to 100% of the non-deposited amount, plus interest.
• Return of Deposit: Upon lease termination, the landlord has 30 days from the return of possession (keys) to refund the deposit. Beyond this period, the amount accrues legal interest (Art. 36.4 LAU).

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