Rental deposit guarantee: important tips for rental security in Germany


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When moving into a new apartment in Germany, you will usually have to leave a rental deposit. What about a rental deposit guarantee? Find out here

Rental deposit guarantee: Rental deposits in Germany are a large sum that is added to the cost of moving to an apartment, furniture, etc. Fortunately, there are other ways to pay the rental deposit in addition to cash payments, such as a deposit guarantee. Find out everything else and legal information about the deposit here.

What is a rental deposit guarantee?

The rent deposit guarantee is referred to as a cashless alternative to the cash deposit. The rental deposit guarantee offers the same security as a cash deposit. In contrast to the cash deposit, an amount of money of up to three net cold rents, which you either hand over to the landlord or transfer directly to a deposit account, with the rent guarantee no money flows between tenant and landlord. Other common names for the rental deposit guarantee are rental deposit insurance or rental deposit policy.

What a rental deposit in Germany means to you

  • The deposit may amount to a maximum of three net rents.
  • If you are to blame for major damage to the apartment, the landlord may withhold the deposit.
  • The condition of the apartment and any damage that may be present are recorded in a handover report.
  • You can pay the deposit in cash or in installments , create a deposit account or deposit savings book, or alternatively take out a rental guarantee .
rental deposit guarantee

Rental deposit – what is it exactly?

Every landlord requires a rental deposit as security in order to be protected against possible rental damage. If you get into debt, he can fall back on it. This includes rent or operating costs that have not been paid and damage caused to the rental property. The amount of the rent deposit is regulated by law in Germany and may amount to a maximum of three net rents.

How does a rental deposit guarantee work?

The rent deposit guarantee is the only cashless form of rent security. Instead of cash, a certificate is deposited with the landlord. It guarantees him that a guarantor is liable in the event of damage to the rent. Recognized private individuals, credit institutions and insurance companies can act as guarantors. If the guarantor is a bank or an insurance company, you as the tenant pay a small fee for assuming liability.

  1. The landlord asks for a rental deposit from you. In this way, he protects himself in the event of damage.
  2. Instead of depositing an amount of money as a cash deposit, you now take out a guarantee online.
  3. The guarantee document comes a few working days later by mail. You simply hand this over to the landlord.
  4. You keep your money and can use it for more important things.

Not all damage is created equal

As soon as you move out of your rental property, you will arrange a meeting with your landlord or the administration, at which possible damage will be recorded and the further procedure will be discussed. Because not all damage will necessarily be accepted and covered by the deposit.

Slight damage that inevitably occurs is perfectly fine and is the result of the natural use of the rental property. So you don’t have to worry about lightly soiled wallpaper or a few broken tiles. 

This is different in the case of damage caused willfully or through gross negligence. These include, for example, cigarette burns in the carpet, torn wallpaper or broken window panes. You have to pay for the repair of this damage out of your own pocket and you will be given a deadline when the apartment is handed over within which this damage must be removed.

When the apartment is handed over , a handover protocol is filled out in which all existing damage is recorded. This is deemed to be proof in court , which is why you should always make sure that all damage is logged. If no damage is noted, the landlord has to pay you back the full deposit.

rental deposit guarantee

How long can your deposit be withheld?

Under certain circumstances, the landlord is allowed to withhold your deposit for a certain period of time . However, if you have already handed over the apartment and no payment is open, you can request the deposit back as a tenant immediately. This corresponds to a period of a few days. 

It is different if your landlord first has to check whether there has been any damage to the apartment and whether it has been remedied or whether there are any outstanding payments. In this case, the landlord is assigned six months for the examination and consideration period.

If your move-out takes place in the middle of the annual billing dates of the, the landlord may allow up to twelve months for the repayment. It is important, however, that not the entire deposit may be withheld, but only as much as is required for the utility bill. As a tenant, you can ask for the rest to be returned immediately.

There is no deadline if the landlord’s remaining claims are not met. For example, if there are still outstanding claims that you refuse to pay, the landlord may withhold your deposit until everything has been paid.

