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Deposit and cancellation terms

How much deposit a cottage owner in Czechia can ask for, what a cancellation fee can rest on, and what a consumer guest must be told before booking. How to settle a cancellation with the right documents for a VAT payer and a non-payer, with links to the law.

Deposit and cancellation terms
In this article
  1. The law sets no deposit amount, your terms set the sum and the date
  2. You keep a cancellation fee only on the basis of an agreement
  3. A consumer guest must know the deposit and the cancellation terms before booking
  4. Write the cancellation terms as bands of days and a percentage of the total price
  5. Settle a cancellation one way: fee, refund and documents
  6. Summary
  7. What to do now

The deposit (záloha) and cancellation terms (storno podmínky) of a cottage are a matter of agreement. The law sets neither the size of the deposit nor the percentages of a cancellation fee, it only draws limits: what you must tell the guest in advance, on what basis you may keep money, and when a fee can be challenged. So write fixed dates and percentages into your terms, show them to the guest before the booking, and settle every cancellation the same way.

We go through how much deposit to ask for, what to base a cancellation fee on, what the guest must know in advance, and how to close a cancellation with the right documents. The law calls a private guest a consumer (spotřebitel).

How Chalupario handles deposits, instalments and cancellations

The law sets no deposit amount, your terms set the sum and the date

Under an accommodation contract, the guest pays within the period set by the house rules (ubytovací řád), otherwise within the usual period (§ 2326). The accommodation provisions (§ 2326 to § 2331 of the Civil Code) set no deposit amount, so you choose both the sum and the date.

In practice, owners ask for a third to a half of the price as a deposit and the balance before arrival or on the spot. That is not a legal limit, only a custom.

A deposit is a prepaid part of the price. The law presumes that whatever one party gave the other before the contract was concluded is a deposit (§ 1807), and it is deducted from the final price. It is not a penalty: on what basis you may keep any of it is the next section.

A VAT payer declares tax on a received deposit already on the day it is received (§ 20a(2) of the VAT Act). For a company guest it issues a tax document within 15 days (§ 28(8)). The post on the accommodation invoice covers this in detail.

Chalupario calculates the deposit as a percentage of the price or a fixed sum, sends the guest a QR code for whatever is currently due, and cancels an unpaid booking after the due date and the grace period you set, returning the dates to sale.

You keep a cancellation fee only on the basis of an agreement

A guest can cancel without your consent: the guest may give notice on the accommodation contract before the agreed period ends (§ 2330(1)). Without an agreed fee you only have a claim for damages, and only if you prove you could not have prevented the loss (subsection 2). A date you could have sold again will, as a rule, not give rise to such a claim.

That is why the fee belongs in your terms. The law offers three bases, each with its own rules:

BasisWhat the law saysWhat to watch
Earnest money, závdavek (§ 1808, § 1809)It must be agreed and handed over at the latest when the contract is concluded. If the guest defaults you may keep it, if you default the guest may demand double.A deposit paid only after the booking cannot be earnest money.
Release fee, odstupné (§ 1992)The parties agree that the contract can be ended by paying a release fee.A party that has already performed for the other, even in part, or has accepted performance from it, has no right to it. Have a lawyer judge whether a paid deposit counts.
Contractual penalty, smluvní pokuta (§ 2048)An agreed sum or a way to calculate it, for breach of an agreed duty, claimable whether or not any loss arose. You then have no claim for damages (§ 2050).A court may reduce an unreasonably high penalty on the guest's motion (§ 2051).

The law does not say which of the three suits a cancellation before arrival best. Have a lawyer read your fee wording, because the percentages are not set by statute and only your terms set them.

A consumer guest must know the deposit and the cancellation terms before booking

A booking by web, e-mail or phone is a distance contract. Before it is concluded you must tell the consumer, among other things, about the duty to pay a deposit and that there is no right of withdrawal, or on what conditions it is lost (§ 1820(1)(l) and (q)). The booking confirmation in text form must then contain that information, unless the guest received it in text form earlier (§ 1824a(1)).

For accommodation on a fixed date, the guest has no 14-day right of withdrawal (§ 1837). The guest can cancel only under your terms or under § 2330, so the cancellation terms must be visible in advance, not only after payment.

Terms must not create a significant imbalance of rights to the consumer's detriment, otherwise they are abusive (§ 1813(1)). An abusive term is disregarded, unless the consumer invokes it (§ 1815). The law gives no fixed limit, the test looks at the nature of the obligation, the other terms and all the circumstances (§ 1813(2)).

Write the cancellation terms as bands of days and a percentage of the total price

Good terms can be calculated without asking anyone. Put into them:

  • bands by the number of days between cancellation and arrival, each with a percentage,
  • what the fee is calculated from, most simply the total price of the stay, not the deposit,
  • a separate line for a no-show,
  • whether the fee may exceed what the guest has already paid,
  • how a cancellation is announced and from when it counts,
  • that if you cancel the stay, the guest gets everything back.

An example with invented numbers, not statutory ones. The stay costs CZK 24,000, a 30% deposit is CZK 7,200. The terms say 20% of the total price for a cancellation 15 to 30 days before arrival, and the guest cancels 20 days ahead: the fee is CZK 4,800 and CZK 2,400 goes back. If the terms said 50%, that would be CZK 12,000, but the guest paid only CZK 7,200, so with a cap at the amount paid the fee stays at CZK 7,200.

Settle a cancellation one way: fee, refund and documents

  1. Find out how many days before arrival the guest announced the cancellation and pick the band.
  2. Calculate the fee from the total price and deduct it from what the guest paid.
  3. Return the difference to the guest and issue the documents.

VAT payer: the refunded part of the deposit changes the payment received before the supply, so it is corrected by a correcting tax document (§ 42(1)(c)). You issue it within 15 days of the day the facts decisive for the correction arose, that is the cancellation (§ 42(3)(a) and (5)), and state the reason for the correction on it (§ 45(1)(g)). A non-payer corrects no tax document and gives the guest a confirmation of the fee.

A cancellation fee is not payment for a service but compensation for a cancelled booking. The law taxes only a service supplied for consideration (§ 2(1)(b)), and the Court of Justice of the EU ruled the same on a retained hotel deposit (case C-277/05). So show no VAT on the fee document, as whoever shows tax on a document must declare it (§ 108(4)(g)). Check the guest's failure to show up and the tax on the part of the deposit you keep with your accountant.

Summary

  • The law sets neither the deposit amount nor the fee percentages, your terms do.
  • A deposit is a prepaid price (§ 1807), a cancellation fee needs its own basis.
  • That basis is earnest money (§ 1808), a release fee (§ 1992) or a contractual penalty (§ 2048). Without an agreement you have only proven damages (§ 2330(2)).
  • Tell a consumer about the deposit and cancellation before booking (§ 1820(1)) and remember the guest has no 14-day withdrawal for accommodation (§ 1837).
  • Calculate the fee from the total price and the same bands every time.
  • A payer corrects the refunded part of the deposit within 15 days (§ 42(5)) and shows no VAT on the fee document.

What to do now

  • Decide the deposit amount, its due date and the date of the balance, and write them into your terms.
  • Write the cancellation terms as bands of days and percentages of the total price, including a no-show and a cancellation by you, and have a lawyer read them.
  • Check that the guest sees the terms before sending the booking and gets them in the confirmation, and agree the documents for the refund and the fee with your accountant.

Lucián Blažek, zakladatel

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