Rental Deposit: Amount, Investment and Repayment under § 551 BGB
The rental deposit is capped by law and must be held by the landlord securely and with interest. You do not have to accept a deposit that is too high or improperly regulated.
How high may the deposit be?
Under § 551 (1) BGB, the deposit may amount to no more than three times the monthly net cold rent – that is, the rent excluding operating and heating costs. A higher deposit is invalid to that extent. You can determine the exact upper limit with our deposit calculator.
Payment in three instalments
You are entitled to pay the deposit in three equal monthly instalments (§ 551 (2) BGB). The first instalment is due at the start of the tenancy, the remaining ones together with the following rent payments. A clause requiring full payment in advance is invalid to that extent.
Separate, interest-bearing investment
The landlord must hold the deposit separately from their own assets and protected against insolvency, usually in a dedicated deposit account. The interest belongs to you and increases the deposit. If the landlord does not invest the deposit properly, you may withhold payment.
Repayment after moving out
Once the tenancy has ended, the deposit must be repaid as soon as the landlord no longer has any claims. The landlord may wait for a reasonable review period and retain a portion for a still-outstanding operating cost statement – but not for an unlimited time.
How to check your deposit clause
Check the following: Does the deposit exceed three months' net cold rent? Is payment in instalments excluded? Is there no provision for separate, interest-bearing investment? Such clauses are invalid or put you at a disadvantage.
Relevant law
Frequently asked questions
No more than three months' net cold rent (§ 551 (1) BGB), i.e. excluding operating and heating costs. A higher demand is invalid to that extent.
Yes. Under § 551 (2) BGB you have the right to pay in three equal monthly instalments; the first instalment is due at the start of the tenancy.
Yes. The landlord must hold it separately from their own assets and protected against insolvency; the interest belongs to you.
After the tenancy ends, as soon as there are no longer any outstanding claims. A reasonable review period and a retention for an outstanding operating cost statement are permitted, but not for an unlimited time.
The deposit is valid only up to three months' net cold rent; you do not have to pay the excess amount or can reclaim it.
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General legal information based on your contract — not individual legal advice.