Security Deposits (Kaució) in Hungary
Learn the rules for residential security deposits in Hungary, including the 3-month court threshold, interest rules, and return procedures.
Legal Disclaimer
This content is for general informational and educational purposes only. It does not constitute legal advice and should not be relied upon as such. Laws change frequently — always verify current regulations and consult a licensed attorney in your jurisdiction for advice specific to your situation. Landager is a property management platform, not a law firm.Information last verified: May 2026.
In Hungary, the security deposit is officially termed óvadék, though it is universally known by the colloquial term kaució. The rules for its handling are primarily governed by the Civil Code (Act V of 2013), which became effective on 15 March 2014, and the Act on the Lease of Residential and Commercial Premises (Act LXXVIII of 1993).
1. The Three-Month Threshold
Hungarian law does not technically 'cap' the deposit, but it provides a strong deterrent against excessive amounts:
- Court Reduction: If the security deposit exceeds three times the monthly rent, the tenant has the right to ask a court to reduce it to a 'reasonable' level (Ptk. 6:343 § (4)).
- Market Standard: Consequently, almost all Hungarian residential leases specify a deposit of exactly 2 or 3 months' rent.
- Base Rent Only: The calculation must be based on the pure rent amount, excluding utility advances or common building charges.
2. No Mandatory Escrow or Interest
Hungary remains one of the few European jurisdictions without a mandatory third-party escrow system for rental deposits:
- Landlord Possession: The landlord is permitted to hold the cash directly in their own bank account.
- Statutory Yield: Under Section 6:343 (3) of the Civil Code, any interest or yield generated by the security deposit belongs to the tenant.
3. Return Deadlines and Reconciliation
The law requires the deposit to be returned upon termination of the lease (Ptk. 6:343 § (2)).
4. Allowable Deductions
A security deposit may be stipulated to secure the performance of an obligation (Ptk. 6:343 § (1)).
Best Practices for Landlords
- Meticulous Handover Protocols: Use the Landager move-in checklist with photos. In Hungary, if you don't have a signed protocol showing the unit was pristine at move-in, a court will almost always rule in favor of the tenant in a damage dispute.
- Keep Separate Accounts: Even though not legally required, keeping deposits in a separate sub-account prevents accidental spending of tenant funds.
- Draft Clear Termination Addendums: When a tenant moves out, sign a document stating exactly how much is being returned immediately and how much is being held for final utility bills.
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