Refund of the deposit from a flat rental agreement in Poland – a practical guide for foreigners

Many foreigners living in Poland enter into residential lease agreements. One of the elements of a lease agreement is the obligation to pay a deposit to the landlord, the purpose of which is to secure the landlord’s financial interests, in particular in the event of possible damage to the premises.

Our experience shows that in practice, problems often arise regarding the full refund of the deposit. In many cases, landlords return only part of the deposit or refuse to refund it at all, citing various reasons. However, they usually claim that the technical condition of the premises differs from the condition at the time of handing it over to the tenant.

Foreigners often give up on claiming their deposit, accepting the landlord’s arguments or fearing complicated pre-trial or court proceedings. In practice, this problem is further exacerbated by the belief of some landlords that foreigners ‘will not go to court anyway’, are unfamiliar with the realities of the Polish legal system, or will give up pursuing their rights for fear of the formalities and costs of the proceedings. In reality, however, the rules for settling deposits in Poland derive directly from Polish law, which applies equally to both Polish citizens and foreigners living in Poland. In many cases, recovering a deposit is simpler and less costly than it may seem, although each case requires careful analysis of the situation.

In this article, we will address the following issues:

• What is a deposit in a tenancy agreement concluded in Poland in accordance with Polish law?
• What is the function of the handover protocol for a residential tenancy agreement?
• Does a landlord in Poland have to present invoices in order to make deductions from the deposit?
• What does it mean to return a rented property in an ‘undeteriorated condition’?
• When should the landlord return the deposit to the tenant?
• What legal steps can a foreigner take if the landlord does not return the deposit or returns only part of it?

What is a deposit in a lease agreement concluded in Poland in accordance with Polish law?

From the perspective of foreigners in Poland, it is particularly important that Polish law provides clear rules for the settlement of deposits, regardless of the tenant’s nationality or length of stay in Poland.

The deposit mechanism in Polish law is regulated by the Polish Act on the Protection of Tenants’ Rights, Municipal Housing Resources and Amendments to the Polish Civil Code. Pursuant to Article 6(1) of the Act, the conclusion of a tenancy agreement may be conditional upon the tenant paying a deposit.

The deposit is therefore a standard tool for protecting the interests of landlords in Poland and serves as security for their claims against tenants. Its purpose is to cover any amounts due under the lease that may be owed to the landlord on the date the tenant vacates the flat, i.e.:

• the costs of repairing damage to the premises, i.e. the costs that the landlord must cover in order to restore the technical condition of the premises to its condition on the date of conclusion of the lease agreement and signing of the handover protocol, taking into account normal wear and tear resulting from proper use. For example: the tenant damaged the floor by scratching or denting it as a result of improper use of furniture.

• receivables for unpaid rent in a situation where the tenant is in arrears with payments. For example: the tenant is several months late with rent payments.

• costs of utilities or other services, if, according to the lease agreement, they are the responsibility of the tenant and have not been paid on time. For example: arrears relate to fees for waste disposal or maintenance of common areas of the building.

• claims in the event of non-contractual use of the leased property, i.e. a situation where the tenant does not vacate the leased premises despite the fact that the lease agreement has expired. For example: if the lease agreement expires on 30 June and the tenant continues to occupy the premises in July and August, the landlord may claim payment for those months and any additional damages resulting from the unlawful extension of the use of the premises.

A practical example from Polish case law:

“A deposit within the meaning of Article 6 of the Act (…) is a payment with the characteristics of security in kind and is made in performance of the agreement, on the basis of which the tenant transfers a specified amount of money to the landlord in order to secure his claims that may arise from the lease relationship between them, and the landlord is obliged to return, after the termination of the lease, the indexed amount which he himself received, subject to the possibility of deducting his unsatisfied claim covered by the security.” (judgment of the Polish Regional Court in Łódź, 3rd Civil Appeals Division, of 24 February 2017, ref. no. III Ca 1676/16)

What is the function of the handover protocol for a residential property under a lease agreement?

From the perspective of both the tenant and the landlord, the handover protocol is a key document for settling the deposit in Poland. This document is drawn up at the time of handing over the premises to the tenant, primarily to reflect the technical condition of the premises on the day of handover. It is essential to precisely determine the reference point in the handover report in order to assess whether damage exceeding normal wear and tear has occurred during the lease, as discussed in more detail below. However, if the parties do not make the relevant arrangements in the report, pursuant to Article 675 § 3 of the Polish Civil Code, it is assumed that the premises were handed over to the tenant in good condition and suitable for the agreed use. This is a presumption that can only be rebutted by evidence to the contrary (in accordance with Article 234 of the Polish Code of Civil Procedure).

