Rent or bank guarantee

The landlord is entitled to require that the tenant put up a bank guarantee or make a blocked deposit in order to protect against any delays in payment of rent, against any damage to the property, or against any other debt arising from the lease. In order to minimize these risks, the lease may provide for and require a bank guarantee, the amount of which must be stipulated in the lease, and may not exceed three month's rent. There is no such limit with respect to commercial property.

Establishing the guarantee

The amount of the guarantee must be deposit in a bank, on a saving account or a deposit account. The account is in the tenant's name, and earns interest. The tenant or the landlord chooses the bank among financial institutions that are subject to the law on banks. Guarantees given directly to the landlord must be rapidly deposited in a bank account by him The tenant goes to the bank with some identification and the lease. In return, he will be given a document attesting to the garantee, a copy of which should be given to the landlord.

No-deposit guarantee

A rental deposit can represent a substantial amount of money (up to three month's rent). You may not have this amount, or you may need it for something else. In this case you may turn to private guarantee providers who will give the required guarantee without your having to deposit anything. There is a charge for this service but it lets you preserve your cash while at the same time providing a guarantee as with a classic deposit. To do this, you have to pay a one-time registration fee and an annual premium which will be a percentage of the rent guarantee.

Release OF the guarantee

At the end of the lease, the landlord will authorise the bank to release the guarantee. If not, the tenant can apply to the mediation authority, notify a payment order, and wait until one year after the expiration of the lease.
In case of disagreement with the landlord when he leaves the country, the tenant would be well-advised to alert his bank or the guarantee provider, as well as the Tribunal des Baux et Loyers (Leases and Rents Tribunal) giving them his new address. It is common for there to be delays between the release and the actual payment of the guarantee by the bank. Il you are not present, you may give power-of-attorney to a third party. 

The release of the guarantee can take place before the end of the lease if the landlord is owed money by the tenant, or it can be delayed if there is a problem with the "état des lieux" (see below). The bank will release all or part of the guarantee only on the following conditions: either the tenant authorises to the landlord, or the landlord has a court order or uncontested payment order.

Special cases

  • In case of a sublet (with the agreement of the landlord), the tenant may require a guarantee from the sub-letter in order to protect himself against risks of damage or non-payment of rent, which the tenant is responsible for to the landlord.
  • In case of a transfer to the lease, the person to whom the transfer is made will, with the agreement of the landlord, constitute a new guarantee in place of the one provided by the former tenant.