Direct answer: For a residential tenancy in Germany, a cash deposit may not exceed three months’ basic rent excluding separately stated operating-cost advances or flat charges. The tenant has a statutory right to pay a cash deposit in three equal monthly instalments. The landlord must keep the money separate from personal assets and the interest belongs to the tenant. At the end of the tenancy, the deposit secures legitimate outstanding claims; it is not an automatic payment for repainting or ordinary wear.
Last reviewed: 23 July 2026. General information only; deposit disputes depend on the contract, handover evidence and specific claims.
1. The maximum amount
Section 551(1) BGB limits the agreed security to three times the monthly rent excluding operating costs shown as a flat charge or advance. This is often called three months’ Nettokaltmiete.
Example: if the basic rent is EUR 1,000 and operating-cost advances are EUR 250, the maximum statutory residential deposit is normally EUR 3,000—not EUR 3,750.
2. The right to pay in instalments
For a cash deposit, the tenant may pay in three equal monthly instalments. The first is due at the beginning of the tenancy; the next two are due with the following rent payments. A contractual clause that removes this right to the tenant’s disadvantage is ineffective.
3. How the landlord must hold the money
- The cash deposit must be held at a credit institution at the usual rate for savings deposits with three months’ notice, unless the parties agree another form.
- The deposit must be separated from the landlord’s own assets.
- The interest belongs to the tenant and increases the security.
- Student and youth residences are subject to a statutory exception from the interest obligation.
The separation requirement protects the tenant if the landlord has financial problems. Tenants should keep the contract, bank transfer confirmation and any deposit-account information.
4. Avoid deposit fraud before moving in
- Do not transfer a deposit merely to “reserve” an apartment before a tenancy is concluded.
- Verify the landlord or authorised manager and inspect the apartment.
- Use the account stated in the signed agreement or a later verified written instruction.
- Be cautious if payment is demanded through cash-transfer services, cryptocurrency or an unrelated foreign account.
- Record the condition of the apartment at handover with a signed protocol and dated photographs.
5. What the deposit can secure
The deposit may secure claims arising from the tenancy, including unpaid rent, valid operating-cost balances and compensation for tenant-caused damage. Ordinary wear from contractual use is not automatically damage. The landlord should identify and substantiate any deduction rather than keep the whole deposit without explanation.
6. Return after the tenancy
Section 551 BGB does not state a single fixed return date. The landlord may have a reasonable examination period to check the apartment and quantify open claims. Berlin’s public guidance commonly refers to return within six months where there are no rent arrears or tenant-caused damage. A limited reserve may sometimes remain relevant for an outstanding operating-cost statement, but any retention should be proportionate to the expected claim.
7. A practical tenant checklist at move-out
- Give the correct notice and retain proof of delivery.
- Agree a joint handover appointment.
- Prepare a protocol, photographs and meter readings.
- Return every key and obtain a receipt.
- Provide a forwarding address and bank details.
- Ask for an itemised deposit statement and supporting documents for deductions.
- Set a reasonable written deadline if the undisputed amount is not returned.
8. A practical landlord checklist
- Keep the deposit separate from operating funds from the start.
- Compare move-in and move-out protocols before alleging damage.
- Separate ordinary wear, maintenance and tenant-caused damage.
- Document repair estimates, invoices and rent arrears.
- Return the undisputed balance promptly and explain any reserve.
Frequently asked questions
Can a landlord demand six months’ rent as a residential deposit?
Not as an agreed security governed by section 551 BGB. The normal statutory maximum is three months’ basic rent excluding separately stated operating costs.
Must the tenant pay the entire cash deposit before receiving the keys?
No. The tenant may pay a cash deposit in three equal monthly instalments, with the first due at the beginning of the tenancy.
Can the landlord automatically keep the deposit for painting?
No. The landlord needs a valid contractual and legal claim. Ordinary wear is not automatically recoverable damage.