Housing · Jurisdiction DE

Rental deposit

A rental deposit secures the landlord's claims from the tenancy. A cash deposit is capped and must be kept apart from the landlord's assets.

In more detail

As of the text of Civil Code section 551: a cash deposit may not exceed three months of rent excluding operating costs. The landlord must invest it apart from their own assets with a credit institution at the usual rate for savings deposits with a three-month notice period, unless the parties agree another form of investment. Interest belongs to the tenant. Three equal monthly instalments are allowed. Finmon does not calculate a deposit.

Background

After the tenancy ends, the deposit is returned once it is clear whether the landlord still has claims, for example for damage or an open statement. The statute does not name a fixed number of days. If money is withheld or not returned, a tenants' association is a place to ask. Finmon does not review a handover record and does not draft a letter.

An example

The statutory cap on a cash deposit is three times the rent excluding operating costs. Advance payments for operating costs do not count. Whether the contract provides less is in the contract, not in Finmon.

A common misconception

The deposit belongs to the landlord and is automatically set off against the last rent.

It secures claims and must be invested separately. Setting it off against the rent is not the statute's normal rule.

Source: BGB § 551. Last reviewed: 2026-10-31. Editorially reviewed on 2026-10-31. Next review 2027-10-31. Version 0.2.0. Finmon explains. It does not advise. Not investment, tax or legal advice.