Rental deposit under § 551 BGB: how much, how payable, how held?
Reading time 7 min · Updated 05.07.2026
Key facts at a glance
- Ceiling: three months’ net cold rent (§ 551 (1)) — operating costs excluded.
- Payable in three equal instalments; first at start, then with the next months (§ 551 (2)).
- Held separately, insolvency-proof, at the savings rate; interest adds to the deposit (§ 551 (3)).
- An excessive agreement is void — the tenant can reclaim the surplus.
- Return after move-out within a reasonable review period (BGH: usually up to 6 months).
The ceiling: three months’ net cold rent
§ 551 (1) caps any residential security at three times the net cold rent — rent without operating- and heating-cost advances. Any higher agreement is void as to the surplus, which the tenant can reclaim. Combined securities may not exceed the cap either.
| Net cold rent | Max deposit (× 3) | Instalment (1/3) |
|---|---|---|
| €500.00 | €1,500.00 | €500.00 |
| €800.00 | €2,400.00 | €800.00 |
| €1,150.00 | €3,450.00 | €1,150.00 |
Payment in three instalments (§ 551 (2))
The tenant may pay in three equal monthly instalments: the first at the start, the others with the next two rent payments. A clause demanding the full deposit up front is void.
Separate, interest-bearing holding (§ 551 (3))
The landlord must hold a cash deposit separately from their assets, insolvency-proof, at least at the usual savings rate with three months’ notice. The interest belongs to the tenant and increases the security.
Use and return
During the tenancy the landlord may generally not touch the deposit for disputed claims. After return of the flat, the deposit plus interest is repayable once no secured claims remain; a reasonable review period applies (up to six months in some cases), and a proportionate amount may be withheld pending an operating-cost statement.
How Torch Real Estate solves this
Torch Real Estate keeps a deposit ledger per contract — agreed amount, receipts, interest, deductions and return with balance and status — and warns when the agreed deposit exceeds three months’ net rent (§ 551 (1)).
Frequently asked questions
How high may the deposit be?+
At most three months’ net cold rent (§ 551 (1)) — cold rent without operating-cost advances. At €800 net, the maximum is €2,400. Any excess agreement is void as to the surplus.
Can the tenant pay in instalments?+
Yes — three equal monthly instalments (§ 551 (2)). The first is due at the start, the others with the next two rent payments. Terms to the tenant’s disadvantage are void.
How must the landlord hold the deposit?+
Separately from their own assets, insolvency-proof, at the usual savings rate with three months’ notice (§ 551 (3)). Interest belongs to the tenant and adds to the deposit.
When must it be returned?+
After the tenancy ends and the flat is returned, once no claims remain. The landlord has a reasonable review period; case law accepts up to six months in some cases, e.g. to await an operating-cost statement.
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This article reflects the general legal position at the stated date and is not legal advice. State law, individual circumstances and current case law may differ — when in doubt, consult a tenants' association, lawyer or tax advisor.