In practice, participants in transactions have used instruments such as a security deposit for quite some time. The Civil Code of the Russian Federation, however, did not contain norms regulating its application until 2015. Currently, the regulations governing its use are officially in force. In this case, the norms somewhat differently determine its specificity, than it was understood earlier.
Security payment: civil law
There are two norms in the Code pertaining to the use of this tool. The legislation provides its definition and specifies key features. A security payment is a contribution by one of the participants of a relationship in favor of another certain amount. Due to it, the party fulfills the conditions of the transaction. The payment provides, among other things, the obligation to compensate for losses or to pay a penalty upon breach of contract. This provision is fixed art. 381.1 (paragraph 1) of the Code.
The security payment as a way of ensuring the fulfillment of obligations is used in a variety of cases. For example, the rules on its application apply to transactions for which bonds, shares, other securities and items bearing generic attributes are transferred to the account of guarantees. The security payment is provided under the conditional transactions. For example, in the event of specified circumstances, it is included in the account of debt repayment.
It is necessary to clearly understand the properties that a security deposit has. The Civil Code of the Russian Federation does not consider this instrument as a "fine", the amount of which is lost by the debtor in violation of the terms of the transaction. It is used to cover property losses, debt. This follows from the direct interpretation of Art. 381.1, item 1. The norm indicates that the security deposit is the guarantor of the performance of the contractual terms and is included in the settlement of the debt, but is not collected in excess of the established amount. If we consider this instrument as a measure of responsibility, then we should take into account that it will have a compensatory character. In other words, its application is aimed at restoring the position of the creditor that existed before the time of violation of his interests. Accordingly, a security deposit can not act as a means of enrichment.
What conditions need to be met in order to apply a security deposit? The Civil Code does not establish certain requirements for an agreement on its use, including its form. However, for practical reasons and based on the norms of the Code, the document must contain the key conditions agreed by the parties. In particular, the agreement should specify which obligation is ensured by payment, list the circumstances on the basis of which the creditor can satisfy the claims made at his expense. If these conditions do not exist, then the instrument under consideration can not be used. In addition, the agreement should contain a specific amount of payment. It should be borne in mind that its size can vary depending on various circumstances. Therefore, it is advisable to indicate in the contract not a solid amount, but a percentage value.
In paragraph 2 of Art. 381.1 there is an indication of the term of the occurrence of circumstances under which a security deposit may be included in the payment of arrears. With a high degree of probability, the courts will consider the existence of this condition in the agreement mandatory, since any such mentions in the norms are regarded as imperative. Meanwhile, the absence of an indication of the period of the onset of certain circumstances can not lead to the recognition of the transaction as not concluded. This is due to the fact that the security deposit, acting as an accessory (additional) obligation, is tied to the main one. Accordingly, there is an initial contract, in which there is an indication of the time of the onset of the circumstances.
Sphere of distribution
In practice, a security deposit is applied when concluding preliminary, lease, distribution agreements. This tool can perform other functions, except for warranty. For example, its introduction can be used as a condition for the beginning of the fulfillment of the terms of the transaction. In other words, the supplier or contractor does not start paying off the obligations until the payment is received.
Specificity of the onset of circumstances
It is stipulated in paragraphs 2 and 3 of Art. 381.1 of the Code. In the second paragraph, in particular, it is said that in case of non-entry into the stipulated period of time, the party to the transaction can return a security deposit. A similar rule applies also in case of termination of the basic agreement. However, the parties may establish other conditions. For example, participants in a transaction can agree that a security payment will be included in payment for products for recent periods, if the bulk of the products transferred or completed most of the work / services. In this case, there is no reason to doubt that the terms of the transaction will be executed. Similarly, you can apply the instrument in question in the lease agreement. In this case, the amount will close the debt for the last month. This will avoid multiple transfers of funds from the account to the account, since the creditor will already have a security deposit available. Problems with resolving the issue of the return of money to the debtor will also be excluded.
In paragraph 3 of Art. 381.1 of the Code stipulates that the parties may stipulate the condition under which additional deposit or return of the security deposit is made in the event of specific circumstances. This provision gives an opportunity to stimulate the legal behavior of the counterparty. As a rule, it is used when concluding long-term contracts to ensure timely repayment of debt. For example, a creditor can set a commitment limit. In case of its excess, the amount of the deduction also increases. Also, the creditor, on the contrary, can reduce the amount of collateral if the debtor timely repays the obligation.
