Rent deposits a touchy subject for renters

Rent deposit a sensitive issue for tenants

The most important facts about rent deposits

In many cases, landlords require that a rent deposit be paid when moving into an apartment. Having to give the landlord a large sum of money at once can cause an uncomfortable feeling. If you inform yourself in advance about the rent deposit accordingly, you can save yourself a lot of trouble later as a tenant. Here we explain the most important facts on the subject of rent deposits.

We also offer to help you recover unlawfully withheld rent deposits.

Rent deposit: What is it anyway?

Landlords require payment of a rent deposit in order to have a reserve, z. B. if there are arrears in the payment of rent or if the apartment is damaged. As a result, the landlord does not have to wait for a costly court case to compensate for these damages, but can take them out of the returned security deposit.

In general, it is a matter of free agreement between landlord and tenant, whether and in what form a deposit is provided. It will be handed over to the landlord to move into the apartment.

Important: It is essential to have all the details of the agreed deposit entered in the rental agreement so that there are no problems later on!

Types of rental deposit: not only cash is true

The best known and most common forms of a rent deposit are cash deposit and bank transfer. However, there are several ways to provide the deposit:

Savings book

Here, the rental deposit is placed in a savings account at a credit institution. A declaration of pledge will release it to the landlord. After termination of the lease, the tenant is generally given back the savings book. In any case, the return should be recorded in the lease agreement.

Guarantee/rental guarantee

This is a rather rare form. The guarantee runs through a bank, an insurance company or a third party accepted by the landlord as reliable. The tenant must pay a fee to a bank for providing a guarantee. For this he does not have to pay a deposit to the landlord. If there are claims on the part of the landlord, these are served by the guarantor, who then in turn reclaims the money from the tenant. Beware: the landlord does not have to agree to this type of rental deposit.

Amount of the deposit: one million euros please?

A landlord may not demand a completely astronomical rent deposit. Rather, it must be appropriate to the value of the apartment and any furniture that may be rented along with it. In practice, rent deposits of three gross months' rent are common, but up to six months' rent is allowed.

In principle, there may be a higher deposit, but then there must be a valid security interest of the landlord, such as z. B. a very valuable equipment, which is rented along with it. If this is not present, the tenant can demand the excessive deposit back.

Info: With a corresponding agreement, it is also possible to pay off the rental deposit in installments.

Excessive deposit: What to do?

If the deposit is more than six gross monthly rents, has already been paid and the rental property is fully covered by the Tenancy Rights Act (MRG), it could be a prohibited transfer. From the time of payment, a 10-year period applies in which the redemption can be reclaimed. Through an arbitration board or court, the overcharge can be reclaimed. Because of the formalities and the legal basis, it is advisable to consult a lawyer with experience in rental law or a tenant protection association.

Documentation: keep an accurate record, save trouble

In his own interest, the tenant should document well the events surrounding the handover of a rental deposit. Both an entry in the lease agreement and the issuance of a receipt when the deposit is handed over are highly advisable. Otherwise, if the contract is terminated and the tenant cannot prove that he has handed over the rental deposit, it may be very difficult to recover it.

In addition, an accurate handover record should always be kept when handing over the apartment and signed by both parties so that there are no disputes afterwards about the condition of the apartment when you moved in.

Interest: landlord must invest

With the sum that the tenant hands over to the landlord as a deposit, the landlord is not simply allowed to do with it as he pleases. It applies:

  1. The rental deposit must be invested fruitfully, i.e. at conditions comparable to a savings deposit. Therefore, it does not necessarily have to be invested in the form of a savings account, as long as security and interest yield are equal.

If there are any questions about the assessment, the landlord will have to prove which form he has chosen.

By the way: the interest income of the invested rent deposit is handed over to the tenant after the end of the tenancy – the landlord is not allowed to retain it.

Redemption: There was something else..

According to the MRG, the rent deposit must be returned immediately after returning the apartment. This means that if no defects are found after the handover of the apartment, the landlord must return the deposit including interest to the tenant or. transfer.

If the landlord still has claims against the tenant, z. B. because there is damage in the apartment caused by the tenant, he may retain the outstanding amounts – but only these. Withholding the whole deposit is not allowed. Also the interest is considered as security for the landlord.

They want to recover the rent deposit that was wrongfully withheld by the landlord and need assistance? We will help you to recover the deposit without risk of cost!

Retaining your security deposit: when is it allowed??

