Getting your deposit back after moving out

In short: what is the rental deposit?

• The deposit is security provided by the tenant. It covers any claims the landlord has against the tenant.
• It is usually paid into a deposit account or provided as a bank guarantee.
• The deposit may not exceed three months' net cold rent (rent excluding service charges).

Reasons for withholding the deposit

Many tenants wonder why their landlord does not return the deposit straight after they move out. The landlord may withhold all or part of the deposit for the following reasons:

• Service charge back payments: The annual service charge statement is the most common reason. It can still produce a back payment for the tenant after the move-out. For this, the landlord may hold back at least part of the deposit after the tenancy ends.
• Rent arrears: The landlord may offset rent arrears that built up during the tenancy against the deposit.
• Damage to the flat: The tenant damaged the flat and did not return it in the condition it was let in.
• Late return of the flat: Under § 546a BGB the landlord may claim compensation for a late handover.
• Cosmetic repairs not done: Most tenancy agreements state that the tenant must carry out cosmetic repairs. If these were not done as agreed, the landlord may claim compensation.

Tip: before you carry out cosmetic repairs, check whether the clause in your tenancy agreement is valid. If the cosmetic repairs clause is invalid, you do not have to renovate. CONNY can check your cosmetic repairs clause and have its contract lawyers fend it off.

How long may the deposit be withheld?

The landlord has a set period to establish whether any claims against you remain. This period differs from case to case. If claims remain, the landlord may withhold part or all of the deposit, depending on the case. Once no claims remain, there is no longer any reason to hold security. The landlord must return the deposit to you.

The most common reason for a later refund of the deposit, or part of it, is service charges. The landlord can only determine a possible back payment through the annual service charge statement. Under § 556 (3) BGB the landlord has until the end of the twelfth month after the end of the billing period to send you the statement.

Once the landlord sends the service charge statement after you have moved out, the rest of the withheld deposit falls due. If the statement shows you owe a back payment, the landlord may deduct that amount from the withheld deposit.

Moving out at the start of the service charge billing period? So that you do not wait too long for the statement, the landlord must prepare it within a reasonable period here too, depending on the individual case. What counts is mainly when the landlord receives the data needed for the statement.

So it can be lawful for the full deposit to come back as late as six months after you move out.

Can you "live off" the deposit?

The deposit is security the tenant provides to cover any claims the landlord has against the tenant. Many tenants therefore believe they can "live off" the deposit after giving notice and stop paying rent. This is not allowed: you are only entitled to a refund of the deposit after the tenancy agreement has ended.

Your former landlord is not returning your deposit? CONNY helps you reclaim your money.

Conditions and exceptions: when withholding for service charges is allowed

The landlord may hold back the deposit for service charges only under three conditions. First: the statement for the last rental year is still outstanding. Second: a back payment is specifically expected, for example because you had to pay extra in previous years or your advance payments were well below the actual costs. Third: the landlord keeps only a reasonable part, not the whole deposit. This is what the Federal Court of Justice (BGH) ruled (judgment of 18 January 2006, VIII ZR 71/05).

If you always received a credit in previous years, there is no basis for withholding. The landlord must then pay out the full deposit after the usual review period. If the last statement has already been issued and paid, no reason for security remains. A separate limit applies to damage and unfinished cosmetic repairs: the landlord's claims for changes to or deterioration of the flat become time-barred six months after the flat is returned (§ 548 (1) BGB). If the landlord does not raise such claims within that time, they can no longer keep the deposit for them.

An example with figures: your deposit is €1,800. You move out on 31 March; the billing period runs to 31 December. Last year you paid €240 extra. The landlord may then hold back around €300 until the statement is issued. The remaining €1,500 must be paid out after the review period, usually by the end of September. The statement for the year you moved out must reach you by 31 December of the following year. If it shows a back payment of €200, you get €100 back plus interest. If it shows a credit, you get the €300 and the credit.

Reclaiming your deposit: the next step

Demand the deposit in writing as soon as the review period has passed. State the amount, your bank details and a payment deadline of 14 days. Add that no claims remain or that the last statement has already been issued. If the landlord does not pay by the deadline, they are in default (§ 286 BGB) and owe default interest of five percentage points above the base rate (§ 288 (1) BGB). If payment still does not arrive, a tenants' association or a specialist tenancy lawyer can help; the next step is a court payment order (Mahnbescheid) or a claim at the local court (Amtsgericht). Your claim only becomes time-barred after three years, counted from the end of the year in which it fell due (§ 195, § 199 BGB).

Just moved into a new flat? Then take the opportunity to check whether your new rent complies with the rent control rules (Mietpreisbremse, § 556d BGB). The free rent check shows you in a few minutes whether you are paying too much.

Frequently asked questions