Mietkaution in Germany: Amount, Payment, Storage, and Deposit Refund

Mietkaution is the security deposit under a residential lease in Germany. It remains the tenant’s money, but it serves as security for the landlord if there are rent arrears after moving out, damage to the apartment, or unpaid amounts after the annual settlement of utility costs.

For the tenant, the four main things to understand are these: the deposit is capped by law, it can be paid in installments, the landlord must keep the money separate from their own funds, and the refund after moving out does not always happen immediately.

How much can the Kaution be

Under Section 551 of the BGB, the maximum cash deposit is three months’ basic rent. In this context, basic rent usually means the Kaltmiete: the price for the dwelling itself without Nebenkosten, heating, parking, furniture, and other additional charges.

If the contract states an amount higher than three Kaltmieten, that is a reason to check the wording carefully. Sometimes rent and utility charges are mixed together in the contract, which makes the deposit look higher than the legal limit.

The deposit does not depend on the number of tenants. If two people sign the contract, they can divide the costs between themselves, but for the landlord the important point is the total amount of security stated in the contract.

Can you pay the deposit in installments

Yes. If the parties agree on a cash deposit, the tenant has the right to pay it in three equal installments. The first installment is due at the start of the lease, and the next ones are paid together with the rent for the following months.

In practice, many landlords want the full amount immediately. That is common, but it does not cancel the legal right to pay in installments. If the housing market is competitive, the tenant sometimes has to choose between the legally convenient position and the chance to get the apartment. In a disputed situation, it is better to record agreements in writing.

Can the landlord increase the Kaution later

A normal rent increase does not automatically give the landlord the right to demand an additional deposit once the original one has already been agreed. The amount of the Kaution is defined by the contract and capped at three months’ basic rent.

Extra caution is needed if, alongside a cash deposit, the landlord also proposes an additional guarantee. A combination of different securities can become problematic if it effectively exceeds the permitted limit. Exceptions and court practice depend on the specific circumstances, so arrangements like this should be checked before signing.

How the deposit must be stored

The landlord must not mix the Kaution with their personal money. A cash deposit must be kept separately from the landlord’s assets, usually in a bank account with the standard interest rate for this type of deposit. Any interest belongs to the tenant unless the parties choose another permissible form of holding the funds.

This matters not only because of the interest. Separate storage protects the deposit if the landlord runs into debt problems or insolvency.

If you hand over the money in cash, make sure you get a receipt. If you transfer it by bank transfer, specify the purpose of payment, for example Mietkaution and the apartment address. After payment, you can ask for confirmation of how exactly the deposit is being held.

Common ways the deposit is held

Mietkautionskonto or Sparbuch. An account or savings book linked to the deposit. A Sperrvermerk is often used, which means the money cannot be withdrawn freely unless the conditions are met.
Treuhandkonto. A separate trust account opened to hold the tenant’s funds.
Genossenschaftsanteil. In housing cooperatives, share contributions may be used instead of a classic deposit. This is not always the same thing as a Mietkaution, so you need to read the rules on refunds and returns in the cooperative statutes and the contract.
Bankbürgschaft or Mietaval. A bank acts as guarantor for the landlord, and the tenant pays for the service or provides security to the bank.
Mietkautionsversicherung. An insurance or surety guarantee instead of paying the full amount in cash.

Can you use the Kaution instead of the last rent payment

No. The deposit is not meant to let you simply stop paying rent in the last months before moving out. Rent and Kaution are different obligations. If a tenant withholds rent without a valid reason, that can create arrears and give the landlord an additional argument for keeping the deposit.

If financial difficulties arise, it is better to agree on a deferral in writing in advance or ask for social support. For recipients of Bürgergeld, the Jobcenter may under certain conditions provide a Mietkaution as a loan. The requirements depend on the individual case and whether the move is approved.

When the deposit is returned

After the tenant moves out, the landlord must return the deposit if there are no debts and no claims. But the landlord has a reasonable amount of time to inspect the apartment, calculate any possible damage, and wait for the annual Nebenkosten settlement.