Especially after moving out, things can get tricky when landlord and tenant disagree about the repayment of the security deposit. Good news for tenants: Many of the reasons landlords give for withholding (part of) the security deposit are not legally tenable at all. The problem is that landlords often operate in a gray area when it comes to repayment of the security deposit.

In two cases, the landlord is allowed to withhold (part of) the security deposit:

The keyword for both sides here is "ordinary wear and tear". It should be granted to the tenant, especially with a view to the duration of the tenancy. The longer the rental period, the higher the normal wear and tear, of course. However, in principle, the tenant must return the apartment in the condition in which he received it, minus the normal wear and tear just mentioned. Small holes in walls or tiles, for example, are considered normal wear and tear, while carpet glued to new parquet goes beyond that.

The landlord may only make claims against the tenant if the tenant has actually caused damage. In case of doubt, it must be decided on a case-by-case basis what goes beyond normal wear and tear and may therefore be retained from the rent deposit.

If the tenant has not paid the rent, the landlord is allowed to take the missing amount from the security deposit. There is legally again no possibility to wear out the deposit in the last months of the contract. This option would also be extremely unwise for the tenant, since the deposit is to be returned to him if there are no damages in the apartment. If you live off the deposit on your own authority, the landlord is even entitled to bring an action for rent and eviction, since the deposit is not due until the end of the lease agreement.

Landlord does not return deposit: help!

There is a 30-year statute of limitations on the security deposit – that's how long you're allowed to ask for it back as a tenant. If the landlord refuses to pay it back, you should initiate proceedings at a conciliation board or at the district court.

In such a process, it is advantageous to have as much evidence as possible, such as receipts for the payment of the deposit, a handover protocol, as well as photos of the apartment when moving in and out. Again, the only advice that can be given is to seek advice and assistance from a lawyer specializing in landlord-tenant law and/or a tenant protection association.

FAQ about security deposit/rent deposit

In the following, we will once again briefly and clearly answer the most frequently asked questions on the subject of rent deposits.

What is the deposit (rent deposit) and what is its purpose?

The security deposit, or rent deposit, is a financial safeguard for landlords to cover any claims that arise from the tenant during the tenancy and have not been paid when the tenant moves out. It is therefore a security payment for, for example, outstanding rent payments, but also repairs or renovation work if the rental property still has damage after moving out.

Is a deposit obligatory for every rental apartment?

There is no legal basis for the mandatory posting of a deposit. In practice, however, it has become common practice for tenants to deposit a security deposit of a certain amount. If this is the case, this fact must be contractually agreed and recorded. If this contractual agreement is missing, there is also subsequently no obligation for a deposit and can also not be subsequently demanded by the landlord.

How much can a deposit be?

The amount of the deposit is a matter of agreement between the landlord and tenant. A rental deposit in the amount of three gross monthly rents has become established on the market, but up to six monthly rents are permissible. If the landlord or landlady wants to require a higher deposit, this is only permissible if the landlord has a special interest in securing the deposit. To consider in such cases are, for example:

  • The amount of the rent
  • The equipment of the rental property
  • the provision of furnishings

Can an excessive deposit be reclaimed?

In the event that you have paid an excessive rent deposit – i.e. more than six months' rent – this could be a prohibited transfer in the case of old or publicly subsidized new apartments. This can be reclaimed within 10 years from the date of payment.

When and in what form is the deposit to be paid?

If a rental deposit has been agreed, it must be handed over after the lease has been signed. This can be paid in cash, but also in another form (e.g. in the form of a deposit). B. Handing over a savings account, a bank guarantee or a deposit guarantee) happen. In order to be able to prove the transfer of the deposit and its amount after the termination of the lease (if there are proceedings), it should be documented by a receipt or a note in the lease agreement.

What is a deposit guarantee?

The security deposit guarantee is a special form of rental deposit, which is offered by a large number of the insurance companies. Instead of paying the rental deposit all at once, you as a tenant have the option of offering the landlord/landlady a so-called deposit guarantee as security. One of the advantages of this deposit guarantee is that you can use the money that was intended for the deposit for other things (z. B. furnishings of the home) have at their disposal, while you pay the insurance company only a small annual premium. With the deposit guarantee, the landlord/landlady has the advantage and security of an uncomplicated payout in case of damages.

Tip: If you urgently need the money an already existing rent deposit, this can also be subsequently replaced by a deposit guarantee. If you are interested, ask your insurance company if they offer the option of bail bonds.

