Rental security deposit in Germany

Rental security deposit in Germany

When renting a house or apartment in Germany, most tenants are required to pay a one-time rental security deposit to the landlord. This deposit is locked away for the duration of the tenancy and at its end can be used by the landlord to cover costs like repairs, if you damage something, or debts, if you fail to pay your rent or your bills.

Since tenant rights are carefully regulated in Germany, there are lots of rules surrounding the process of paying, keeping and returning deposits, so it’s good to be aware of what is expected of both landlords and tenants. 

What is a rental deposit (Kaution)? 

Also known as a security deposit, a rental deposit (Mietkaution or, more commonly, just Kaution in German), is a one-off payment made by a tenant when they move into a new apartment. Acting as a kind of safety net, the deposit is kept until the tenancy comes to an end, at which point the landlord can use it in certain circumstances, for instance:

  • If the tenant has not paid their rent
  • If the tenant has caused damage to the apartment and failed to repair it
  • If the tenant has lost any keys that need to be replaced
  • If there are any outstanding utility bills to be paid

If no such repairs or payments are required, then the landlord should return the deposit to the tenant in full. 

How much should a deposit in Germany be?

While there is no standard minimum, the German Civil Code stipulates that a security deposit for a rental in Germany can be no more than three months’ rent. This refers to the “cold rent” (Kaltmiete) which excludes utilities and other expenses. 

If you are renting a furnished apartment, or one with bills included, you might be asked for a higher deposit, since it also covers the cost of replacing or repairing furniture and appliances as well. 

When does the security deposit need to be paid? 

The security deposit needs to be paid before your lease starts - which is when you move in, not when you sign the rental contract. You also have the option of paying it in three installments: one before the start of the lease, one in the first month after the lease starts, and a final installment in the second month.

Your landlord cannot force you to pay the deposit earlier or to pay the deposit before signing the lease. If the landlord is pushing you to pay the deposit early (and especially to pay it before you have even seen the apartment in person), this is a warning sign that it might be a scam. 

How to pay for the security deposit in Germany

There are two ways you can pay for a security deposit in Germany:

  • With your own money, in cash or via bank transfer
  • With a rental deposit guarantee

Cash deposit

Many people pay their own rent deposit in cash, usually via a bank transfer. If you don’t yet have a German bank account, you can usually transfer the money from abroad. Be cautious if the landlord asks you to pay by PayPal or wire transfer, as this is a trick often used by scammers. 

By law, your landlord is obligated to hold your deposit in an “insolvency-proof” bank account separate from their own account. This means that your deposit is safe even if the landlord loses their own financial assets. 

Any interest that your deposit makes while it is being held in a separate account also legally belongs to you. The landlord is supposed to inform you on a yearly basis how much interest has accrued. When the tenancy comes to an end, the landlord is obliged to return the deposit, plus interest, to you (minus any deductions taken for repairs or missed payments). 

Rental deposit guarantee (Mietbürgschaft)

If you’re struggling to get together up to three months’ worth of rent for the security deposit, you might also be able to get a rental deposit guarantee (Mietbürgschaft). Under this arrangement, someone else (often a bank or insurance company, but it could also be a friend or a member of your family) promises to pay the landlord if there is a problem at the end of the tenancy. In exchange, you pay the guarantor a small subscription fee. 

Kautionskasse offers this service in Germany.

Requesting a certificate of deposit

Especially if you pay your deposit in cash to the landlord, it is wise to request a receipt or certificate of deposit from your landlord that proves that they received your security deposit. This will come in useful should you encounter any disagreements later down the line.

A deposit receipt should list the deposit amount, the date it was paid, and the names and addresses of both the landlord and the tenant. 

Getting your rent deposit back

All being well, when you move out of the apartment, you should receive your rent deposit back. In Germany, landlords are given six months from your move-out date to inspect the apartment and give a comprehensive list of deductions. The deposit will only be released when: 

  • You have done a walkthrough with the landlord and agreed that all conditions outlined in the handover protocol (see below) have been met.
  • The annual utilities statement (Nebenkostenabrechnung) has been issued, and the difference between your utility payments and your actual usage has been calculated.

