B2B Deposits and Guarantees of Commercial Premises in the Canary Islands

Formalizing a commercial lease (B2B) for a premises, office, or warehouse in the Canary Islands involves two distinct layers of security: the mandatory statutory deposit (fianza) and any additional contractual guarantees agreed upon by the parties. While commercial leases enjoy high levels of "freedom of contract," the handling of the initial fianza remains strictly regulated by the Canary Housing Institute (ICV).

1. The Mandatory Deposit: ICV and the "Two Months"

Under Article 36.1 of the Spanish Urban Leases Act (LAU), every lease for "use other than housing" (commercial) requires a mandatory cash deposit equivalent to two months' rent. In the Canary Islands, the regional government mandates that this sum must be placed in the custody of the Instituto Canario de la Vivienda (ICV).

• Amount: Exactly two (2) months of base rent (excluding IGIC).
• Deadline: The landlord has 30 days from the signing of the lease to formalize the deposit with the ICV.
• Third-Party Registry: Landlords must be registered in the Canary Islands Government's "Third-Party Creditor" system to process the deposit and eventual return.
• Sanctions: Failure to lodge the deposit is an administrative infraction. The ICV can impose surcharges ranging from 5% to 20% for late voluntary registration, or up to 100% plus interest if detected during an audit.

2. Additional Guarantees: The B2B Advantage

Beyond the mandatory two-month fianza, the parties are free to negotiate additional security measures under Article 36.5 of the LAU. Unlike residential leases (where additional guarantees are capped at two months), commercial leases have no statutory maximum.

• Bank Guarantees (Aval Bancario): It is common for landlords to request an unconditional bank guarantee covering 6 to 12 months of rent, especially for prime retail locations or tenants with limited credit history.
• Cash Deposits: Additional cash deposits beyond the mandatory fianza are permitted. These are held privately by the landlord (or in escrow) and do not need to be lodged with the ICV.
• Personal Guarantees: For small businesses or startups, landlords may require personal guarantees from the company directors.

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