Should I repay my rental property

Deposit & rental agreement - the most important information about the rental deposit in brief!

Nowadays it will hardly be possible to find a rental apartment for which the landlord does not ask his tenant a deposit. It is usually deposited with the landlord by the tenant at the beginning of the tenancy and is intended to protect the landlord from damage caused by the rent. But do you know when you will get it back or what happens to a deposit if the landlord changes due to a change of ownership? The deposit payment as well as its repayment after the end of the tenancy offer all kinds of potential for conflict between tenants and landlords. In the following we answer the most important questions about the subject of "bail":

What is a deposit?

The rental deposit is a voluntary but customary security deposit by the tenant to the landlord in order to secure future claims of the landlord from the tenancy. Such claims include, for example:

  • arrears rents
  • backlog of operating costs
  • expected back payments from the utility bill
  • Damage to the apartment by the tenant
Does the tenant have to pay a deposit to the landlord?

By concluding the rental agreement, no tenant is automatically obliged to pay a rental deposit. However, such a rental security may be agreed in the rental agreement in accordance with § 551 BGB.

What is the maximum amount of the deposit?

The amount of the rental deposit can be negotiated individually. However, there is an absolute upper limit for residential leases: The landlord may never ask for more than three months' rent - without prepayment of additional costs (Section 551 (1) BGB).
Exception: If the tenant wants to expand his apartment so that it is handicapped accessible, the landlord can request additional security for the subsequent dismantling costs.

When does the deposit have to be paid?

The deposit is due for payment at the beginning of the tenancy.

Can the tenant pay the deposit in installments?

If the payment is made in cash or by bank transfer to the landlord, it does not have to be made in full immediately, but can be in three equal installments to be paid. It is only important that the first of the three installments has been received in the landlord's account at the beginning of the tenancy (Section 551 (2) BGB).

Can the landlord demand a rental deposit from the tenant even after the contract has been concluded?

If no deposit has been agreed in the rental agreement, the landlord may without the tenant's consent subsequently no rental deposit desire. A corresponding contract adjustment is by no means obligatory for the tenant.

Does the tenant have to pay his deposit in cash?

When a deposit is agreed in a rental agreement, different ones come out Forms of deposit into consideration.

A so-called deposit guarantee, installment or overdraft facility, the creation of a joint savings book, a savings book with a blocking notice or a savings book of the tenant with the deposit amount, which is then pledged to the landlord, are conceivable.

The parties are completely free as to which form of deposit they ultimately choose in the rental agreement.

The most common is the so-called cash deposit. Here the tenant hands over or transfers the agreed deposit amount to the landlord.

When can the landlord withhold the rental deposit?

The purpose of the rental deposit is to secure possible claims of the landlord based on the tenancy. Therefore, the deposit can only be used for this. Depending on the extent of the claim by the landlord, he may withhold part or all of the deposit and offset it against it. The landlord may not offset the deposit against claims other than those from the rental agreement (BGH, judgment of 11.7.2012, AZ: VIII ZR 36/12).

The landlord may therefore withhold or offset the rent in whole or in part in the event of the following claims:

  • The tenant is in arrears with rental payments
  • The tenant is in arrears with payments of the ancillary costs (operating costs)
  • The tenant has not carried out the agreed (!) Cosmetic repairs
  • The tenant has caused damage to the rental property, which the landlord is now having repaired.

Our tip:

The withholding of the deposit due to Cosmetic repairs but requires that the tenant is responsible for the repairs according to the rental agreement. If this was not explicitly regulated in the rental agreement, the landlord must remedy such defects himself.

If justified defects were found when the apartment was handed over and recorded in the handover protocol, the tenant receives a deadline within which he must correct the defects. If the tenant does not remedy the defects in time, the landlord can take over the removal of the defects at the expense and expense of the tenant and deduct it from the deposit.

If the landlord subsequently discovers additional defects that were not recorded in the handover protocol, these can no longer be asserted. The Handover protocol is binding and the tenant can only be held responsible for damage and defects that have already been recorded in the protocol. It is therefore not permitted for the landlord to withhold part of the rental deposit for such subsequent defects. In this case, the handover protocol serves as evidence that is reliable.

How long can the landlord withhold the rental deposit?

