Uncertain tenant’s right to interests from security deposit

08. September 2016

The regulation of the lease of flat or house provided for in the new Civil Code considerably corroborates tenants‘ rights. One of the newly regulated rights is the tenant’s right to receive interest from security deposit (surety). Pursuant to Section 2254 ss. 2 of the Civil Code, the tenant has “the right to receive interests from the security deposit accrued from the provision thereof in the minimum amount equal to the statutory rate.“ However, what is the statutory rate remains a pending question. In its article called “The Interest from Security Deposit in Tenancy“ published in volume 5/2016 of the Bar Bulletin, Ing. Tomáš Buus, Ph.D., is dealing with the topic in detail and concludes that the interest from security deposit may reach 0 % up to 20 % per year! The new Civil Code actually renders with the situation where the security deposit may be paid in the amount equal up to 6 monthly rents. The lease and thus the period of security deposit interest running usually takes many years and the interests from security deposit may thus reach significant amounts. The uncertainty of law constituted by lawmakers regarding the interests from security deposit is appalling. The only option is to prevent any prospective disputes by an explicit arrangement of the interest rate applicable to security deposit in lease agreements and hope for a quick resolution of this issue in a statutory instrument or by a suitable judicature.