Korfine guarantee
escrow account or insurance?
Many tenants and landlords ask themselves the same question: is the Korfine rental guarantee a blocked bank account or an insurance policy? Confusion is common, because the desired result is similar: to provide security for the lessor while blocking a sum belonging to the lessee.
We explain the exact nature of the Korfine rental guarantee, how it differs from a traditional blocked bank account, and the practical consequences for the tenant and landlord.
Why do we talk about a Korfine escrow account?
In everyday language, the term “Korfine blocked account” is often used. However, this term is legally incorrect.
The confusion arises from the fact that the operation is similar to a rental guarantee with a blocked bank account:
- the money is effectively frozen during the lease,
- the lessor benefits from security comparable to a blocked bank account,
- release is only possible with the agreement of the parties or a court judgment.
But the Korfine rental guarantee operates on a different legal and financial basis: it is based on a capitalization insurance contract – branch 26.
Complete our online rental guarantee form on Garantie.be in just a few hours. You don’t block any money, because we work like a bank guarantee
The Korfine rental guarantee is not a bank account
The specific features that differentiate the blocked bank account from the Korfine contract are that it is :
- open in a bank,
- subject to banking regulations,
- covered by the deposit guarantee scheme (up to €100,000),
- generally unpaid or very poorly paid.
The Korfine guarantee does not meet these criteria. It is not held in a bank, and therefore does not fall under the traditional banking regime.
The Korfine rental guarantee is an insurance policy (branch 26).
The Korfine rental guarantee is based on a branch 26 capitalization contract, underwritten by an approved Belgian insurance company.
What is branch 26?
- Biometric risk-free life insurance product
- With a single payment
- Capital guaranteed by the insurer
- A guaranteed interest rate on subscription
- A contract governed by Belgian law
The tenant’s money is therefore invested in an insurance product and not in a bank account.
Who holds the money and who is protected?
The tenant retains ownership of the capital. The lessor has a right to the sum in the event of rental damage or debts, while the insurer guarantees the capital.
Korfine acts as an insurance broker, without holding the funds. The capital is legally assigned as a guarantee in favor of the lessor.
Comparison: Korfine vs. blocked bank account
| Criteria | Korfine | Blocked bank account |
|---|---|---|
| Nature | Branch 26 insurance/capitalization contract | Blocked bank account |
| Capital guarantee | Yes, guaranteed by the insurer | Yes, according to bank conditions |
| Deposit guarantee | No, it’s not a bank deposit | Yes, under the deposit guarantee scheme, subject to conditions |
| Interest | Often a guaranteed interest rate on subscription | Low or non-existent, depending on the bank |
| Fees | Often variable entry fees | Generally few or no fees, depending on the bank |
| Release | Lessor + tenant agreement or judgment | Lessor + tenant agreement or judgment |
What are the practical consequences for tenants?
Before choosing Korfine, it is important to understand the following points:
- the money is completely tied up during the lease,
- it’s not available when needed,
- recovery depends on the lessor’s agreement or a court judgment,
- entry fees may apply,
- interest is subject to withholding tax.
Frequently asked questions
Can Korfine be called a blocked account?
In everyday language, yes, but not legally.
Is my money safe with Korfine?
Yes, the capital is guaranteed by an approved Belgian insurance company.
Can I change my mind after subscribing?
No, the capital remains frozen during the lease, unless the lessor agrees otherwise or a court order is made.
