Security deposit on an Italian lease: how much a landlord can ask and when it must be returned

The limit: three months

Article 11 of Law 392/1978 says the security deposit cannot be higher than three months' rent. A deposit of 2,400 euros, for example, is allowed for a monthly rent of 800 euros or more.

Interest

The same article 11 provides that the deposit earns statutory interest, which must be paid to the tenant at the end of each year. The rate is set every year by the Minister of Economy and Finance: 2.5% for 2024, 2% for 2025, 1.6% for 2026. On a deposit of 2,400 euros, a full year at 1.6% is 38.40 euros.

What the deposit is for

According to the Court of Cassation (order 194/2023, which refers to earlier decisions), the function of the security deposit in a lease is to guarantee the landlord that the tenant will meet all their obligations, legal and contractual, starting with payment of the rent, and it includes a guarantee of compensation for any damage, including lost profit.

How the property must be returned

Article 1590 of the Civil Code says the tenant must return the property in the same state in which it was received, in line with the description made by the parties, apart from deterioration or wear resulting from use of the property in line with the contract. If there is no description, the tenant is presumed to have received it in good repair. The tenant is not liable for loss or deterioration due to age. For this reason it is advisable to have, at handover, a description of the state of the property signed by both parties.

Can the landlord keep the deposit?

In order 194/2023 the Court of Cassation recalls that the obligation to return the deposit arises when the lease ends, and that the landlord can avoid returning it only by bringing a court claim for the deposit to be allocated, in whole or in part, to cover specific damage suffered or sums left unpaid. The same order held that the deposit could not be returned just because the property had suffered no damage, if the tenant had been ordered to compensate another loss, such as lost profit, and that a contract clause providing for return after the premises were properly handed back was not enough to justify return in that case.

By when must it be returned?

In the sources we read (Law 392/1978, article 1590 of the Civil Code, order 194/2023) there is no statutory deadline for returning the deposit: the obligation arises when the lease ends. If the contract sets a deadline, that applies. If you have doubts about your own case, ask a professional.

What this guide does not cover

This guide reads article 11 of Law 392/1978, article 1590 of the Civil Code, one order of the Court of Cassation and the decrees on the statutory interest rate. It does not examine other rulings, deposits held by an agency or in custody with a third party, or leases for uses other than residential.