Wegweiser Small landlords · Renting out a flat, rights and duties Deutsch

📝 Tenancy agreement and deposit

What the contract should say, how high the deposit may be and how you must invest it.

tenancy agreement deposit rent security instalments investment fixed-term tenancy form

In brief

A residential tenancy agreement does not have to be in writing. Writing is safer for both sides.

  • The deposit may be no more than three times one month's rent excluding service charges.
  • The tenant may pay in three equal monthly instalments.
  • You must invest the deposit at a bank, separately from your own assets.
  • The interest belongs to the tenant.

A fixed-term contract is only allowed on statutory grounds (§ 575 BGB, see Wegweiser Tenants).

Step by step

  1. Draft the contract clearlyRecord rent, additional costs, deposit and start of the tenancy in writing.
  2. Limit the depositAsk for no more than three months' net rent excluding service charges.
  3. Invest separatelyPlace the money in a separate account.
  4. Settle at the end of the tenancySettle the account within a reasonable time after the return of the flat.

Deadlines

3 months' rent
Maximum deposit (excluding service charges)§ 551 Abs. 1 BGB
3 instalments
The tenant may pay the deposit in three equal monthly instalments; the first is due at the start of the tenancy§ 551 Abs. 2 BGB
Watch out – common mistakes
  • A higher deposit is invalid; the tenant can reclaim the excess.
  • Interest increases the security and belongs to the tenant.
  • How long you may keep the deposit after move-out is not set out in the law; not checked.
In depth · legal basis, figures and practice – for advisers and professionals

Rent security, § 551 BGB

The security may be no more than three times the rent for one month, excluding service charges shown as a flat rate or as an advance payment. For sums of money the tenant may pay in three equal monthly instalments. The sum of money must be invested separately from the landlord's assets at a credit institution at the interest rate customary for savings deposits with three months' notice. The returns belong to the tenant. The duty to pay interest does not apply to student and youth residences. Agreements to the contrary to the tenant's disadvantage are invalid.

Link to the rent brake

In areas with a rent brake, you must provide certain information before the tenant makes their contract declaration if you rely on an exception (§ 556g Abs. 1a BGB, see rent level).

Who is responsible
  • Haus & Grund
  • Lawyer specialising in tenancy law
  • Amtsgericht (local court, in a dispute over the deposit)
Further reading
Rent level and rent brakeDefects, cosmetic repairs, handover and return

Quick questions

Worum geht es bei „Tenancy agreement and deposit“?
What the contract should say, how high the deposit may be and how you must invest it.
Which deadlines and figures matter?
  • 3 months' rent: Maximum deposit (excluding service charges) (§ 551 Abs. 1 BGB)
  • 3 instalments: The tenant may pay the deposit in three equal monthly instalments; the first is due at the start of the tenancy (§ 551 Abs. 2 BGB)
What should I do first?
  • Draft the contract clearly: Record rent, additional costs, deposit and start of the tenancy in writing.
  • Limit the deposit: Ask for no more than three months' net rent excluding service charges.
  • Invest separately: Place the money in a separate account.
What do I need to watch out for?
  • A higher deposit is invalid; the tenant can reclaim the excess.
  • Interest increases the security and belongs to the tenant.
  • How long you may keep the deposit after move-out is not set out in the law; not checked.
Evidence
  • Bundesministerium der Justiz, Gesetze im Internet, § 551 BGB, retrieved 20 September 2026
  • Bundesministerium der Justiz, Gesetze im Internet, § 556g BGB, retrieved 20 September 2026
As of

September 2026 · Sources and method

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