Rent Deposit (Mietkaution) Rules

The legal cap on what landlords can demand

Under §551 BGB, a landlord cannot demand more than three months of Kaltmiete (cold rent) as a deposit. Kaltmiete is the base rent without operating costs (Nebenkosten) — heating, maintenance, garbage, building insurance are not included in the calculation.

Example: If your contract shows Kaltmiete EUR 900 and Nebenkosten EUR 200 (Warmmiete EUR 1,100 total), the maximum deposit is EUR 2,700 (3 × EUR 900). Any demand above EUR 2,700 is legally void — that portion of the contract clause has no force, and you are not obligated to pay it even if you signed.

Many listings in competitive markets advertise with Warmmiete figures. Always extract the Kaltmiete from the contract and apply the cap calculation to that number.

Your right to pay in installments

You have a statutory right under §551 BGB to pay the deposit in three equal monthly installments, regardless of what the contract says. The first installment is due at the start of the tenancy (move-in date), the second one month later, and the third the month after that.

A contract clause requiring the full deposit upfront can be agreed to voluntarily — but if you choose to invoke your installment right, the landlord cannot enforce the full-upfront clause against you. It is void by law.

In practice: In tight rental markets, many tenants pay upfront as a competitive signal. Know that the installment right exists and use it if cash flow at move-in is a concern. There is no legal downside to exercising it.

How the landlord must hold your deposit

The landlord is required to deposit your money in a separate, interest-bearing savings account (Sparanlage) that is clearly separated from their own assets (§551 Abs. 3 BGB). This protects the deposit in the event of landlord insolvency — a third-party creditor cannot seize a properly held deposit.

You are entitled to request written confirmation of the deposit account. You are also entitled to the accrued interest when the deposit is returned.

In practice, many landlords do not comply strictly with this requirement and place deposits in a regular account. Document your payment carefully regardless — bank transfer records are your primary evidence.

Alternatives to a cash deposit

If cash is constrained at move-in, consider a Mietkautionsbürgschaft (deposit guarantee): a bank or insurance company guarantees the deposit amount to the landlord instead of you paying cash. You pay an annual premium — typically 3–5% of the deposit amount.

Example: For a EUR 2,700 deposit, the annual premium is roughly EUR 80–135. Over a 3-year tenancy this costs EUR 240–405 — less than one month's Kaltmiete.

Providers include Kautionsfrei, Deutsche Kautionskasse, and several banks and insurance companies. Not all landlords accept guarantees — confirm acceptance before applying. Some landlords in high-demand areas prefer cash deposits as a sign of financial stability.

The move-in protocol: your most important protection

Before or on move-in day, complete a written Übergabeprotokoll (handover protocol) that documents every existing defect — scratches, marks, damage to walls, appliances, windows, floors. Photograph everything. Both you and the landlord (or their representative) sign the protocol.

Without a signed move-in protocol, proving that damage pre-existed your tenancy becomes nearly impossible in a dispute. The landlord can claim you caused defects that were present before you arrived.

The protocol must include:

• Date of handover
• Meter readings (electricity, gas, water)
• Condition of walls, floors, windows, doors, and fixtures
• Any existing damage noted with description
• Signatures of both parties

Keep a copy in a safe place alongside your lease and payment records.

Getting your deposit back

After you move out, the landlord has up to 6 months to return the deposit or provide written justification for any deductions. Some landlords wait for the final Nebenkosten annual statement (Nebenkostenabrechnung) before returning the full amount — this is legally permissible and explains delays up to 12 months in some cases.

Legitimate deductions:

• Unpaid rent
• Unpaid Nebenkosten (operating costs)
• Damage beyond normal wear and tear (with itemized repair receipts)

Not legitimate:

• Normal wear (faded paint, small nail holes for pictures, minor floor scuffs consistent with tenancy length)
• Cosmetic repainting if you lived there for several years (courts generally hold that paint wear is normal for tenancies of 5+ years)
• Repairs you were not notified about while living there

If deductions are made, demand itemized written justification with receipts. If the landlord refuses to return the deposit without justification, send a formal demand letter (Mahnung) with a 14-day deadline. If unresolved, a Mieterverein (tenant association) or small claims procedure (Mahnbescheid) is the next step.

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