Rental Security Deposit in Uruguay: Who Can Hold Your Money and What the Law Says

INGAR · · Rentals

Rental Security Deposit in Uruguay: Who Can Hold Your Money and What the Law Says

This article grew out of a question from a reader — whose name we are keeping private — who wrote to us after an earlier piece on rental law. His question is one of the most common, and worst explained, in the market: when a tenant hands over a cash deposit, can the real estate agency keep it in its own bank account "in custody" until the contract ends?

The short answer is no, and here is why, with the law in hand.

This article is general information for the public, not legal advice for a specific case. For a particular situation, consult a lawyer or notary (escribano) who specializes in leases.

How much can be required as a deposit

When the parties agree on a cash deposit as a guarantee, the law sets a ceiling: it cannot exceed the equivalent of five months' rent for housing (ten for other uses). This is set out in Article 38 of Decree-Law 14.219.

Choosing which guarantee to use (a deposit, an ANDA surety, a Contaduría guarantee, private insurance, a real guarantee…) is free. But once a cash deposit is chosen, how it is set up and where it is held is no longer optional.

Where the money must be held (and where it must not)

The agency may receive the money to arrange the guarantee and give you a receipt. What it may not do is keep it throughout the contract in its operating account, mixed with its own funds and available whenever it likes.

The deposit must be set up in a specific banking arrangement for a guarantee deposit:

  • Article 38 of Decree-Law 14.219: the deposit must be made at the Banco Hipotecario del Uruguay (BHU) within fifteen days of signing the contract.
  • Article 25 of Law 18.795 (2011): today deposits are set up in Indexed Units (UI), earn no interest, and may also be received by other banks and financial intermediation cooperatives (the BHU no longer has a monopoly).

The fact that the agency's account is "at a local bank" does not turn it into a guarantee-deposit account. The practical effect of the rule is precisely to prevent that: the money being blended into a third party's assets and available unilaterally.

Does this apply to "free-contract" housing?

Yes. This is a point that often causes confusion. Housing whose building permit was filed on or after 2 June 1968 is generally governed by what the parties agree and by the Civil Code. But Decree-Law 14.219 itself (Article 102) preserves for those properties the application of its Chapter VII, which is precisely the one on guarantees.

In other words: the rules on the guarantee deposit also reach free-contract housing built after 1968.

The exception: the LUC's "no-guarantee lease"

The Ley de Urgente Consideración (Law 19.889, Articles 421 and following) created an optional regime for leases without a guarantee. It only applies if five requirements are met at once: residential use, the total absence of any guarantee in favor of the landlord, a written contract, an express statement of term and price, and the express will of both parties to be covered by that regime.

Under this regime no deposit may be required. Moreover, simulating the absence of guarantees in order to enter it can bring a fine of between one and five months' rent (Article 459).

And the owner? Are they also responsible?

They can be. Article 38 expressly covers the lessor, the sublessor, their representatives, and property administrators. And on the subject of mandate, the Civil Code establishes that the agent must account for their administration (Article 2074) and that the principal is liable for the acts of the agent carried out within the terms of the mandate (Article 2076).

In plain terms: if the agency received the deposit acting as the owner's authorized representative or administrator, its conduct can also involve the owner. It is neither automatic nor identical for both — it depends on the administration contract, the instructions, and who actually disposed of the money — but the owner is not off the hook simply for having delegated.

How to claim if the agency or landlord keeps the money

If the agency or the landlord receive the money and hold on to it instead of setting up the required bank deposit, Article 38 provides that the infringement may be reported to the Justice of the Peace (Juzgado de Paz) where the property is located. Once the infringement is proven, the judge may order the attachment of the corresponding sums, follow the enforcement (executive) procedure, and impose a fine of between one and five times the deposit withheld.

A different situation is where the deposit was set up correctly and, at the end of the contract, there is a disagreement over damage, debts, or its return. In that case, neither party can withdraw the money unilaterally, and the dispute must be resolved by agreement or through the appropriate judicial channel.

