Caution Money and What It Can Be Used for

One of the things those people who – just like me – live in a rented apartment had to pay was the caution money. Most tenants, however, don’t have an idea what it can be used for and are often unpleasantly surprised when leaving the apartment and being told that they won’t get all of their money back. So what can the caution money or simply called a deposit actually be used for?

First of all: What is the caution money?

Before we get to the whole point of this article, you have to know what the caution money is and what is its legal basis. The Cambridge Dictionary defines it as “an amount of money that someone has to pay when they rent property, use a service, etc. which will not be returned if they damage something or owe money at the end of their contract”.

In the Czech Republic, it is defined by the Czech Civil code that also regulates its use and amount. The Civil code is very important in itself: If you, for example, happened to sign a contract that contains something illegal that harms you as a tenant, the Civil code will protect you should you sue the lessor. It doesn’t matter that you have already signed the contract – if anything it contains goes against the Civil code, the law will be on your side. For example, the caution money must not exceed three times the monthly rent. So if you paid the lessor more money than it is allowed by the civil code, and only found out later, you can sue them (just don’t forget about the limitation period).

It is, however, still recommended you always double-check whether the contract you sign doesn’t go against the law to avoid complications in the future.

The caution money must not exceed three times the monthly rent. Remember that when looking for an apartment!

What can it be used for?

While the Civil code regulates many things, what exactly the caution money can be used for, is defined only vaguely. This should be actually defined in the lease agreement. Long story short: Tenants pay caution money when they take over a newly rented apartment and it acts as a sort of safeguard should the tenant cause some damage to the apartment or its equipment. If the apartment or its equipment suffer some damage, a certain amount of the caution money will be taken to cover the damage, the rest will be returned to the tenant. This normally happens when the lease agreement expires and the tenant is about to move out. This doesn’t have to always be the case, though – the caution money can be used to cover damages and repairs whenever it is needed, but the original amount of money has to be restored. The date of the caution money being returned to the tenant should be defined in the lease agreement as this is not regulated by the Civil code.

The caution money can be, theoretically, also used to cover the rent, although it is not recommended and the lessor won’t be very content about their tenant doing so. And once again: Even if the lessor agrees with the tenant doing that, the original amount of money has to be restored later on.

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Useful tips for the tenants to be

There are a few more useful things that you should be aware of. For example, it is recommended that you check the apartment for any defect and report them to the landlord until the 14th day from moving in. This is not stipulated by law but it’s always good to arrange this with the landlord – it’s beneficial for both of you. Besides that, any defects and/or damage should be photographed – the photos could later serve as a piece of evidence. That doesn’t mean the landlord would try to blame you for something you are not responsible for – they might be simply unaware of some damage caused by the previous tenant and it would be quite unfair for you to have to pay for it, right? 

For example, our relocation consultants take photos during every apartment takeover and these photos are then entered into our system. That way they can protect the tenants from potential problems. So if you want to make sure that you’ll get along with your landlord and avoid misunderstandings, you can use our relocation agency.

Besides that, don’t forget to make sure that the whole apartment is clean when you’re moving in and then moving out. Not only will it help you avoid misunderstandings with the landlord who may use some amount of your caution money on cleaning, but think also about the future tenants. Imagine this: would you like to move into an apartment just to find out the previous tenants left some mess there and nobody took care of it?

And one last thing: Should you use the caution money during your stay, it is advised to only use a small amount. Are you looking for a new apartment in the Czech Republic? Don’t hesitate to get in touch with us – you’ll be living in a new home quicker than you can say Jack Robinson. And before you do so, you can take a look at some apartments for rent at our site!

Source of the photo: Pexels.com

Anna Minjaríková

Anna Minjaríková

Hello, readers! My job is to provide you with some interesting tips and useful information about all the things Czech. ♫ I'll be there for you! ♫

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