Security deposit (kauce, jistota)
Kauce in English is a security deposit: cash the tenant pays the landlord to secure rent and compensation for damage (§ 2254 of the Civil Code, občanský zákoník). For a flat lease it may be at most three times the monthly rent, excluding service advances. When the lease ends, the landlord returns it with interest; he may offset unpaid rent and proven damage.
Example
Rent is CZK 20,000, so the deposit can be at most CZK 60,000. The tenant leaves with the last month's rent of CZK 20,000 unpaid and a damaged floor worth CZK 15,000. The landlord returns CZK 25,000 plus interest. For an owner with a mortgage at 5.00 %, the deposit is a reserve for the payment in case of a dispute, not income to spend.
In practice
Keep the deposit in a separate account and state in the contract when and how you will return it. It becomes taxable income only when you offset it against a debt. Without a handover protocol, damage is hard to prove. Asking for more than three times the rent, or keeping the deposit without a statement, invites the tenant to sue for its return.
How it differs
Several other payments get called a deposit. The reservation fee under a reservation agreement is paid on a purchase, not on a lease. A down payment (akontace) is the own contribution when buying on credit. Service advances cover energy and building running costs and are settled annually.
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