Renting
Rental deposit
Three months' net rent, payable in three instalments, held separately from the landlord's own money and earning interest that belongs to you. Section 551 of the Civil Code is four sentences long and is broken more often than almost any other rule in German tenancy law.
Lawful maximum
—- Agreed
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- Monthly instalment
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- Interest over the term
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- Returned at the end
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The four rules
What this means for you
How the balance grows
Interest belongs to you and increases the security.
Getting it back
What section 551 actually says
Four sentences, and each one matters. The deposit may not exceed three months' net rent — net meaning the rent alone, without the service charge advance, which is why a flat advertised at 1,250 euros "warm" may only carry a deposit based on the cold rent inside that figure. The tenant may pay it in three equal instalments, the first when the tenancy starts. The landlord must keep it separate from their own assets and invest it at the ordinary rate for savings deposits at three months' notice, and the interest belongs to the tenant. Any agreement that departs from this to the tenant's disadvantage is simply void, even a signed one.
The separation requirement is the one most often ignored and the one that matters most. If the landlord goes insolvent, money held in a designated deposit account is outside the estate and comes back to the tenant. Money sitting in the landlord's current account does not.
Getting it back
There is no statutory deadline. The landlord is allowed a reasonable period to inspect the flat and settle accounts, which the courts generally put at three to six months. Where the service charge statement for the final year is still outstanding, a proportionate part may be retained until it is issued — but only a proportionate part, not the whole sum.
Deductions require actual damage. Normal wear from living in the flat is what the rent pays for: faded paint, worn carpet, the holes left by ordinary picture hooks. Blanket clauses obliging tenants to redecorate on a fixed schedule have been struck down repeatedly by the Federal Court of Justice and are usually void.