If certain costs are not available when you move out (for instance building operating costs, which are usually issued annually), your landlord may be able to extend this processing period to a maximum of 12 months. In this case, they need to inform you about the delay, and the reasons for it. 

To prevent future disagreements, it’s a good idea to make sure that your rental contract contains a timeline, specifying exactly when and how the security deposit will be returned, and under which circumstances it can be withheld. 

What costs can the landlord deduct from the deposit?

As outlined above, the landlord can use the deposit to:

  • Pay for repairs to the apartment 
  • Cover debts like unpaid rent or utility bills
  • Replace missing keys

The landlord has six months to investigate and let you know about these costs - for instance by providing a detailed invoice. After the six-month deadline passes, they cannot charge you for additional expenses. 

They are legally not allowed to use the deposit:

  • To pay for repairs that can be classified as normal wear and tear, for instance scratches and scuff marks
  • To repair damage that occurred before you moved into the apartment, or damage you did not cause
  • To repair damage not covered by the handover protocol 
  • To “punish” you, for instance with a fine or fee

In the first instance, they should also allow you to make repairs yourself, or pay for someone else to do the repairs, before they take the money from your deposit. If you have liability insurance or home insurance, you may be able to claim the cost of these repairs from your insurer. If you have a pet, your pet insurance may cover the cost of damage caused by your cat or dog. 

How to ensure you get your full deposit back

Taking the following steps during your tenancy will improve the chances of everything running smoothly when it comes to getting your deposit back from your landlord: 

Filling in the handover protocol (Übergabeprotokoll)

When you first move into the apartment, your landlord should provide you with a handover protocol (Übergabeprotokoll). Sometimes also known as an inventory checklist - and sometimes also included in the Wohnungsgeberbestätigung - this important document lists everything in the apartment provided by the landlord, and its condition, with notes on any damage caused by previous tenants. 

You should go through this document very carefully, comparing it with the apartment and its furniture (if it is furnished). If you notice anything that is damaged or broken and not listed on the inventory, you should inform your landlord. 

The handover document should also list the number of apartment keys you receive, and (ideally) the meter readings for gas, electricity and water on your move-in date. It should also contain clauses explaining how the apartment needs to be returned (for instance, if repairs need to be made, if the walls need to be repainted, and so on). This tells you exactly what is expected of you at the handover stage, and gives you the best chance of meeting the landlord’s expectations and getting your deposit back. 

Once you have both agreed, you and your landlord will sign the protocol and put it on file. It can then be referred to at the move out stage, to ensure that all conditions have been met and the deposit can be returned. 

Reporting any damage during your tenancy

Accidents happen. If something is broken or damaged in the apartment during your tenancy, it’s a good idea to inform the landlord about it as soon as possible (and keep records of your communication). This way, when the handover comes around, there won’t be any nasty surprises for the landlord that could cause a misunderstanding. 

Paying your last month of rent

Don’t be tempted to skip your last month of rent, thinking that the deposit can be used to pay for it. As a tenant, you are legally obliged to pay your rent for the duration of your tenancy. The deposit needs to be kept on top of your rent, to cover any possible damages. Failing to pay your last month's rent is a sure-fire way to end things on a sour note with your landlord, and increases the likelihood of there being a disagreement. 

Problems with your landlord: What if they don’t return your deposit?

Once all claims have been settled, the landlord is obliged to release the deposit back to the tenant. This should usually happen within six months, as after six months the landlord loses any claim on the money - however, as outlined above, under certain circumstances this can be extended to a maximum of 12 months. 

If your landlord is withholding your deposit, your first step should be to try to resolve it between yourselves. Send them a letter (using registered post, so you can ensure they receive it - and keep a copy) asking them to explain why they have not yet returned your deposit. 

If this fails, you could consult with your local tenants’ association (Mieterverein or Mieterschutzverein), or speak with a lawyer. If you have legal insurance, it might cover the cost of mediating with your landlord - but only if you took out your policy before the disagreement arose. 

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