Upon termination of the lease agreement in Poland, the second part of the handover protocol is signed, documenting the condition of the premises at the time of its return to the lessor. This part of the report should include any changes, wear and tear or damage that occurred during the lease, specifying the equipment, walls, floors, doors, windows, installations and other important parts of the premises. Reference should be made to the condition of the premises specified in the handover report at the beginning of the lease, which allows for an assessment of whether damage beyond normal wear and tear has occurred. If the parties agree on which damages or arrears may be deducted from the deposit, they should be clearly indicated in the report.

In our experience, the handover protocol should be as detailed as possible, including a description of the condition of all rooms and fixtures and fittings. It also seems that the report should be supplemented with appropriate photographic documentation, which significantly strengthens the tenant’s position in the event of a possible legal dispute. The photographs should document the condition of the premises at the time of both handover and acceptance, including all equipment, floors, walls, doors and windows.

This type of documentation minimises the risk of misunderstandings regarding damage and its extent, and also allows for precise settlement of the deposit. In the event of a dispute concerning the non-return of the deposit or deductions from it, a detailed report with photographs constitutes reliable evidence for the court, clearly indicating the condition of the premises at the beginning and end of the tenancy. In addition, our experience shows that careful preparation of the report can have a preventive effect, as landlords, seeing precise documentation, will generally be less inclined to question the return of the deposit or make unjustified deductions.

In practice, however, reports are often abbreviated and cover only those issues that are the subject of settlement or disagreement between the parties. This means that they do not always describe the condition of the entire premises, which may lead to doubts when settling the deposit at a later date.

In addition, handover reports are very often drawn up exclusively in Polish, which makes it impossible for the tenant to actually verify the descriptions of the condition of the premises and subsequent deductions made by the landlord.

A practical example from Polish case law:

“A handover protocol is a specific document used to establish the state of affairs transferred between different entities. This function significantly determines its content and legal characteristics. Due to the need to determine the actual state of affairs, the handover protocol does not contain declarations of will, but mainly declarations of knowledge or technical information (judgment of the Polish Court of Appeal in Warsaw, 6th Civil Division, of 16 March 2011, ref. no. VI ACa 852/10).”

Does a landlord in Poland have to present invoices in order to make deductions from the deposit?

The landlord should demonstrate the validity of deductions made from the deposit. This means that the landlord cannot arbitrarily retain the deposit or deduct ‘lump sum’ amounts from it that are not supported by actual costs. In practice, the landlord should be able to prove:

• that the damage actually occurred,
• that it exceeds normal wear and tear of the premises,
• and what the actual cost of repairing it was.

This is most often done through invoices, bills or contracts with contractors documenting the actual cost of the repair. The lack of such documents significantly weakens the landlord’s position in a possible court dispute. It should be emphasised that the landlord’s statement alone, an ‘estimated’ cost estimate or a general indication that ‘it was necessary to repaint the flat’ do not, as a rule, constitute sufficient grounds for deducting the deposit paid by the foreigner.

What does it mean to return a rented property in an undeteriorated condition?

The tenant is obliged to return the property in an undeteriorated condition at the end of the lease (in accordance with Article 675 § 1 of the Polish Civil Code), in which case the tenant has the right to demand a full refund of the deposit. But what does this statement mean in practice? In practice, the term ‘undiminished condition’ does not mean that the premises must look exactly as they did on the day they were handed over to the tenant. In practice, it is not possible to use the premises and return them to the landlord in exactly the same condition as when they were handed over to the tenant.

At the same time, the tenant is not liable for deterioration of the premises resulting from normal use, i.e. for example:

• minor scratches on the floor/panels,
• minor chips in the paint or wallpaper,
• wear and tear on carpets or rugs,
• minor discolouration of walls,
• slightly worn door seals,
• slight signs of wear and tear on fittings,
• gradual ageing of electrical appliances or household appliances as a result of normal use,
• etc.

In a situation where the landlord fails to return the deposit to the tenant or returns a disproportionately small part of it, the burden of proof is shared between the parties – the landlord should prove the existence of damage and its extent, while the tenant may argue that the deterioration of the premises is within the limits of normal wear and tear resulting from proper use.

