8 rules for the rent deposit – what you should pay attention to

In most cases, the rent deposit amounts to three cold rents and is therefore a considerable sum. The landlord takes this as security in case the tenant does not pay the rent or does not leave the rental property as it was stated in the contract. If all goes well, the tenant should get the deposit back in full when they move out. So it’s not a loss of money, but should be seen as a kind of investment without interest.

Rental deposit – amount, transfer and deductions

The rental deposit is a not inconsiderable expense, especially for the tenant, and represents security for the landlord. Since it usually involves large amounts of money, it is important to be precise and avoid disputes. To protect landlord and tenant, there are therefore some rules that you can follow.

Tip 1 Apartment handover protocol – check for defects when moving in

The first step before moving in is to insist on a handover protocol when handing over the apartment. As a rule, there is one anyway, as it ensures security of both parties. In this all lack, which exhibits the object are noted. Take enough time during the handover to have a close look at the property. In this way, you can prevent any defects of the previous tenant from falling back on you, which could later reduce your deposit. Find out more about the handover protocol!

Tip 2 individual accounts – deposit separate from assets

In order to ensure the safety of your money, landlords are legally obliged to invest the rent deposit separately from the other assets (BGH, decision dated 9.6.2015, VIII ZR 324/14). If the deposit is handed over in cash, it is usually invested in a savings book which is created especially for this purpose. Here it is also noted that the deposited sum is only used as security for the lease and cannot be used otherwise by the landlord. This prevents misuse by the landlord and protects you and your money. To have peace of mind, have the landlord provide you with a copy of the account documents. During the tenancy, the landlord is also not allowed to touch your deposit without further ado and use it for other things (BGH, ruling dated 7.5.2014, VIII ZR 234/13).

Tip 3 Installments – Pay the deposit in installments

Some legal facts about the rental deposit that you probably did not know. You are not obliged to hand over the entire rental deposit to the landlord at once, even if the landlord asks you to do so. The law requires that you can pay the deposit in three equal monthly instalments. For this, the first of the three payments must be made at the beginning of the tenancy. The other two instalments are due in the next two months together with the rent payments (§ 551 para. 2 BGB). Also, a landlord may not require a deposit from them that is higher than three months’ rent (Section 551(1) BGB). This method is easier for many than raising the entire deposit amount at once. After paying the deposit, whether in instalments or all at once, insist on a statement of account in any case, as explained in tip 2. This way you are sure that the landlord cannot use your deposit for any other purpose.

Tip 4 Guarantee – deposit not from savings book

Normally, it is common to take the deposit for the landlord from a savings account or separate from the saved. After all, the money is not lost, just not available to you for your rental period. This method has long been the only way to cover the deposit when you move in. However, in recent years it has become established to also consider a rent deposit guarantee, if the money is nevertheless sometimes scarce when moving. For this purpose, there are financial investments that are significantly more attractive for the tenant due to higher interest rates than the variant of the savings book. These include, for example, call money or deposit accounts at a bank. But also the rent deposit guarantees represent a suitable alternative. With such a deposit, the rental security can be deposited without cash and in return, an annual contribution is due from you. For this variant you need the consent of the landlord, but this variant gives no disadvantages for him, so it should not be a problem.

Tip 5 Deductions – Look for defects

Deductions from the rent deposit are not good for any tenant. But pay attention, because the landlord is not allowed to deduct something from your security deposit for every little blemish when you move out. Thus, only certain defects constitute grounds for keeping the deposit. Generally speaking, normal signs of use cannot be deducted from the security deposit because they are covered by the rent. These include, for example, a small hole in the wall or a small abrasion on the carpet. Defects caused by them, on the other hand, can be deducted from the deposit. This includes, for example, burn holes from cigarettes in the carpet or a blocked drain pipe that got into this condition through improper use. In such cases, the landlord is allowed to deduct the professional repair from your rental deposit and use it for this purpose.

Tip 6 Cosmetic repair – deduction of the deposit

Another reason that can lead to a reduction of the deposit are cosmetic repairs. Here, however, some rules also apply. The cosmetic repairs to which the landlord can oblige the tenant amount to trifles, such as a fresh wall paint when moving out. However, these obligations may not unreasonably disadvantage the tenant or exempt the landlord from maintenance work. These remain the responsibility of the landlord. However, such obligations for cosmetic repairs are only permissible if they are expressly mentioned in the lease. If they are not, compliance can also not lead to a deduction of the deposit! When moving out, therefore, orientate yourself on your rental contract and comply with the specified cosmetic repairs in order to avoid a reduction of the deposit.

Tip 7 Repayment – handover protocol when moving out

If the tenancy has ended, you should hand over the rented property in the “agreed” condition. If cosmetic repairs have been agreed in the tenancy agreement, you should carry them out. If damage has occurred during the rental period that is attributable to you, you should repair it. It is best to hand over the apartment in the same condition as you received it so as not to jeopardise the repayment of the entire rental deposit.

Do not forget the handover protocol when you move out, so that the landlord cannot hold you responsible for damages afterwards. Both parties should sign and receive a copy of the protocol and thus document the condition of the rental property. After the protocol and the handover has taken place and all existing or non-existing defects have been documented, there is nothing to prevent the payment of your deposit, which, if you have done everything correctly, should be credited in full to your account.

Tip 8 End of the guarantee – repayment of the rent deposit

Disputes also often arise over the repayment of the rent deposit. The landlord has the right to a so-called inspection and consideration period, which he can claim. This means that he can retain the rental deposit to inspect the rental property for defects and faults before returning the deposit. This period can last up to six months, which can cause problems for the tenant. However, if the two parties agree at the time of transfer that there are no defects or outstanding debts, the deposit must be returned quickly. According to case law, this is assumed to be within a few days. In this case, the tenant receives the entire deposit plus interest. However, the landlord also has another right here. He can retain a small part of the rent deposit even after the end of the tenancy for a still outstanding service charge account.