Can an increase or increase in the deposit be required in the event of a rent increase or contract extension?

In principle, yes. However, as mentioned above, a deposit is not mandatory by law and must be contractually agreed in the event of a deposit transfer. The same applies to a possible deposit increase in case of a rent increase or extension of a temporary tenancy agreement. Also these must be contractual to be valid and obligatory.

In what condition do I have to return my apartment when I move out?

Except for normal or ordinary wear and tear, the rental property must generally be returned as it was rented. In addition, the apartment must be returned broom-clean and, with the exception of rented furniture, empty of movable objects. Furniture, which is rented together with the apartment and listed in the rental contract, must be returned to the landlord/landlady undamaged after the end of the rental period.

What is meant by "ordinary wear and tear"??

Ordinary" wear and tear is when unavoidable signs of use occur during the use (living) of a rented apartment. Examples of this are:

  • Drill holes for mounting pictures or shelves
  • discolorations on the floor due to different incidence of light or regular foot traffic
  • Shadows and edges around pictures or cupboards
  • Or similar

The age of the affected items also plays a role in "ordinary" wear and tear. For example, if a carpet has been in the apartment for many years and has never been replaced, the signs of use are more significant than for a relatively new carpet. This "ordinary" wear and tear does not have to be replaced by the tenant.

What does "broom clean" mean?

If the apartment was handed over in a cleaned condition at the time of renting, it must be subjected to a basic cleaning before being returned. The condition after this basic cleaning is called "broom clean". Also co-rented furniture is to be cleaned.

Tip: In order to be able to prove in case of dispute that you have taken over the apartment in a "broom-clean" condition, you should document this (z. B. document by means of photos).

When do I have to get back the deposited deposit?

In a nutshell: the deposit must be returned by the landlord/landlady immediately after termination of the lease and return of the apartment – incl. interest or less the cost of repairing any damage – be refunded.

When may the landlord retain the deposit?

A landlord is only allowed to retain the amounts from the deposit that are used for the repayment of his own claims. Two groups of cases are conceivable here:

In principle, the tenant must return the apartment in the condition in which he received it. If the tenant returns the apartment with damages, the landlord is entitled to retain the deposit or the rental fee. Retain part of it. However, the landlord must accept normal wear and tear and may not retain anything from the deposit for it. As in the point "What is understood by ordinary wear and tear??"As already mentioned, minor holes in walls or tiles, for example, are considered normal wear and tear, while carpeting glued to new parquet flooring goes beyond this. The longer the rental period, the higher is of course the usual wear and tear.

If the tenant has not paid the rent, the landlord is allowed to take the missing amount from the deposit. There is no legal possibility to withdraw the deposit in the last months of the contract. This option would also be unwise for the tenant, since the deposit is to be returned to him if there are no damages in the apartment. If one unauthorizedly lives off the deposit, the landlord is even entitled to bring a rent and eviction action, since the deposit is only due after the end of the lease agreement.

As a tenant, do I have to paint an apartment before returning it?

In principle, the tenant must return the rental property as he took it over. In this context, the question often arises as to whether a legally effective obligation to paint has been agreed in the rental agreement.

If nothing has been agreed upon, the general rule is that the tenant is only obligated to paint the walls if they have been used beyond normal wear and tear or if they are. if a color was chosen that radically deviates from conventional usage (z. B. black walls).

If, on the other hand, an obligation to paint has been expressly agreed, failure to do so may result in the landlord reducing the deposit and the tenant having to fight over it.

However, different courts rule differently and it is currently disputed how to formulate an effective paint-out obligation in the contract. However, numerous clauses in leases have already been deemed invalid, so it may be worth fighting over the cost of painting them out.

Ultimately, the tenant must weigh whether to return the apartment without painting it out and fight with the landlord over the deposit, or to paint it out and then check the rent or. may reclaim the cost of painting it out.

When does the deposit expire?

The deposit only becomes time-barred after 30 years – that's how long you can demand it back as a tenant. If the landlord refuses to repay, one should file a case with a mediation board or district court.

You would like to reclaim the rental deposit illegally withheld by the landlord and need assistance? We help you recover the deposit without cost risk!

In advance of such a lawsuit, as a tenant, they should secure as much evidence as possible, such as receipts for the payment of the deposit, a handover protocol and photos of the apartment when they moved in and moved out.