Landlord Didn't Bill Utilities on Time? Expect Tens of Thousands in Penalties

It may seem a trifle — a few sheets of numbers a landlord sends the tenant once a year. Yet the annual statement of services connected with the use of a flat became the subject of a dispute that passed through every level of the Czech courts up to the Supreme Court. And the result? The landlords pay over CZK 90,000 in penalties and unjust enrichment. This case shows how expensive it can be to underestimate the administrative duties of letting property.

The claimant, the tenant of a flat in Prague, sought the issue of proper statements of service-charge advances for 2019 to 2022. He also sought the return of almost CZK 35,000 he had paid on the basis of incorrect statements for earlier years, and above all penalties for delay in providing the statement totalling more than CZK 200,000. The landlords argued that the tenant had accepted the original statements and voluntarily paid the amount, which should have settled the parties' mutual obligations.

Mandatory rules cannot be circumvented by agreement

In its earlier decision in this matter, the Supreme Court clearly recalled a fundamental principle: the rules on residential leases are relatively mandatory and protect the tenant as the weaker party. This means that even if a tenant pays an arrears amount from a defective statement, this does not release the landlord from its statutory duties. Section 7 of Act No. 67/2013 Coll. is mandatory and cannot be contracted out of.

A landlord is obliged to provide the services connected with the use of the flat, collect advances and carry out their proper statement for the billing period. That statement must be delivered to the tenant no later than four months after the end of the billing period. Failure to comply automatically gives rise to the tenant's right to a penalty of CZK 50 for each day of delay.

The court stressed that an arrears amount can fall due only on the basis of a proper statement made in accordance with all the rules. A defective statement does not trigger maturity, and if the tenant pays something on its basis, this is unjust enrichment on the landlord's side. That is precisely why the landlords had to return the CZK 34,998 the tenant had paid on the basis of the incorrect statements.

The penalty as a tool to discipline landlords

The key issue was the amount of the penalty. The landlords argued it should be reduced to a symbolic sum, because the tenant had suffered no loss and, moreover, had caused the landlords harm by remaining in the flat without legal title after the lease ended.

The appellate court partially moderated the penalty. For 2018 to 2020 it reduced the daily rate to a quarter, taking into account that the landlords had in good faith regarded the obligations as settled after the tenant paid. For 2021 and 2022, however, it left the penalty at its full amount, because the landlords had been expressly asked to submit a proper statement and had ample time to comply.

The Supreme Court upheld this approach. It recalled that the penalty under Section 13 of Act No. 67/2013 Coll. has above all a preventive and sanctioning function — it puts pressure on the service provider to meet its duty to bill advances properly and on time. The mere absence of loss to the tenant does not automatically mean the penalty should not be paid.

Several conclusions follow for practice. Landlords must realise that a statement of services is not a formality but a mandatory statutory duty with strict sanctions. The four-month time-limit runs regardless of whether the tenant pays advances properly or whether other disputes are under way between the parties. Voluntary payment of an amount from a defective statement does not mean acceptance of that statement or waiver of the right to a penalty.

On the tenants' side, it should be known that the right to a penalty arises automatically on the expiry of the four-month time-limit and does not depend on whether the tenant suffered any loss. The penalty may be moderated by the court, but only taking into account all the circumstances — and if the landlord was alerted to its duty and still failed to comply, no moderation need be granted at all.

This case is a warning to all residential landlords. With an annual lease and delay exceeding a year, the penalty can easily surpass several months' rent. And, as this dispute shows, the courts are not inclined to reduce penalties automatically simply because a landlord cannot be bothered to meet its administrative duties.

Source: Supreme Court, 26 Cdo 309/2026