Rental deposit in Estonia and getting it back

How large can the deposit be?

A residential lease may provide that, to secure claims arising from the lease, the tenant pays the landlord a deposit of up to three months' rent (VÕS § 308 lg 1) [1]. The tenant may pay the deposit in equal instalments over three months; the first instalment is due after the lease is concluded (VÕS § 308 lg 1) [1]. In a residential lease, any agreement that deviates from the law to the tenant's detriment is void (VÕS § 275) [2].

If the landlord has satisfied a claim from the deposit, it may require the deposit to be restored to the agreed amount; this too may be paid in equal instalments over three months (VÕS § 308 lg 1¹) [1]. By agreement, the deposit may be replaced by another equivalent security (VÕS § 308 lg 5) [1].

How must the deposit be kept?

The landlord must deposit the money in a credit institution separately from its own assets, at no less than the average local interest rate; the interest belongs to the tenant and increases the deposit (VÕS § 308 lg 2) [1]. The deposit and the interest earned on it are not part of the landlord's bankruptcy estate and cannot be seized in enforcement proceedings against the landlord (VÕS § 308 lg 4) [1].

When and for what may the landlord keep the deposit?

The deposit secures claims arising from the lease (VÕS § 308 lg 1) [1]. If the landlord has not notified the tenant of a claim within two months after the lease ended, the tenant may demand the deposit back (VÕS § 308 lg 3) [1].

The following rules matter when assessing the landlord's claims.

• Ordinary wear and tear. The tenant must return the property in a condition consistent with its use under the contract and is not liable for ordinary wear and tear, deterioration and changes resulting from such use (VÕS § 334 lg 1 and 2) [3]. If, when concluding the lease, the parties agreed in a form that can be reproduced in writing that the tenant will remove ordinary wear and tear or bear the reasonable and necessary costs of doing so, that agreement applies, but not to items the landlord provided together with the premises (VÕS § 334 lg 2¹) [3].
• Handover report. If a handover report was drawn up when the property was handed over, it is presumed that the property was handed over in the condition described in it (VÕS § 334 lg 1) [3].
• Inspection and notice. When the property is returned, the landlord must check its condition and promptly notify the tenant of defects for which the tenant is liable; otherwise the landlord loses its rights arising from the defect, except for defects that an ordinary inspection cannot reveal (VÕS § 336 lg 1) [4].
• Contractual penalty. A claim for a contractual penalty for a material breach of a non-monetary obligation cannot be satisfied from the deposit (VÕS § 287 lg 5) [5].
• Limitation period. The landlord's claim for compensation for changes to or deterioration of the property expires six months after the property is returned to the landlord (VÕS § 338 lg 1 and 2) [6].

What the law says

• The deposit may be „kuni kolme kuu üüri ulatuses“ [1] (translation: up to three months' rent; VÕS § 308 lg 1).
• „Intress kuulub üürnikule ja suurendab tagatisraha.“ [1] (translation: the interest belongs to the tenant and increases the deposit; VÕS § 308 lg 2).
• „Üürnik võib nõuda tagatisraha tagastamist, kui üürileandja ei ole kahe kuu jooksul pärast üürilepingu lõppemist teatanud oma nõudest üürniku vastu.“ [1] (translation: the tenant may demand the return of the deposit if the landlord has not notified the tenant of its claim within two months after the lease ended; VÕS § 308 lg 3).
• The tenant is not liable for „asja hariliku kulumise, halvenemise ja muutuste eest“ [3] (translation: ordinary wear and tear, deterioration and changes of the property) resulting from use under the contract (VÕS § 334 lg 2).

What to do

1. Draw up a handover report when you move in – the property is then presumed to have been handed over in the condition it describes (VÕS § 334 lg 1) [3].
2. Check that the deposit does not exceed three months' rent and, if needed, pay it in equal instalments over three months (VÕS § 308 lg 1) [1].
3. When the lease ends, return the home in a condition consistent with its use under the contract and ask the landlord to inspect it straight away (VÕS § 334 lg 1; VÕS § 336 lg 1) [3] [4].
4. If the landlord has not notified you of a claim within two months after the lease ended, demand the deposit back together with the interest (VÕS § 308 lg 2 and 3) [1].
5. In a dispute, you can turn to a rental committee (üürikomisjon) or a court under the Rental Dispute Resolution Act (üürivaidluse lahendamise seadus, ÜVLS) (ÜVLS § 1 lg 1) [7]. A rental committee may be set up by a local authority (ÜVLS § 2 lg 1) [8], and rental committees do not decide money claims exceeding 3200 euros (ÜVLS § 1 lg 1¹) [7]. The application is made in writing and states, among other things, the claim, the facts supporting it and the evidence (ÜVLS § 5 lg 1 and 2) [9].

Frequently asked questions

Can the landlord ask for a deposit of four months' rent?

A residential lease may set the deposit at up to three months' rent (VÕS § 308 lg 1) [1]; in a residential lease, an agreement that deviates from the law to the tenant's detriment is void (VÕS § 275) [2].

When must the landlord return the deposit?

The tenant may demand the deposit back if the landlord has not notified the tenant of a claim within two months after the lease ended (VÕS § 308 lg 3) [1].

Does the deposit earn interest?

Yes. The deposit is kept in a credit institution at no less than the average local interest rate, and the interest belongs to the tenant and increases the deposit (VÕS § 308 lg 2) [1].

Can money be kept from the deposit for ordinary wear and tear?

The tenant is not liable for ordinary wear and tear resulting from use under the contract (VÕS § 334 lg 2) [3], unless, when concluding the lease, the parties agreed in a form that can be reproduced in writing that the tenant will remove ordinary wear and tear or bear the reasonable and necessary costs of doing so; such an agreement does not cover items the landlord provided together with the premises (VÕS § 334 lg 2¹) [3].

Do these rules apply to short-term rentals?

The rules on renting dwellings and business premises do not apply, among other things, to leases of rooms in accommodation establishments and premises intended for holidays for a term of up to three months, or to leases for the temporary use of other premises (VÕS § 272 lg 4 p 1) [10]. Nor do they apply to a lease of a dwelling that is part of the landlord's own living quarters and that the landlord has largely furnished – for example a room in the landlord's own home (VÕS § 272 lg 4 p 3) [10].