Cash payment with the rental deposit

If after signing your rental agreement you have to leave a cash deposit, you have various options. You can either set up a deposit account or rent deposit savings book, pay the deposit in installments or take out a rent deposit guarantee.

1. Rental deposit savings book

The rental deposit savings book is the most common type of deposit. The easiest option is for you as a tenant to create a savings account and then pledge it to your landlord. 

However, it is also possible to set up the account as a landlord and to store the deposit money on it. In general, this method is not recommended because the interest rates are very low and will not increase significantly in the future.

2. Overnight money account

The overnight account is an alternative to the rental deposit savings book, but it is characterized by significantly better interest rates. As a tenant, you create the account in your name as with a savings account and pay in the required rental deposit. 

In retrospect, it is pledged to the landlord and you no longer have access to it. But even the landlord cannot dispose of it without your consent. The overnight money account is therefore a very secure way of investing your rental deposit.

3. Installment payments

If you don’t have the rental deposit to hand straight away and still don’t want to go into debt through a rental deposit guarantee, you can easily pay your deposit in installments. 

According to the German Civil Code § 551 Abs. 2 BGB you as a tenant have the right to pay the entire amount in three monthly installments . It is important that the first installment is not due immediately after the lease is signed, but only at the beginning of the lease. The remaining installments are to be paid in the following two months.

rental deposit guarantee

The rent deposit guarantee

If you want to save the money for the deposit or simply want to spend it elsewhere, you can opt for the rent deposit guarantee.

Tenants pay an annual contribution to a corresponding provider and in return receive a guarantee document, which is deposited with the landlord. This is just as secure as with the cash deposit. Incidentally, the rent deposit guarantee is suitable for private and commercial tenancies .

The rent deposit guarantee explained in a nutshell

Not everyone has three net rents in their bank account. If the basic rent is 700 euros, you have to pay a rent deposit of 2,100 euros. If that’s the case for you, then you should consider whether a rental deposit guarantee is best for you. A bank or insurance company can vouch for you. A rent deposit guarantee can be concluded quickly, and many insurance companies also offer their service online. For this you should agree with the landlord whether he will accept this type of guarantee.

It’s that easy:

  • The simple online application can be completed in full on the home computer as well as with a smartphone or tablet while on the go – no signature is required.
  • A few days later, the rent deposit guarantee arrives by post.
  • To protect the landlord, this is deposited with him – ideally when the apartment is handed over with a corresponding note in the apartment handover protocol.
  • After the end of the tenancy, the owner returns the guarantee document to the tenant. This eliminates the long wait for the repayment of the rental deposit if it is delayed by the landlord.

Advantages of the rental deposit guarantee

  • The rent deposit guarantee is not only available to new tenants, but also existing tenants can use it to trigger a cash deposit that has already been deposited.
  • This is particularly useful if you are currently facing financial difficulties and are considering taking out a loan.
  • The rent deposit guarantee contributes to liquidity without reducing the credit line.
  • In addition, the inflation rate is currently higher than the average interest rate on deposit accounts, which means that the sum is gradually consumed by inflation over the years and the monetary value decreases.

How much does a rental deposit guarantee cost?

The contribution of the rental deposit guarantee is calculated as a percentage of the amount of the individual rental deposit. There is no uniform fixed amount here; the contribution varies. The contribution also depends on the range of services offered by the guarantor, which may be extended to include special safeguards. For example, first-demand guarantees are often cheaper than non-first-demand guarantees. The latter is the safer alternative for the tenant.

What should tenants and landlords know about the rental deposit?

Tenants should know that about the security deposit

  • Tenants do not have to leave cash as a deposit, but only pay an annual contribution to the insurance company for the deposit guarantee.
  • The insurance will check the legality of the claims made by the landlord for you.
  • If the insured event occurs, the tenant must reimburse the amount in full. You do not pay off your rental deposit with the annual fees.