Part of the deposit may be withheld temporarily if the utility settlement is still pending. Usually the dispute is not about the basic right to a refund, but about how much the landlord believes needs to remain withheld until the final calculation is complete.

What the Kaution can be used for

The deposit can be used for claims related to the tenancy, for example:

rent arrears;
an additional Nebenkosten payment after the annual settlement;
damage to the apartment beyond normal wear and tear;
poorly done or unfinished repairs, if such an obligation is valid under the contract;
expenses that the landlord can prove with documents.

Normal wear and tear should not be paid out of the deposit. Scuffs from normal living and damage caused by improper use are different things. That is why it is useful to make an Übergabeprotokoll, take photos, note meter readings, and keep a list of the keys handed over when moving in and moving out.

What to do if the deposit is not returned

First ask the landlord for a written settlement: what amount has been withheld, on what basis, and which documents support it. If there is no reply or the withholding looks unjustified, you can contact a Mietverein, a lawyer specializing in Mietrecht, or a Verbraucherzentrale.

For rental disputes, a Rechtsschutzversicherung with housing coverage that was arranged in advance can help, but waiting periods, exclusions, and coverage limits should be checked before a conflict arises. Insurance taken out after the dispute has already started will usually not solve an existing problem.

A guarantor instead of a cash deposit

Bürgschaft is a guarantee from a third party to the landlord. It can replace a cash deposit if the landlord agrees. You usually cannot force the landlord to accept a guarantee instead of money.

The three most common options are:

Private Mietbürgschaft. A private person, for example a relative, guarantees the tenant’s obligations. This is common for students and younger tenants.
Bankbürgschaft or Mietaval. The guarantee is issued by a bank. The bank charges a fee and may require security or check creditworthiness.
Mietkautionsversicherung or Kautionsbürgschaft. The guarantee is issued by an insurer or a specialized surety provider, and the tenant pays a regular premium.

It is important to understand that a guarantee does not mean the damage is finally paid on your behalf. If the guarantor pays the landlord, the guarantor can usually recover that amount from the tenant. Fees and insurance premiums are also not refundable.

Which is better: cash or a Bürgschaft

A cash deposit ties up a large amount of money, but if the tenancy ends normally it is returned together with the interest. A guarantee keeps your money free for moving, furniture, and household items, but the regular fees are not refunded.

A guarantee can be useful if the previous deposit has not yet been returned and the new lease needs to be signed quickly. But before choosing one, check:

whether the landlord accepts that specific type of guarantee;
whether the landlord’s claim is reviewed before payment is made;
how much the service costs per year;
how the contract can be canceled after a normal cash deposit is paid;
whether the application will affect a bank review or SCHUFA.

Commercial terms for a Kautionsbürgschaft change quickly, so it is better to compare current conditions from the specific bank or insurer rather than older examples from articles.

Tenant checklist

Check that the Kaution is calculated from the Kaltmiete, not from the Warmmiete.
Make sure the amount does not exceed three months’ basic rent.
Keep proof of payment or a receipt.
Ask for information about separate storage of the deposit.
Make an Übergabeprotokoll when moving in and moving out.
Do not use the deposit instead of the last rent payment without a written agreement.
If money is withheld, ask for a calculation and supporting documents.

FAQ

Is Kaution mandatory when renting an apartment

The law does not require every tenancy to include a deposit, but in practice most landlords ask for one. If a Kaution is included in the contract, the limits under Section 551 BGB apply.

Can you rent a place without SCHUFA and without a credit history in Germany

Yes, but it is harder. For new arrivals, proof of income, an employment contract, a guarantee, an explanation of the situation, and a well-prepared document package for the landlord often help.

Do you get interest back on the deposit

Yes. If the deposit was held as cash security, the interest usually belongs to the tenant. In practice, the amount may be small and depends on the form in which the deposit is held.

How long do you have to wait for the refund after moving out

There is no single fixed deadline that applies in every case. If there are no debts and no claims, the deposit should be returned after the inspection. If the Nebenkosten settlement is still open or there is a dispute about damage, the landlord can keep a justified part of it for longer.