The BHU guarantee service today

For those who choose the cash deposit, the BHU offers the classic service:

  • A deposit set up in Indexed Units.
  • An opening fee of 5% of the deposit; no maintenance cost.
  • It is a guarantee account funded by the parties: withdrawal requires the counterparty's involvement or authorization (if one party does not attend, their signature must be notarized).
  • The option to pay the deposit in up to ten installments, if both parties agree.

This logic — that neither party can withdraw the money alone — is what effectively protects the tenant, so that their deposit does not "disappear".

The guarantee alternatives, in a table

AlternativeWhat it isApproximate cost*Who it is for
BHU depositCustody of the cash deposit (UI), account funded by the partiesOne-off fee of 5% of the depositAgreement between owner and tenant
ANDASurety (ANDA acts as guarantor; it does not hold the money)Monthly premium on the rentThe tenant must be an ANDA member
CGN (National Accounting Office)State guaranteeMonthly fee of 3% to each partyPublic employees, private employees under SGA, retirees, and other beneficiaries
ANV – Rental Guarantee FundState fundMonthly fee of 3% to each partySubject to FGA conditions
Private surety insuranceInsurance / suretyVaries by marketDepending on the insurer

*Costs change: it is best to confirm them with each institution at the time of contracting.

In summary

  • The cash deposit cannot exceed 5 months' rent (housing).
  • The agency may receive it, but not keep it in its operating account during the contract.
  • It must be set up in UI, at the BHU or another authorized bank or cooperative.
  • This also applies to free-contract housing built after 1968.
  • Under the LUC's no-guarantee regime, no deposit may be required.
  • If the agency or the landlord keep the money instead of setting up the required bank deposit, Article 38 provides for a report to the Justice of the Peace, attachment, enforcement proceedings, and a fine.

Are you about to rent, or to put your property up for rent? Compare the options in our guide to rental guarantees, browse the available properties, or message us on WhatsApp.

Frequently asked questions

Can the agency keep my rental deposit in its own account?

Not during the contract. It may receive it to arrange the guarantee, but the cash deposit must be set up in Indexed Units at the BHU or another authorized bank or cooperative — it cannot stay in the agency's operating account (Article 38 of Decree-Law 14.219; Article 25 of Law 18.795).

What is the maximum deposit they can ask me for?

For housing, up to five months' rent (Article 38 of Decree-Law 14.219). For other uses, up to ten.

Does this apply if my home is "free-contract"?

Yes. Although housing built after 2 June 1968 is governed by what is agreed and by the Civil Code, Article 102 keeps Chapter VII on guarantees applicable to it.

If I sign under the LUC's no-guarantee regime, can they ask me for a deposit?

No. That regime requires the total absence of guarantees; requiring a deposit distorts it and can bring a fine (Articles 421 and 459 of Law 19.889).

What do I do if they don't return my deposit?

Two situations must be distinguished. If the agency or landlord withheld the money instead of setting up the required bank deposit, you can report the infringement to the Justice of the Peace where the property is located, with attachment, enforcement proceedings, and a fine of one to five times the amount withheld (Article 38 of Decree-Law 14.219). If, however, the deposit was set up correctly at the BHU and there is a disagreement over damage, debts, or its return at the end of the contract, neither party can withdraw the money alone: it is resolved by agreement or through the appropriate judicial channel.

How much does the BHU guarantee cost?

A one-off fee of 5% of the deposit, in Indexed Units, with no maintenance cost; withdrawal requires authorization from both parties.

Sources

Verified on IMPO (impo.com.uy) and official sites, July 2026. This guide is for guidance only and does not constitute legal advice; for specific situations, consult a lawyer or notary specializing in leases.

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Thanks to the reader whose question inspired this article. If you have a question or a topic you would like us to cover, write to us: input like his helps us improve what we offer.

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