Lots of expats come to us asking for advice, feeling they’ve been shortened on the refund of their deposit.
This article was written by a lawyer and a real estate agent. If you’re renting or searching for a rental, follow the tips here and hopefully avoid sour difficulties later.
Through the eyes of a lawyer
Security deposit is mentioned only once in the entire body of Czech law, in two paragraphs of one section (2254) of the Civil Code.
The law states that a security deposit can’t be higher than three times the monthly rent. In other words, the owner can ask for a deposit anywhere between zero to three times your rent.
If payments for energies and services are stated separately in your contract, then they cannot be included in the calculation. For example, if your contract states the rent of 10,000 CZK plus advances for energies of 3,000 CZK, the maximum deposit the landlord can ask for is 30,000.
The deposit is usually paid in advance before the hand-over of the apartment. The law is silent on this matter, though, which means you can arrange the deadline with the owner any way you want, even negotiate to pay in several instalments.
The law states that the deposit is refundable at the end of the rental. The owner should return the deposit immediately with the termination of the contract. In other words: you shouldn’t sign the handover protocol and give the owner his keys back, without first receiving your money back.
Also, it’s not possible to cover future claims from the deposit. In other words, your landlord can’t divide the deposit at the end of the rent and return only some part of it, with reference to future settlement of energy bills or others. He can only do so if you both agree on such a plan.
Plus, you’re entitled to the interest from the deposit. The minimum is given by law and equals the average of the loan interests, usual to your area. That average is quite problematic to quantify though, so it’s highly recommended to have the exact percentage stated in the contract. (It can’t be 0%, should be at least 2% p.a. – otherwise, the stipulation would be void; you can ignore it and you’re entitled to the loan interest usual in your area. In practice, it’s so difficult to calculate that people usually give up the interest. However, it’s still your right to demand it).
The owner can deduct every legal claim related to the rent itself: typically, overdue rent or repairs of damages to the apartment caused by you. However, this part can get tricky. The landlord has a duty to provide you with an apartment in a certain condition – and he must keep it that way and fund repairs from his own pocket.
You’re responsible only for damages you caused – intentionally or negligently. And also for damages you failed to inform the landlord about and repaired on your own. Small common repairs (‘běžné opravy’) are covered by you, too (changing bulbs, etc.), however only to the yearly maximum of 100 CZK per sq metre of your flat.
He can’t deduct the normal wear and tear damage to the apartment. He can’t charge you for the worn-out floor or the squeezing doors.
Lastly, he can’t deduct any contractual fines (‘smluvní pokuta’), or claims for personal damages caused by your behaviour. If you have a contractual fine stated in your contract, the stipulation is void (i.e. you can ignore it).
How to defend yourself
Disagreements about deductions are usually the part when lawyers come in. If your landlord isn’t willing to refund a part of the deposit and you feel his reasons aren’t justified, you can file a civil lawsuit against him: or threaten him with one. Such “letter before legal action”, předžalobní výzva in Czech, especially with an attorney’s signature underneath, can make a big difference. If you ever stand in front of a judge, the landlord has the burden of proof: he’s the one who must prove that the deductions were rightful and reasonable. If he fails, he must return the deposit plus pay for all your legal costs.
Start by contacting our consultants, or the Integration centre. There’s also the Tenants’ Association that offers free consultations regarding legal issues connected with renting a property. They have an office in Brno, but they’re not primarily English-friendly.
Through the eyes of a real-estate agent
Here are some tips and best practises gathered over many years of experience as a real-estate mediator.
The more precise your contract, the fewer disputes later. The article concerning the security deposit should not only state the exact amount but even better for you if it contains an exhaustive list of reasons for deductions your landlord can apply.
It should also state whether your landlord must inform you of any use of the security deposit and whether you’re obliged to supplement the deposit to the original amount and how quickly.
It’s possible to agree on a deposit even after you’ve moved in, but that’s up to you – the landlord cannot force you into paying if it wasn’t stated in the contract.
Paying your deposit
In case you’re planning to pay in cash on the day of your move-in, make sure that your daily limit for ATM withdrawals is high enough. Turn up on time and with the right amount for your move-in date to avoid any awkward first impressions.
Energy billings deductions
If the landlord pays the bills on the day of the lease termination and cannot refund your deposit before you hand him back the keys, it’s highly recommended to set him a secondary deadline – don’t forget to give him your account number, too.
If there is central heating in the apartment, the landlord receives the bill only once a year. He needs to inform you about this in advance. You can agree to return part of the security deposit upon termination of the lease whilst the landlord retains the second part to pay any possible arrears for heating, and refund you the rest on a later date. Another option is to simply agree on a fixed monthly payment for heating. No later billing of heating occurs then but you might end up paying more than you use.
You probably pay for your water consumption every month in a fixed rate per person. If your payments aren’t fixed, the exact consumption can be easily calculated at the end of the lease by reading the metres, and deducted from your deposit on the spot. There’s no need for the landlord to withhold it.
The same applies to electricity – an extraordinary invoice can be requested from the supplier at any time, so even upon the termination of your lease. You can know your exact consumption soon after leaving the flat and once again, this shouldn’t be a reason for the landlord to withhold your deposit for too long.
Your hand-over protocol is one of the most important cards in your hand, right next to the contract. Pay extra attention to it, both when taking over the apartment and when returning it.
During the hand-over, go through the apartment slowly and calmly, ideally in daylight. Alert the landlord to any defects and record them – even the smallest damage to the floors and walls. Take photos. Check all appliances. State everything in the hand-over protocol. You don’t know your landlord well by this point – he can turn out to be a very laid-back person later, but he can also be the opposite – it’s better to be extra careful.
If there isn’t enough time to test the appliances, propose that you’ll confirm their functionality to the landlord within one week – write this note down into the protocol, too.
The handover protocol must contain an exhaustive list of all furnishings and equipment of the apartment (or their pictures). Go through the list item by item and check that they’re really in the flat. Only then sign.
Afterwards, send the photos and a scan of the signed protocol to your landlord’s email.
The law says you have the right to keep an animal in your apartment no matter your landlord’s opinion on the matter. However, we recommend to ask in advance and state it in the contract, to assure a good relationship with your landlord. It can happen that the owner will increase the deposit but the refund at the end of your stay will certainly go smoother.
Picture by Jiří Lubojacký.