Therefore, as described above, it is important to precisely formulate the handover protocol documenting the condition of the premises on the day of handing it over to the tenant. However, damage that occurs after the premises are returned to the landlord cannot be charged to the tenant, as, in principle, the tenant no longer has access to the premises.

A practical example from Polish case law:

‘In turn, the condition “undamaged” means, in the opinion of the court, the preservation of the characteristics specific to the premises without permanent damage, although with the possibility of signs of wear and tear (judgment of the Polish District Court in Jelenia Góra, 5th Commercial Division, of 30 November 2015, file ref. no. V GC 177/15).’

When should the landlord return the deposit to the tenant?

In Poland the landlord should return the deposit to the tenant within one month from the date of vacating the premises. If this does not happen, the tenant’s claim for the return of the deposit becomes due and, as a consequence, the tenant may take pre-trial and court action to recover the deposit.

Importantly, the housing deposit is not settled when the tenant returns the keys, but only after the statutory deadline has expired. Consequently, the landlord is not entitled to make the return of the keys conditional on the return of the deposit.

At the same time, leaving the premises without returning the keys to the landlord cannot be equated with returning the premises that are the subject of the lease. It is irrelevant whether the landlord has another set of keys. Even assuming that the landlord has another set of keys, he cannot be certain that the premises will not be used by the former tenant.

A practical example from Polish case law:

“In accordance with the current Act on the Protection of Tenants’ Rights, Municipal Housing Resources and Amendments to the Polish Civil Code, the deposit is refundable within one month from the date of vacating the premises or acquiring ownership thereof by the tenant, and not at the moment of termination of the tenancy, which affects the commencement of the limitation period for claims for its return” (judgment of the Polish Court of Appeal in Warsaw,  6th Civil Division of 5 April 2018, ref. no. VI ACa 1748/16).

What legal steps can a foreigner take if the landlord does not return the deposit or returns only part of it?

Below we present the basic legal remedies provided by Polish law for foreigners renting flats in Poland. The first step should be to send a written request to the landlord to return the deposit in full or the amount remaining after any deductions, in accordance with the handover protocol. The request should:

• be final and clearly indicate the deadline for returning the deposit (e.g. 7–14 days from delivery of the letter),
• specify the amount requested for return,
• refer to the arrangements contained in the handover protocol, if one has been drawn up,
• include information that in the event of non-payment, the case will be referred to court.

In order to resolve the dispute amicably, after sending the request for refund, the tenant may also try to correspond by e-mail to try to determine the final settlement of the deposit. Documenting all correspondence may serve as evidence in a court case in the future.

However, if the request is unsuccessful, the next step will be to file a claim for the return of the deposit with the civil court. The claim should include, among other things:

• the amount of the deposit and the amount of deductions considered unjustified,
• the facts of the case,
• evidence in the form of a handover report, photographic documentation, correspondence with the landlord and a request for payment.

In Poland cases concerning the return of rental deposits are usually relatively simple and quick to resolve, as they are based on a clear obligation to return the deposit and the documentation of the report. The costs of the proceedings may be limited, and the court may order the landlord to return not only the deposit, but also interest for delay and the costs of the proceedings, including the costs of representation by a professional solicitor.

Summary

A deposit under a residential lease agreement in Poland serves only to secure the landlord’s interests and cannot constitute an additional source of income for the landlord. At the end of the lease, the landlord has a statutory obligation to return the deposit, but only within the limits of actual, documented claims against the tenant.

From a foreigner’s perspective, it is crucial to properly document the condition of the premises both at the time of handover and return. The handover protocol, supplemented with photographic documentation, is the basic point of reference for the settlement of the deposit and the main evidence in any legal dispute. The lack of such documentation significantly weakens the evidence of the parties in practice and often leads to unjustified deductions.

One of the most common problems faced by foreigners is their lack of knowledge of the Polish language and signing lease agreements without fully understanding their content, in particular with regard to the rules for settling the deposit.

In the event of a refusal to return the deposit or part thereof, the foreigner is not left without legal protection. In the vast majority of cases, a pre-trial demand for payment proves effective. However, if the landlord continues to evade the obligation to settle the deposit, the case may be referred to court, where, with the proper documentation, the tenant’s claims are usually fully justified.