Lorraine Williamson
Andalucia has introduced a major change to its rental market. Under the region’s new Housing Law, tenants will no longer need to lodge their rental deposits with the Junta de Andalucía through the Agencia de Vivienda y Rehabilitación de Andalucía (AVRA).
Instead, landlords will now hold the deposit directly—a significant shift from the previous system, which had long provided a neutral safeguard for both tenants and property owners.
A fundamental change in rental deposits
Until now, AVRA acted as an independent intermediary. Tenants paid their deposits to AVRA, which kept the funds securely throughout the tenancy, refunding them at the end of the rental period if all conditions were met. This arrangement offered legal protection and peace of mind for both parties. In 2024 alone, tenants entrusted €73 million to AVRA under this system.
With the new law now in effect, that neutral oversight has been eliminated. Landlords will take full responsibility for holding and returning deposits, raising concerns over how disputes may be handled without official third-party involvement.
Why scrap the scheme?
According to the Andalucian government, the decision aims to cut red tape and simplify the rental process, encouraging more property owners to enter the market. By removing administrative barriers, officials hope to stimulate the supply of rental housing in the region.
Repaying €450 million will be a decade-long task
Ending the scheme has triggered the process of returning a vast sum of €450.5 million in deposits currently held by AVRA. Repayments will be made in annual instalments of €43 million, with the full process initially projected to take ten years. However, the Junta has indicated it is exploring ways to accelerate the repayments and potentially finalise them before 2030.
What it means for tenants and landlords
For tenants, the core obligation to pay a deposit remains unchanged. What differs now is who holds the money. Without the oversight of a public agency, some fear that disputes over deposit returns could become more contentious.
Landlords, meanwhile, now carry full responsibility for safeguarding the deposit throughout the tenancy. They must ensure funds are available for prompt reimbursement at the end of the lease—something that was previously guaranteed under AVRA’s stewardship.
The wider impact on AVRA and social housing
AVRA had not only acted as a deposit holder but also used the accumulated funds to support various housing initiatives. Revenue generated from the deposits helped finance the renovation of social housing and provided assistance to vulnerable groups in Andalucia. In 2024, AVRA’s deposits exceeded repayments by €30.6 million, generating significant funding for these projects.
With the deposit scheme dismantled, this financial mechanism disappears as well. AVRA staff previously assigned to managing the guarantee system will be reassigned to other roles within the organisation.
A new era for Andalucia’s rental market
This reform marks a significant departure from the long-standing system designed to balance tenant protection with landlord security. While the government believes the move will simplify renting and invigorate the market, others warn it may introduce new challenges in safeguarding tenant rights. As Andalucia moves forward with these sweeping changes, only time will tell how effectively the new system will function.
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