When exactly the landlord has to repay the deposit is not regulated by law. The case law usually grants the landlord one Examination deadline for possible claims due to the tenancy of three to six months. Then he has to pay out the rent deposit (§ 548 BGB).
How long the deadline is in a specific case depends on the circumstances of the individual case. This examination period must be such that the landlord can check whether there are claims against his (former) tenant. For example, it is not uncommon to wait for the utility bill to settle any differences. The time limit to which the landlord is entitled can therefore vary in individual cases up to a year extend.
However, the landlord may only withhold enough money from the deposit to cover the likely counterclaims such as repairs or additional payments. The landlord has to pay the excess amount to the tenant immediately after the end of the tenancy.
It should be noted that this No deadline, if the Rental property already sublet has been.
When the review period has finally passed, the landlord must disclose any counterclaims. If this does not exist, the rent deposit including interest must be paid out.

To whom does the deposit have to be paid out if there are several tenants?

If there are several people on the tenant side, the question arises as to which tenant receives the deposit. The following must be observed:
The deposit can only be reclaimed jointly by all tenants. In individual cases, however, it is conceivable that a tenant will be authorized by the other tenants to demand the return of the deposit for all of them.
There are also problems if only one of the tenants has paid the deposit. He is not entitled to demand the deposit back from the landlord immediately, e.g. if he only moves out himself, but not the others. Here, the person moving out has to deal with his fellow tenants and find a solution. Otherwise he has to wait until the end of the tenancy.

Is it possible to repay the rent deposit before moving out?

In principle, the tenant has no way of obtaining the deposit before this examination period has expired. If the landlord agrees, but could z. B. an already deposited cash deposit can be replaced by a guarantee.

Can the tenant “wake up” the deposit?

Towards the end of a tenancy, the tenant is regularly asked whether he or she can waive the remaining rent payments and instead “wean off” his deposit. However, the Federal Court of Justice (BGH) sees this action by the tenant as a violation of good faith and has therefore declared this to be inadmissible (BGH, judgment of April 10, 2013, Az .: VIII ZR 379/12). The tenant simply has no claim to repayment of the deposit during the current tenancy. This also prohibits "weaning" from the deposit.

What happens to the deposit if I change landlord?

A change of owner of the rental property leads to a change of landlord (§ 566 BGB) and the question arises for those involved, from whom the tenant can now claim the deposit back. In practice, the new landlord often refers the tenant to the original landlord with the reason: "The deposit was paid to the old landlord".
The legislature has recognized this problem and created a solution with Section 566 a of the German Civil Code. This states that the purchaser enters into the rights and obligations of the seller with regard to a deposit that has been paid. This applies regardless of the form of security.
So if a cash deposit has been made, the new owner must repay the money including interest at the end of the tenancy. If he is unable to do so, the previous landlord must ensure that the tenant receives the deposit back (Section 566 a BGB).

What happens to the deposit if the tenant dies?

If the tenant dies, the deposit will not be lost. Rather, after the lease has ended, the heirs can demand the deposit according to the aforementioned standards (Section 1922, Paragraph 1 BGB).

What happens to the deposit if the landlord dies?

If the landlord dies, his heirs will in any case enter into the lease. When the tenancy ends, the tenant is therefore entitled to repayment of the deposit from the heirs as the new landlord (Section 1922 (1) BGB).

When does the right to repayment of the deposit expire?

If the deposit is due for repayment, the tenant must assert his payment claim within three years (§ 195 BGB). Thereafter, the right to repayment of the deposit is statute-barred. The limitation period begins on January 1st of the year following the year in which the deposit was due for repayment (Section 199 (1) BGB).
An example: If the tenancy ends at the end of September 2018, the landlord usually has until the end of March 2019 to review all claims against the tenant. The deposit is therefore due for repayment from April 2019. The limitation period therefore begins on January 1st, 2020. The right to repayment of the deposit expires on December 31st, 2022.

What are the differences between the rental deposit for private tenants and commercial tenants?

In contrast to the private rental deposit, where a maximum of three times the net rent may be requested from the landlord as rental security, there are no restrictions on the amount of the rental deposit in commercial leases. There is no upper limit to the amount of the deposit. It must therefore be agreed individually in the rental agreement. The rent security for commercial leases is therefore usually much higher.

For this reason, cash deposits are rarely deposited in commercial space leases. As a rule, deposit security by means of a house bank or a commercial rental deposit insurance are used.

Do you have further questions about the deposit? Your lawyers for tenancy law will be happy to help you!