Anyone whose deposit has not been returned can demand its repayment in writing, setting a deadline, once a reasonable period for review has elapsed, and if necessary sue before the local court (Amtsgericht). The landlord may only withhold the rental security (Mietsicherheit) for legitimate, specifically substantiated claims arising from the tenancy. The remaining amount, including any accrued interest, must be paid out.
The central provision is **Section 551 of the German Civil Code (BGB)**. It limits the deposit to a maximum of three months' net cold rent (Nettokaltmiete), obliges the landlord to invest it separately, and stipulates that the interest earned belongs to the tenant. The right to repayment itself arises from the security agreement (Sicherungsabrede) in the tenancy agreement: once the purpose of the security no longer applies, the deposit must be returned.
When must the landlord repay the deposit?
There is no fixed statutory deadline for repayment. According to case law of the Federal Court of Justice (Bundesgerichtshof), the landlord is entitled to a reasonable period after the end of the tenancy and the return of the flat to check whether any claims remain. In practice, courts generally regard three to six months as reasonable. The simpler the settlement process, the shorter this period will be.
This review period is not a blank cheque. If there are no outstanding claims — for example, because the flat was returned free of defects according to the handover protocol (Übergabeprotokoll) and all utility costs have been settled — the claim may become due considerably earlier.
What may the landlord withhold from the deposit?
The deposit secures all claims arising from the tenancy. Typical legitimate deductions include:
- outstanding rent payments or additional payments arising from utility cost statements (Betriebskostenabrechnungen),
- compensation for damage exceeding normal wear and tear,
- costs for validly agreed but uncompleted cosmetic repairs (Schönheitsreparaturen).
The landlord may not deduct costs for ordinary wear and tear. Under Section 538 BGB, the tenant is not liable for changes or deterioration resulting from contractual use. Minor wear marks in the carpet, faded wallpaper, or a reasonable number of wall-plug holes are therefore not grounds for a deduction. Many renovation clauses in older tenancy agreements are also invalid, for instance where they impose rigid deadlines or where the flat was handed over unrenovated.
Claims for damages due to changes or deterioration of the rented property are subject to a short limitation period of six months from the date of return, pursuant to Section 548(1) BGB. However, according to more recent case law of the Federal Court of Justice, the landlord may, under certain circumstances, still set off such claims against the claim for repayment of the deposit even after this period has expired, by virtue of Section 215 BGB. Tenants should therefore not rely on the mere passage of time.
Partial withholding pending the utility cost statement
If the utility cost statement (Betriebskostenabrechnung) is still outstanding, the landlord may, according to case law of the Federal Court of Justice, withhold a reasonable portion of the deposit if an additional payment is to be expected. The landlord must provide the tenant with the statement no later than twelve months after the end of the billing period, pursuant to Section 556(3) BGB.
An example: the deposit amounts to €2,400 (three months' net cold rent at €800 each), and the interest amounts to €30. In the previous year, the additional utility payment amounted to €150. Withholding around €200 would be justifiable. The landlord must pay out the remaining €2,230 once the review period has expired. Withholding the entire deposit for months merely because a statement is outstanding is, by contrast, not justified.
Step by step: How to reclaim your deposit
Start with a written demand letter (Aufforderungsschreiben). State the amount of the deposit, demand payment including interest to a specified account, and set a specific deadline of around two weeks. Enclose a copy of the handover protocol, if available. Send the letter in a verifiable manner, for example by registered post with proof of delivery (Einwurf-Einschreiben).
If the landlord lets the deadline pass, they fall into default (Verzug) regarding the payment due through this reminder (Section 286 BGB). From that point on, you can demand default interest of five percentage points above the base rate (Section 288(1) BGB) and also claim the costs of a lawyer as damages caused by the default.
If payment is still not made, two routes are open: the court order for payment procedure (gerichtliches Mahnverfahren) under Sections 688 et seq. of the Code of Civil Procedure (ZPO), or a claim for payment. For disputes concerning residential tenancies, the local court (Amtsgericht) in whose district the flat is located has jurisdiction regardless of the amount in dispute (Section 23 No. 2a Courts Constitution Act (GVG), Section 29a ZPO). The court order procedure is quick and inexpensive but is only suitable if no objection is expected.
Special case: The flat has been sold
If the flat was sold during the tenancy, the purchaser assumes the rights and obligations arising from the security deposit pursuant to Section 566a BGB. The purchaser therefore owes repayment even if the previous landlord never handed over the deposit to them. If the tenant is unable to obtain the deposit from the purchaser, the original landlord remains obliged to repay it.
Common mistakes tenants should avoid
A common misconception is the so-called 'living off the deposit' (Abwohnen der Kaution), where the last months' rent is simply no longer paid. This is not permitted, because the deposit is specifically intended to secure the landlord until the tenancy has been fully wound up. This risks default in payment and, in the worst case, termination of the tenancy.
Handing over the flat without a protocol is equally risky. Without written documentation including photographs, it is later almost impossible to prove that damage already existed at move-in or was not present at move-out. Therefore, insist on a jointly signed handover protocol.