Warning: Landlords Can Ask For a Guarantee

One thing you should know about lease agreements in Brazil is that landlords can ask for a guarantee. There are three primary types: caução; fiança; and seguro de fiança locatícia. But keep in mind that a landlord can only ask for one.

Caução works like a security deposit although tenants can offer other assets such as real estate. A registration with the notary office is required when real property guarantees a lease. If the guarantee is money, the landlord must deposit the funds in a separate savings account with interest accruing for the benefit of the tenant.

Fiança requires a third party guarantor or fiador. This person co-signs and agrees to assume any debts if the tenant fails to pay. Landlords generally request confirmation that the fiador has the financial capacity to guarantee performance of the lease. While fianças are beneficial for landlords, it can be hard for a tenant to find someone willing to assume their potential debts.

Seguro de fiança locatícia is a type of insurance. While it’s generally the most expensive type of guarantee, it’s useful because it protects both the landlord and the tenant. The landlord has a guarantee from a reputable third party while the tenant doesn’t need to worry about the landlord holding his money. Plus, it covers not just rent payments but also expenses such as utility bills.

The next time you rent an apartment in Brazil and are asked for a guarantee, consider which type will suit you best.