Rental deposit and landlord bankruptcy
What happens to the deposit if the landlord goes bankrupt? Tenant protection, blocked account.
The blocked account protects the tenant
In Belgium, the law requires that the rental deposit be placed in an individualised account in the tenant’s name at a banking institution. This mechanism provides essential protection: the blocked account does not form part of the landlord’s assets.
In the event of landlord bankruptcy, their creditors cannot seize the rental deposit held in a blocked account. The tenant remains the account holder and will be able to recover their funds at the end of the lease, following the normal procedure.
This principle applies in all three Belgian Regions and is the main argument in favour of mandatory placement of the deposit in a blocked account.
Unblocked deposit: a major risk
If the landlord kept the deposit in hand — an illegal but unfortunately common practice — the tenant faces a very precarious situation in the event of bankruptcy.
| Situation | Tenant protection |
|---|---|
| Deposit in blocked account | Full — outside the landlord’s assets |
| Bank guarantee (PCSW) | Full — the PCSW guarantees the amount |
| Deposit held in hand | Almost none — unsecured creditor |
In the event of bankruptcy with an unblocked deposit:
- The tenant must declare their claim to the trustee within the deadline set by the court
- They will be classified as an unsecured creditor (no priority)
- They will be repaid after priority creditors (State, employees, banks)
- In practice, the chances of recovery are very low
If your landlord has not placed the deposit in a blocked account, demand it immediately by registered letter. If they refuse, apply to the Justice of the Peace without delay. This is your best protection.
Tenant’s steps in case of bankruptcy
The lease continues
The landlord’s bankruptcy does not end the lease. The trustee (appointed by the business court) takes over management of the property pending its potential sale.
Steps to follow
- Contact the trustee to identify yourself as a tenant of the property
- Continue paying rent according to the trustee’s instructions (often to a new account)
- Verify the status of your deposit with your bank — if it is in a blocked account, it is protected
- In case of sale of the property, the lease continues with the new owner (principle of article 1743 of the Civil Code)
See our guide on change of owner and the deposit for the implications of a sale.
Protection advice
- Always insist on a blocked account — it is the only effective protection in case of bankruptcy
- Request an annual bank statement confirming the existence and balance of the deposit account
- Keep proof of the initial transfer of the deposit
- In case of property seizure, contact the trustee or bailiff promptly to assert your rights as a tenant
For a compliant lease providing for mandatory placement of the deposit in a blocked account, use our online lease generator. A rental management software enables the landlord to track all deposits and ensure their compliance.