This is what landlords should know about the security deposit

  • Landlords receive a deposit guarantee from the insurance company in the amount of the deposit amount – provided the landlord accepts a guarantee.
  • If the landlord asserts claims, these will be checked and settled by the insurance company.
  • The guarantee certificate is only issued if the tenant’s credit check is positive.
rental deposit guarantee

What happens if:

1. Your landlord does not repay the deposit?

If your landlord does not repay your deposit after the end of the tenancy, there can be many reasons. First of all, you should check whether you have done everything necessary on your part or whether, for example, there are still open bills. If you are sure that everything has been paid for and that you have eliminated possible damage or the like in your rental property, you can go a step further and talk to your landlord. This should always be done before you take other steps.

It is possible that your landlord was simply sick and unable to take care of paying the deposit. If the conversation fails and you cannot find a solution, you should give your landlord a written deadlineput. The best thing to do is to write a letter and send it by registered mail with acknowledgment of receipt so that it is delivered safely. This should make it clear to the landlord that you will take legal action after the deadline.

If you don’t get a response to your deadline, you should visit a lawyer and discuss how to proceed. If you want to do without a lawyer, you have the option of going to the dunning court and opening a dunning procedure. Your landlord will then receive a dunning notice in which a period of 14 days is set. In most cases this is followed up and the case is settled.

If your landlord objects and still refuses to pay you the deposit, you should carefully threaten a criminal complaint. If you did without a lawyer before, he is now urgently needed. Because if your landlord is still unimpressed, the matter will go to court.

2. Your landlord goes bankrupt?

Your landlord is legally obliged to invest the rental deposit in an escrow account with a bank, regardless of his own assets . If this is the case, then you don’t need to worry as your money will then not be affected by the bankruptcy. However, if your landlord acted against the law, things are looking rather bad for you. The chance of getting your deposit back is small, depending on the administration.

If you find out that your landlord is insolvent, you should inform yourself immediately whether it is a receivership or insolvency administrationtakes place. If it is a receivership, you have a good chance of getting your money back. The administrator takes over all rights of the landlord and thus also that of subsequently setting up a deposit account for the tenant. If he does not create an account, you can withhold the rent until the deposit amount has been reached. 

If it is again a bankruptcy administration, the probability that you will get your money back is very low. Because the insolvency administrator is not obliged to deduct rental deposits from the bankruptcy estate. If your money was not invested insolvency-proof, you have to join the ranks of the creditors and you will probably not get the deposit back.

3. Your landlord dies

If your landlord dies, there are no consequences for you . If there is an inheritance, it will take over the lease and if not, it will be taken over by the state. In both cases, the rental contract remains valid and unchanged and you will get your deposit back after the end of the rental under normal conditions.

4. If there is a change of landlord

Even changing your landlord has no effect on the existing rental agreement and the payment of your rental deposit. The purchaser of the rental property is responsible for ensuring that the previous landlord gives him the rental deposit and is obliged to pay it out. If this is not possible for him after the end of the tenancy, the previous landlord is still obliged to pay you back your sum.

Does a rental deposit guarantee make sense?

The rental deposit guarantee is suitable for all tenants who want to keep the money for the rental deposit and want a secure and cashless alternative.

With a rental deposit guarantee, it is not necessary to pay a cash deposit, you as the tenant can keep the money and use it to for other expenses within the apartment.

A rent deposit guarantee makes sense if…

  • You want to be able to manage your money independently instead of being unable to access it for years because it is deposited with the landlord as a cash deposit.
  • If you move, the old rental deposit has not yet been repaid. Instead of having to provide a security deposit of up to three net cold rents a second time, the waiting time until repayment can be bridged with a guarantee for the new apartment. 
  • A child has arrived and the children’s room can be furnished with the money saved for the rental deposit.
  • There is a desire to improve the standard of living: those who do not yet have their income or only have a low income can use the money saved to buy new furniture or quickly replace a broken washing machine with a new one.
  • You want extra security: Any claims by the landlord are checked by experts before they are paid out. The unlawful withholding of the rental deposit by the landlord is no longer possible.
Expaturm aims to help educate Expats in Germany on key issues that they will have to deal with while living in Germany by providing everything you need to know about Banking, Healthcare, Lifestyle, and Housing in Germany


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