Deposit and Insurance Requirements

Information about the deposit and insurance required when renting a flat or house in Brazil...

When renting property in Brazil, the deposit (deposito) amount is typically between two and three months' rent. This is paid to the estate agent or owner, and used as security against breakages and damage to the property or unpaid rent.

The security deposit is required to be kept in a dedicated bank account. Any interest accrued on the deposit belongs to the tenant. It is possible to negotiate a situation where the deposit is kept in an escrow account rather than a landlord's account although this is not a legal obligation.

Another form of security, called a Título de capitalização (roughly translated as Savings Bond), can be used in certain rare cases where a Brazilian or foreigner has no proof of income, no recent living history in Brazil but holds permanent resident status, a CPF card and in the case of a foreigner, an RNE card.

The amount of the Título de capitalização is six months rent. The money is deposited in a bank, where it is used as security for the landlord in the event of non-payment. The money can earn interest and is returned in full at the end of the contract if all contract clauses are satisfied. This by-passes Brazilian rental agencies' strict demand for documents.

If a person rents directly from an owner, they may find that the owner opts for a shorter rental term than the 30 months normally agreed by estate agents; 12 months is usually agreed on by both parties.

In general, it is the owner and not the estate agency who will decide if they agree to accepting a Título de capitalização as a deposit and this method is only used in rare cases. There is no need for a guarantor in the case of a Título de capitalização.

Household Insurance and Certificates

Household insurance is required by law when renting an apartment or house in Brazil. The estate agencies usually have a preferred company that they use, and will arrange insurance on behalf of the tenant. Although the owner is obliged by law to pay fire insurance for a property, the rental contract may pass this obligation on to the tenant.

The cost of basic cover depends on the monthly rental value of the property. The price is quoted for the year and is paid together with the first month's rent.

Basic insurance plans may include fire and explosion cover; more complex household insurance plans can include (as well the basic cover) insurance against robbery and broken windows.

A tenant who rents directly from the owner must arrange their own property insurance. Before agreeing household insurance it is important to understand exactly what is covered, as this varies between companies.