Difficulties in transactions
The security payment can not be used to secure a non-monetary obligation. They, for example, can be a condition on the timely transfer of the object of lease to the owner, maintaining the object in proper condition and so on. Formally, there is no possibility to provide non-monetary obligations by payment. However, from this situation there is a way out. To use the security deposit, the non-monetary obligation should be converted to cash. The creditor must provide for financial sanctions in the agreement for violation of the terms of the transaction (penalty). And to guarantee its execution will be a security deposit.
The agreement between the parties may provide for the return of the security deposit upon termination of the contract in the absence of violations of its terms. This can happen for various reasons. However, in any case, the procedure should be voluntary on the part of both participants. The agreement may establish compensation for the case of unilateral termination of relations. However, participants often agree that a security deposit is not refundable but is credited against this amount.
Differences from deposit
As was mentioned above, the main function of the security deposit is compensation of probable losses. It does not act as an instrument for punishing a participant who violated the terms of the transaction. This payment differs from the deposit. The latter, by agreement of the parties to the relationship, may be transferred beyond the amount of losses with offset, unless otherwise specified by agreement.
An Important Moment
Unlike many other ways of providing, in addition to the deposit, the payment in question enables the creditor to receive the amount before the violation of the terms of the transaction. Other funds involve the transfer of compensation after the performance of certain actions by the debtor. In the Civil Code there are no prohibitions on the use of a security deposit by the creditor for their own purposes. The deposit is considered in the amount of the agreement. On a security deposit, this rule does not apply unless it is established by the parties. Thus, it allows not only to receive amounts under the basic agreement, but also to have additional financial guarantees.
Subject of transaction
As it is mainly money. Civil turnover until recently required financial security, but it was not explicitly stipulated in the Civil Code. Other funds did not allow guaranteed receipt of money in case the counterparty failed to meet the conditions. The only exception was a bank guarantee. It was formally independent of the main debt and was provided by a solvent organization. The wide spread of this option is hampered by its high cost. At the same time, the collateral is to a certain extent a disadvantage of payment. For example, if it is a large sum, the debtor is unlikely to strive to withdraw it from circulation. In addition, for this he receives no interest. However, the parties can agree on their accrual. Such a payment would have been fully justified. This is due to the fact that the debtor's funds are with the creditor, and the Code does not prohibit the latter from using them for commercial purposes.
In addition to collateral, payment can be used as a "reserve fund". For example, in the conditions of a transaction, the right of the participant, on whose account the funds are kept, may be provided, to spend them on the payment of arrears. So, if the user under the lease has not paid the next amount, the owner can include as a security deposit. In these cases, the agreement should provide for the rules, according to which the owner of the object will notify the tenant of foreclosure. It is advisable to notify the subject in writing. The content of the notice may be included in the claim for violation of the terms of the transaction.
After the end of the lease period, the security deposit can be counted as a fee for the last month or returned to the user. However, at this stage, the latter can have some difficulties. If the owner dishonestly fulfills his obligations, getting back the funds will be extremely problematic. If the tenant complies with the terms of the transaction, then in case of refusal he can apply to the court. The practice of cases of this category is very ambiguous.
Most courts adhere to the position that the right to apply for a security deposit should be established by an agreement between the parties. If it is not foreseen, the actions of the owner paying off the last installment will be declared illegal. In addition, the courts indicate that sending a notice to the user about the foreclosure of the payment is mandatory. Meanwhile, this rule has not been established in the legislation. However, notifying the counterparty, the party to the transaction demonstrates its good faith. Accordingly, the proof of the direction of notification can help to resolve the case.
In general, it can be said that a security deposit can be a sufficiently effective tool for compelling a party to a transaction to properly fulfill its obligations. But when drafting an agreement, it is necessary to clearly stipulate all the conditions. The parties should come to a decision that would not infringe upon their interests. Otherwise, the security deposit will act as a discriminating tool. If the conditions of its application are transparent, then there will be no disputes and difficulties in resolving them.