How to properly set up service deposits in a rental apartment

Introduction to the issue of deposits

The correct setting of deposits for services is key to a problem-free rental. Deposits that are too low lead to high arrears, which the tenant may not be able to pay. Excessively high deposits, on the other hand, discourage potential tenants and tie up their money unnecessarily. In this article, we'll show you how to properly set up and manage deposits.

Utilities deposits include payments for utilities and housing-related services that the landlord re-invoices to the tenant. They are not part of the rent, but a separate item.

Types of services and energy

Basic services

Energy:

• Electricity
• Gas
• Heat (distance or local)
• Hot water
• Cold water

Services:

• Common electricity (lighting corridors)
• Cleaning of common areas
• Elevator
• Garbage removal
• Repair fund (for apartments in SVJ)

Methods of measurement

Individual measurement:

• Meters directly in the apartment
• Exact consumption
• Tenant pays for actual consumption

Proportional measurement:

• Distribution according to floor areas
• Distribution according to the number of people
• Combined methods

Calculation of advances

Determination methodology

Step 1: Finding out the history of consumption

• Billing for the previous period
• Average consumption of the apartment
• Comparison with similar apartments

Step 2: Estimation of future consumption

• Number of people in the household
• Expected changes in energy prices
• Seasonal influences

Step 3: Calculation of monthly deposit

• Annual costs / 12
• Reasonable reserve (10-20%)

Calculation example

2+kk apartment, 55 m², 2 persons:

Service	Annual cost	Monthly advance
Electricity	18,000 Kč	1,500 Kč
Gas (heating + hot water)	24,000 Kč	Kč 2,000
Water	6,000 Kč	500 Kč
Services SVJ	12,000 Kč	Kč 1,000
Total	60,000 Kč	5,000 Kč

Adaptation according to the tenant

Factors affecting consumption:

• Number of people (mainly water)
• Presence at home (home office)
• Lifestyle (shower vs. bathtub)
• Home appliances

Contractual adjustment

Necessities in contract

Indicate:

• Amount of individual advances
• Billing method
• Billing date
• Method of payment of overpayments/underpayments

Sample clause: "Together with the rent, the tenant pays the advance payments for services related to the use of the apartment in the amount of [amount] Kč per month. The landlord will make the advance billing no later than 4 months after the end of the accounting period."

Separation from rent

Reasons for separation:

• Different tax regime
• Transparency for the tenant
• Easier billing
• Possibility of adjustment without changing the rent

Continuous management

Consumption records

Regular readings:

• Electricity meter, gas meter, water meter
• Monthly or quarterly
• Photo documentation of conditions

Cost monitoring:

• Records of invoices from suppliers
• Overview of price changes
• Timely response to deviations

Adjustment of advances

When to adjust:

• Change in energy prices
• Change in the number of persons
• Significant deviation from reality
• At the request of the tenant

Procedure:

• Written notification
• Evidence of reason
• Reasonable effective period

Service billing

Legal requirements

Billing deadline:

• Within 4 months after the end of the billing period
• U of flats in the SVJ following the invoice from the manager

Content of the invoice:

• Actual costs according to the type of service
• Advances paid
• Overpayment or underpayment
• Method of settlement

Billing procedure

Step 1: Collection of documents

• Invoices from suppliers
• Balances meters
• Billing from SVJ

Step 2: Calculation

• Total costs for the period
• Deduction of paid advances
• Result (overpayment/underpayment)

Step 3: Handing over to the tenant

• Written bill
• Documents for inspection
• Deadline for objections (30 days)

Billing sample

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Service billing for the period 1/1/2024 - 12/31/2024

Apartment: [address] Tenant: [name]

Service	Cargo	Advances	Difference
Electricity	17,500 Kč	18,000 Kč	+500 Kč
Gas	26,000 Kč	24,000 Kč	-2,000 Kč
Water	5,500 Kč	6,000 Kč	+500 Kč
Services SVJ	11,800 Kč	12,000 Kč	+200 Kč
Total	60,800 Kč	60,000 Kč	-800 Kč

Result: Arrears of Kč 800 Payment: within the applicable statutory or agreed settlement period; the 30-day figure is not a universal rule.

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Solving arrears and overpayments

Overpayments

Procedure:

• Refund or credit within the applicable statutory or agreed settlement period
• By transfer to the tenant's account
• Alternatively, credit to rent

Arrears

Small arrears (up to Kč 2,000, illustrative internal policy):

• One-time payment
• A reasonable period stated in the bill or agreement

Larger arrears:

• Installment schedule
• Maximum 12 months
• Written agreement

Unpaid arrears:

• Reminder
• Set-off with deposit
• Judicial enforcement

Specific situations

Change of tenant

At the end of the lease:

• Extraordinary billing
• Meter readings on the handover date
• Settlement of advances
• Any arrears from deposit

Reconstruction and replacement of meters

Before reconstruction:

• Reading of old meters
• Interruption of advances during reconstruction
• New settings after completion

Change of energy supplier

Procedure:

• Billing on the date of change
• New advances according to the new supplier
• Information tenant

Common mistakes

Error 1: Deposits too low

Consequences:

• High arrears
• Payment problems of the tenant
• Complications at the end of the lease

Solution:

• Realistic estimates
• Regular update

Error 2: Missing billing

Consequences:

• Uncertainty about costs
• Legal problems
• Loss of trust

Solutions:

• Systematic records
• Appointment calendar
• Timely processing

Error 3: Inaccurate billing

Consequences:

• Disputes with by the tenant
• Objections and complaints
• Legal risks

Solution:

• Transparent methodology
• Documentable documents
• Consistent procedure

Conclusion

Proper management of service deposits requires:

1. Realistic settings - based on actual consumption
2. Regular update - reaction to changes
3. Transparent records - documents for invoicing
4. Timely invoicing - compliance with statutory deadlines
5. Correct settlement - overpayments and underpayments

Well-set deposits will prevent conflicts and ensure the satisfaction of both parties to the rental relationship.

> Czech-law scope and editorial note: Legal, tax, accounting, tenancy, service-charge, condominium, metrology, insurance and data-protection statements in this article refer to the Czech Republic and the rules effective for the relevant date. Figures and examples are illustrative, not legal or tax advice. Verify current rules with the relevant Czech authority or a qualified adviser.

> Service-accounting clarification: Under Czech Act No. 67/2013 Coll., distinguish delivery of the settlement within four months after the accounting period, financial settlement generally within four months after delivery, and the separate 30-day periods for supporting documents or objections under § 8. A statutory per-day penalty under § 13 is conditional; verify the current amount and cap rather than applying a universal figure.