Bookings, deposits and cancellations for small guesthouses: what the law requires

This text is for owners of small accommodation businesses (holiday houses, rooms, rural households) who take bookings by phone, message, email or through a platform such as Booking.com. No rule sets cancellation periods or deposit amounts. The law only sets limits inside which you write your own terms.

In short

• The Law on Consumer Protection of Republika Srpska ("Službeni glasnik RS" no. 101/25) sets no minimum cancellation period, no maximum deposit and no minimum refund. The terms are yours.
• The provisions on distance and off-premises contracts do not apply to a contract for accommodation provided on an exact day or during a set period (Article 57, paragraph 1, point 9). So the consumer's 14-day right to withdraw without giving reasons does not apply either (Article 60, paragraph 3, point 2).
• Terms bind the guest only if they were known before the contract was made (Article 65).
• Terms are regarded in particular as unfair if they let you keep the guest's payment when the guest cancels but give the guest no equal right when you cancel (Article 67, point 4), or impose a penalty out of proportion to the real damage (point 5).
• If you cannot provide the booked accommodation, tell the guest and refund the payment. A term that lets you keep money for a service you did not provide, when the contract was ended on your initiative, is regarded as unfair (Article 67, points 4 and 7). The 14-day refund period in Article 60, paragraph 2 belongs to the distance contract provisions, which do not apply to bookings with fixed dates, so treat it as good practice and confirm the obligation with the market inspection.

Who it applies to

Companies, entrepreneurs and natural persons registered for hospitality activity, when the guest is a consumer, meaning a natural person who acquires goods or services on the market for purposes outside their business or other commercial activity (Article 2, point 1). The law protects only such natural persons. If the guest is a company or agency, the consumer provisions do not apply, so you agree the deposit and cancellation terms by contract.

What to do

1. Write one short set of terms: until when cancellation is free, what is charged after that and what happens on a no-show.
2. Set the deposit. Example, as an idea and not a rule or legal advice: free until 14 days before arrival, half the price from 7 to 13 days, full price within 7 days. Judge whether this is proportionate to the real damage, and adjust by season, since an empty room costs more in high season.
3. Show the terms before the guest confirms: in the offer, in the booking confirmation message and on the listing. If the guest accepted only verbally, keep a written trace (message, email).
4. Check that the rule works both ways. If you keep the payment when the guest cancels, decide what you give back when you cancel (Article 67, points 4 and 7).
5. A cancellation charge should be proportionate to the real damage (Article 67, point 5). Charging the full stay for a cancellation a month ahead can easily be judged disproportionate, because you can resell the room.
6. Standard terms you write in advance, which the guest cannot influence, count as terms that were not individually negotiated (Article 64, paragraph 2). An unfair term is void, while the contract stays in force if it can stand without it (Article 66). The chapter on unfair terms is titled as covering sales contracts and accommodation is a service, so for a specific clause it is wise to check the interpretation with the competent authority.
7. If you use a platform, assign the matching cancellation policy to each rate plan. Check in the platform's partner settings which types of cancellation, prepayment and card guarantee it offers, because they change. The terms the guest sees on the platform must match the ones you apply.
8. If you cannot receive the guest, tell them immediately and refund without delay. A refund within 14 days of the notice is a good benchmark; confirm with the market inspection whether it is also a legal obligation for your booking.

Tips

• Offer two options: a flexible one (somewhat dearer) and a non-refundable one (cheaper). On a platform, link each one to its own rate plan.
• For cancellation because of illness, weather or an impassable road, decide in advance whether you refund or offer another date.
• Do not write into your terms a right to change them unilaterally without a justified reason stated in advance in the contract (Article 67, point 11). Agree any change after booking confirmation with the guest.

Where to go

For a dispute with a guest or the interpretation of a clause, contact the Republička uprava za inspekcijske poslove Republike Srpske (Republic Administration for Inspection Affairs, market inspection), the consumer service of your opština or a consumer protection association. The law lists these bodies among those acting in consumer protection.

Laws and sources

• Zakon o zaštiti potrošača u Republici Srpskoj (Law on Consumer Protection of Republika Srpska, Službeni glasnik RS no. 101/25), text on the Ministry of Trade and Tourism site, Articles 2, 57, 60, 64, 65, 66, 67
• This law replaced the earlier Law on Consumer Protection (nos. 6/12, 63/14, 18/17 and 90/21).