Being an expat living in The Czech Republic is generally pretty great. There are so many benefits to living in this country that many people soon decide to make it their permanent home. Aside from the beauty of this country and its focus on family and personal time, there’s also the excellent healthcare system, decent pay for employees, and the fact that you’re right in the middle of Europe and hopping to new locales is a cinch (at least it was before Covid).
Of course, there are some negatives, and the one that is perhaps complained about more than any other is the level of trickery heaped on unsuspecting expats by Czech property owners.
It is quite common to hear from an expat that their landlord refused to return their deposit when they moved from one place to another, and that’s not a small amount of money anywhere in the world but definitely not a small amount if your flat was located in Prague where the cost of a month’s rent has continued to rise to absurd levels.
Most of us who have dealt with a situation like this in the past have ended up on the losing side and most of us just sort of shrug and move on. Does it suck? Yeah, it does, but what can we do about it? The general feeling is that, as expats, we’re really not supported here in terms of having anyone to turn to when dealing with issues like this. Then there’s the Czech Bureaucracy which often feels as though it’s running about fifteen years behind most other countries around the world with antiquated processes, disconnected offices and outdated attitudes. And of course, if you don’t speak Czech (most expats don’t – at least not fluently), you’re really out of luck as it’s easier to find someone who can speak English at a McDonald’s than it is in a city office.
In fact, so many expats have had to deal with a, shall we say, less than honest landlord keeping their deposit that it’s a near constant complaint in online forums about Prague… and many of the people are heading back to their home country where whatever small amount of money they had to take with them is already likely to shrink during the currency exchange.
The good news is that those days are over because expats have a new ally in the war against unscrupulous property owners. But we’ll come back to that. First let’s look at your rights under the law.
Does a landlord have the right to retain a tenant’s deposit when the lease has ended?
To understand this, let’s first examine what a security deposit is for: A security deposit serves as your landlord’s guarantee to ensure his or her tenant’s compliance with the obligations arising from a lease agreement. So basically you, as the tenant, are giving the owner of your flat or home an amount above and beyond the normal monthly rent to hold onto in the event that you either damage the flat in some way or leave in advance of the agreed upon period, for example.
A deposit is not required by law so it’s really up to the two parties to decide whether to arrange a security deposit at all… but I’ve been renting for a long time and I have never – ever – heard of a landlord not requiring a deposit.
Thankfully, there is a limit on the maximum amount that can be charged for a security deposit. The law currently states that a deposit cannot exceed three times the monthly amount of the rent.
When the deposit is agreed upon in the lease agreement, a landlord is entitled to retain the deposit until after the termination of the lease agreement to compensate for damages caused by the tenant’s failure to fulfil his or her contractual obligations as well as any breaches of the lease agreement.
Examples of damages may include unpaid rent, unpaid advances for services (electricity, water, etc.) and damage or breakage that occurred in the apartment during the term of the lease. The amount of the deposit retained by the landlord cannot, however, exceed the amount of the real damage and the landlord is obliged to specify on which grounds he or she is retaining the deposit as well as specify the exact costs incurred to compensate any damages and substantiate his or her claims, e.g. by providing bills, receipts, invoices. The landlord must also inform the tenant of the date upon which the remaining portion of the deposit will be returned.
So, as you can tell from the above, the deposit is basically a form of insurance for the property owner. If there are no issues when you leave a flat? Great. You should get your deposit back without issue… but if, for example, during the course of your time in the flat or home you decided to paint a wall blue because, well, you just really love blue… you can expect to lose part of your deposit to pay for paint and labor to return the flat back to its original state. Or you can buy the materials and re-paint the wall yourself before you leave.
If the landlord is not able to substantiate his or her claims to retain the deposit, he or she is then obliged to return the amount of the deposit to the tenant upon termination of the lease. Moreover, the tenant is entitled to demand interest on the amount of the deposit in the statutory amount in cases where the landlord is in arrears (in cases where the interest rate is not arranged in the lease agreement, the statutory interest rate defined by the Czech National Bank applies. You can find the statutory amount of the interest rate here).
If the landlord unjustifiably refuses to return any amount of your deposit after the lease has ended, you, as the tenant, are entitled to file an action against the landlord for unjust enrichment.
What does all this legal stuff mean? It basically means that, if prior to leaving the flat, you have returned it to its original state… if you’ve made sure it was clean and you haven’t caused any damage during the course of your time living there (and that can include not fixing a leaky faucet which lead to water damage under a cabinet), then you are entitled to get back the full amount of your deposit.
The above is a distillation of your basic rights under Czech law. But, as noted above, this is an area where a very high number of expats are often taken advantage of – either because they were unaware of their rights, or simply because they felt they had no one to turn to for help. But that’s all about to change and here’s why:
Your New Ally
The good folks at Legans, a Prague-based law firm, have stepped up and are ready to support the expat community in legal disputes just like this. In short, they can help you get your deposit back.
Legans specializes in helping you understand – in greater detail than we can in this short article – what your rights are. And not just in regard to property rentals, but a whole host of other legal matters should you need assistance.
Think of them as an advisory service. They have years of experience and are staffed by a team of fifteen who are equipped to handle any legal issue you may be facing regardless of its complexity. And with their broad range of knowledge, they can tailor their focus to help you so that you can hopefully reach a satisfactory conclusion.