LAW OF OBLIGATION ACT, PART 3, CHAPTER 15, DIVISION 4

Division 4

Securities for Lessor

  • 305. Right of security of lessor

(1) The lessor of an immovable has the right of security over movables located on the leased immovable and, upon the lease of a room, over movables which are part of furnishings or are used together with the room in order to secure claims arising from a lease contract even if the movables are not in the possession of the lessor. Claims for the rent of the current year and the previous year and claims for compensation shall be secured by a pledge.

(2) The right of security does not extend to things which cannot be the object of a claim.

(3) The rights of third parties to things concerning which the lessor knew or ought to have known that the things do not belong to the lessee and the rights of third parties to things in the possession of the lessee which are stolen from or lost by the owner or previous possessor or of which the owner or previous possessor is dispossessed in any other manner against the will thereof shall precede the right of security of the lessor.

(4) The provisions of the Law of Property Act concerning security over movables apply to the right of security of lessors, unless otherwise provided in this Division.

  • 306. Extinction of right of security

(1) The right of security of a lessor extinguishes with the removal of a thing from a leased immovable, unless the thing is removed without the knowledge of the lessor or the lessor contests the removal of the thing.

(2) A lessor shall not contest the removal of a thing if the removal corresponds to the regular management of the immovable or the daily living arrangements or if the remaining things are sufficient security for the lessor.

(3) The right of security of a lessor extinguishes when the lessee gives the lessor another security in order to secure performance of the obligations of the lessee. The right of security of a lessor over a thing extinguishes if the lessee gives the lessor another security which is equal to the value of the thing.

(4) If, during the term of a lease contract, the lessor learns that things brought into the premises by the lessee do not belong to the lessee and the lessor does not cancel the lease contract at the earliest opportunity, the right of security over these things extinguishes.

  • 307. Exercise of right of security

(1) If a lessee wants to move out or to remove things from the premises, the lessor may withhold things to the extent which is necessary in order to secure the claims of the lessor. The lessor may use self-help in order to exercise the right of security.

(2) If things are removed from an immovable without the knowledge of the lessor or regardless of the fact that the lessor contested the removal of the things beforehand, the lessor may reclaim the things in order to return them to the premises. If the lessee has moved out, the lessor may demand that the possession of the removed things be transferred to the lessor.

(3) The right of security extinguishes one month after the lessor becomes aware of the removal of the thing unless the lessor has filed an action for reclamation of the thing before.

  • 308. Deposit

(1) A residential lease contract may prescribe that the lessee pays a deposit in the amount of up to three months’ rent to the lessor in order to secure claims arising from the contract. The lessee may pay the deposit within three months in equal instalments. The first instalment shall be paid after entry into the lease contract.

(2) The deposit shall be kept by the lessor in a credit institution separately from the assets of the lessor and at least at the local average interest rate. The interest belongs to the lessee and increases the deposit.

(3) The lessee may demand repayment of a deposit if the lessor does not inform the lessee of a claim of the lessor against the lessee within two months after expiry of the lease contract.