Anyone who rents a home will almost always have to pay a deposit, also called a deposit. This amount serves as security for any damage or unpaid rent. Yet the deposit is often the last point of discussion in a rental relationship: is the amount reasonable and, above all, when must the landlord repay the deposit?
Recent changes in the law have strengthened the position of the tenant, but landlords still wrongly withhold money. In this in-depth article by Arslan Lawyers we explain the legal rules surrounding the deposit. We discuss the new maximum amount, the procedure for return, and how you can reclaim the deposit through the subdistrict court.
Legal Basis: What is a Deposit and What is Allowed?
The deposit is a financial security that the tenant pays at the start of the rental. It is important to understand that this money, despite the landlord managing it, remains the property of the tenant.
The Maximum Security Deposit (Law Change 2023)
The rules regarding the amount of the deposit were tightened on July 1, 2023:
- Contracts Before July 1, 2023: Maximum of three months of basic rent.
- Contracts After July 1, 2023: The landlord may only ask for a maximum of two months of basic rent as a deposit.
Unreasonably High Deposit: If a landlord asks for more than these two months of basic rent (for new contracts), this can be legally challenged. If you do pay, you can object afterwards with our help or take the dispute to court to reclaim the unreasonably high part.
The Procedure: When Must the Deposit Be Refunded?
The law states that the deposit must be repaid as soon as the rental agreement has ended and the property has been correctly delivered without rent arrears or damage.
The Repayment Term and Settlement
The refund must be made within a reasonable period after the end of the rental, usually within 1 to 2 months. From July 1, 2023, the term is legally set at fourteen days after the termination of the rental, unless there are reasons for withholding.
What if the Home Changes Owner?
You may be wondering: “What happens to my deposit if the home is sold during my rental period?” The answer is reassuring: in the event of a change of ownership, you, as a tenant, will not change your right to a refund of the deposit. The new owner - who will become your landlord - is obliged to repay the amount to you once all conditions have been met.
It does not matter to whom you paid the deposit at the time; the current landlord automatically takes over this obligation. Your rights remain unaffected, even if the house has changed hands in the meantime.
What may the landlord use the deposit for?
- Overdue rent or service costs.
- Damage to the rental property that is borne by the tenant.
Note: Other costs, such as administration costs or costs for normal wear and tear, may NOT be deducted from the deposit collected.
Statutory Interest and Written Explanation
If the landlord withholds (part of) the deposit, he must always explain this in writing and in detail. You are entitled to a clear cost estimate.
If the landlord repays the deposit too late (after the 14-day period, unless there are valid reasons), you are also entitled to statutory interest on the amount.
Essential Evidence: Delivery Report and Photos
Discussions about damage and withholding of the deposit can be avoided by correctly determining the condition of the property
Handling report (Inspection)
The handing-over report is the most important proof of the condition of the home when moving in and out. If no report has been drawn up at the start of the tenancy, the burden of proof for the landlord becomes heavier at the end of the tenancy.
What if there is no Delivery Report?
If there is no official report, you must take the initiative yourself:
- Judge
- Notify the Landlord: Send a final, formal letter (registered) in which you declare the landlord in default and demand that the full amount be repaid within a short period.
- Summons: If the landlord does not pay, we will initiate proceedings before the subdistrict court. We then demand the full amount, plus the statutory interest and the legal costs.
- Ruling: The subdistrict court judge assesses the facts and makes a binding decision.
- Assessing whether the requested deposit is lawful.
- Drawing up the formal notice of default.
- Conducting negotiations and/or initiating proceedings before the subdistrict court to reclaim the wrongly withheld deposit.
If the landlord does not want to repay the deposit or wrongly withholds an amount, you can reclaim this through the subdistrict court. The Rental Committee is not authorized in this specific case.
The Process: From Commissioning to Summons
The Role of Arslan Lawyers in Deposits
Disputes about refunding the deposit are the most common rental disputes. We advise and assist both tenants and landlords by:
Costs of Our Services:
We aim to recover the costs for our services from the other party, so that you receive legal assistance without financial barriers.