Worth knowing about the rental deposit – Forms of bail

 

Almost everyone knows the situation: Before moving into a new home, the majority of landlords pay a deposit to secure their own interests. For tenants, this payment is often an additional financial burden in an already costly move.

Purpose of the deposit payment

The deposit will be used to compensate for any damages or open payments that may arise during a rental relationship: loss of rental income, back-office payments or damages caused by the tenant, as well as cosmetic repairs that the renter does not carry out himself. The maximum sum of the deposit is limited to three monthly rentals according to § 551 BGB. It is to be paid by the renter if this is explicitly agreed in the rental agreement.

Forms of bail

The type of rental deposit can be freely agreed by the contracting parties. It is important that tenants and landlords agree on an investment opportunity. Generally, the following forms of the rental deposit are possible:

  • Cash deposit as a cash payment or transfer to the lessor’s account, which must separate the payment from his own assets and create a separate deposit account, savings account or money market account in order to protect the tenant against possible bankruptcy. The barking is problematic in disputes: The landlord has to list the costs incurred, however, is the complaining of the deposit for unauthorized claims for the tenant more complicated than, for example, a guarantee.
  • Bank guarantee or private rental guarantee, usually by the tenant’s parents. This has the advantage over other forms that the tenant does not have to raise the cash in cash, but the bank takes over the guarantee for a monthly or annual fee. In case of damage, the insurance of the bank checks the claims of the landlord for their legality. The disadvantage, however, is the classification as a credit, which many banks undertake in a guarantee, which reduces the credit line.
  • Since the plant can be freely agreed since 2001, the form of a securities deposit is basically possible. The option of depositing a fund as a rental deposit, for example, might make sense because of the yield option. At the same time, however, this also entails the risk of loss of value, for which the tenant would then have to pay in addition if necessary.
  • With the Mietkaftsversicherung (or simply called bail bond insurance), the tenant pays no deposit to the landlord, but gives him a kind of guarantee of the insurance. If the landlord has legitimate claims against the tenant during the tenancy, the insurance would pay for the costs. The advantage for the tenant is that he does not have to pay the deposit at the beginning of the tenancy. Disadvantages, however, are the regular mixing costs, which can exceed the originally imposed rent deposit, especially for long-term tenancy.

Settlement of the deposit payment

The payment must be made in a maximum of three installments (Attention, in the case of a two-month delay, the landlord may terminate the tenancy agreement in accordance with §569 BGB without notice!). The landlord must refund the sum including interest and compound interest after termination of the tenancy, whereby he is entitled to a test and settlement period of up to six months and he may withhold a portion of the payment up to twelve months as a reserve for a pending utility bill.

To avoid annoyance, the parties should agree in advance on the handover of the apartment. So that no disputes arise later, a transfer protocol is recommended, in which differences may be recorded in writing. The aim is to secure the evidence of the transfer state, because the tenant is liable only for the damage, which are noted in the log – for subsequent complaints, the landlord can not retain part of the deposit. A “defect” is damage that goes beyond normal wear and tear such as an expired carpet or scratches in the floor.

Beware of the handover protocol is already required when moving in: The tenant should only sign if the freedom from defects is really given. All other unregistered damages are recognized by the future renter as his own and, if necessary, are liable for the bail.

Conclusion

All forms of deposit payments offer advantages and disadvantages. The bank guarantee and the rental deposit insurance initially relieves the tenant, but entails annual charges, whereas interest can be earned with a savings account. However, the current interest rates are low, even with usually well-interest-bearing money market accounts, so it must be weighed whether it is worth the Vorstrecken the total amount of the deposit.

Optionally, a custody account may serve as a potential alternative for rent deposit payment. Here you should be aware of the possible risks and consequential costs in case of price losses.