If you rent a fitter’s accommodation, in many cases you will be asked to pay a deposit before moving in. This is not a special feature of short-term rental – even with normal tenancies, the deposit has been common practice for decades. It serves the landlord as a financial security in the event that damage occurs or there is no rent payments. For tenants, on the other hand, it is initially an issue that is incurred in addition to the first rent payment. Anyone who knows how the deposit works, which rules apply and when it needs to be repaid is on the safe side – whether as an individual or as a company that books fitter apartments for employees.
What is a deposit and what is it for?
The deposit – also called security – is an amount of money that the tenant hands over to the landlord at the beginning of the tenancy. It protects the landlord against financial losses that can result from the tenancy: such as damage to the accommodation, unpaid rent or outstanding ancillary costs.
Important to understand: The deposit continues to belong to the tenant. The landlord may only withhold or partially retain them if he can assert legitimate claims after the withdrawal. As long as this is not the case, the deposit must be repaid in full – including any interest if it was invested in a separate account.
How much can the deposit be?
In German residential tenancy law, the maximum deposit amount is regulated by law: it may not exceed three net cold rents. In principle, this also applies to fitter apartments, provided they are subject to residential tenancy law. Other regulations may apply to furnished short-term rentals or commercial tenancies – here it is worth reading the contract carefully.
In practice, many landlords of fitter accommodation require a deposit between one and two months’ rent. In the case of short-term stays – about one or two weeks – a flat-rate security deposit is sometimes customary, which is determined regardless of the rental period.
Payment and storage of the deposit
The deposit is usually due before or upon collection. Usual payment methods are bank transfer, cash payment against receipt or – in the case of company accounts – the settlement of the company. Anyone who pays by bank transfer should clearly state the purpose and keep the payment confirmation.
Landlords of housing are legally obliged to keep the deposit separately from their own assets – for example in a separate deposit account. This protects the tenant in the event of the landlord’s insolvency. In the case of commercial rentals or short-term rentals, this obligation is not always clearly regulated, which is why tenants should ask how the deposit is kept in case of doubt.
The following documents should be kept carefully in connection with the deposit:
- proof of payment or receipt for the deposit paid
- Rental agreement with the agreed deposit regulations
- Handover protocol when moving in with documentation of the condition of the accommodation
- all written communications with the landlord during the tenancy
These documents are crucial in the event of a dispute – especially when it comes to the question of what damage was already there before the move-in.
Deposit for corporate bookings
When companies book fitter accommodation for employees, the deposit usually runs through the company – not through the individual employee. This means that the company is liable for any damage and the deposit is paid from the company budget. For accounting, it is important to book the deposit payment correctly – it is not a business expense, but a security deposit that flows back if you move out properly.
Companies that regularly book fitter apartments for companies should establish clear processes for the deposit processing internally: Who pays? Who oversees the repayment? And who is responsible if damage occurs?
Repayment of the deposit after moving out
Repayment of the deposit is one of the most common points of contention between tenants and landlords. This is often due to the fact that the expectations differ – what the tenant sees as normal wear and tear, the landlord sees as damage. Clear documentation when moving in and out is therefore the most important means of avoiding such conflicts.
After moving out, the landlord has a reasonable period of time to check the accommodation and to assert any claims. What ‘appropriate’ means is not precisely defined by law – in practice, a few weeks are usually considered usual. After that, the deposit must be repaid unless there are any justified retentions.
When may the landlord withhold parts of the deposit?
A partial or complete withholding of the deposit is only permitted if the landlord has specific, verifiable claims. These include:
- Damage that goes beyond normal wear and tear and caused by the tenant
- outstanding rent payments or additional costs
- Costs for a necessary final cleaning if this was contractually agreed and was not carried out
What may not be retained: Costs for normal wear and tear incurred by the contractual use of the apartment. A worn carpet after several months of use is no damage – a fire hole in it.
Anyone who is of the opinion that retentions are unjustified when moving out should complain in writing to the landlord. In many cases, this can be clarified without legal action. Ultimately, the deposit is not a means of pressure, but a fair security – for both sides when it comes to temporary living.