Rental deposit account – how does it work??

The rental deposit account holds the deposit that is due at the start of a lease for the duration of the lease. During this time the money is available neither for the tenant nor for the landlord. To find out who to set up such a deposit account and what to look out for, click here.

The rental deposit is not required by law

Credit saved by rent deposit account

There is no law mandating the payment of a rental deposit, but there is a law mandating its amount. It is limited by law to a maximum of 3 months' cold rent. If a security deposit is agreed upon in the lease agreement – as is usually the case – it must be paid in full to the landlord at the start of the tenancy. Alternatively, it is also possible to pay in installments, where the installments are transferred one month's rent at a time.

Tenants should not default here! Since the change in tenancy law from 01.05.In 2013, the landlord has the right to terminate without notice if the rental deposit account is two months' rent in arrears.

Good to know: if a commercial property is rented, the amount of the deposit is not limited to 3 months' cold rent. In this case, the rental deposit can be freely set.

This is the special feature of the rental deposit account

The money that is in the security deposit account cannot be touched by either the tenant or the landlord during the tenancy. After the tenant moves out, the landlord has 3 to 6 months to determine if the tenant caused damage to the property that they have not previously paid for. Even if the tenant owes utilities, the landlord can withhold an amount equal to their legitimate claims.

The rental deposit account is non-cancelable – the money is safe there until the lease ends. In addition, this particular type of account is secured against bankruptcy claims. This means that if the landlord files for insolvency during the tenancy, his creditors will not have access to the security deposit account.

The credit balance still belongs to the tenant, however, the landlord has the right to access it in the event of outstanding amounts after termination of the lease. If the landlord no longer has any claims against the tenant, he issues a release for the rental deposit, which the tenant then receives back including accumulated interest.

This is how the rent deposit account is opened

In principle, the opening of a rent deposit account is the responsibility of the landlord. The tenant can transfer the money or give him cash. In both cases, it is advisable to have a backup: keep the wire transfer receipt carefully and get a receipt in case of cash payment. The landlord then opens a security deposit account with the money, with the tenant's name and address included. This account must be completely separate from the landlord's assets and must not be touched.

In addition, interest must be paid on the balance. Often this is done on a rental deposit savings account, but sometimes it is done through a rental deposit account. Especially in times of low interest rates, the latter can be more interesting: the tenant receives – if no claims arise through the landlord – the interest-bearing deposit back. These days, this can yield more in a securities account than through the low interest rates of a savings account.

Tenants can also open a security deposit account

The landlord must put down the rental deposit – but in what way that happens is entirely up to them. For example, he can also decree in the lease agreement that the tenant himself opens a corresponding account. If this is the case in your case, proceed as follows as a tenant:

This way, you'll always be on top of the account. However, even if you have opened the account yourself, the landlord must first release it before you can dispose of your balance after the tenancy ends.

  • Contact the landlord's house bank or an online bank
  • Open a rental deposit savings account
  • Rent deposit savings account with balance pledged to landlord

What does a rent deposit account cost?

The fees that apply to a rental deposit account depend on the financial institution you choose. There are several banks that do not charge monthly fees, while others charge a one-time fee to set up the account. Still other banks make it a prerequisite for a free rental deposit account that the person who wants to open it is already a customer. The easiest way is to contact your local bank first. If you do not like what is on offer there, you can make a comparison of different providers.

The cost of the rental deposit account is always borne by the landlord. A clause in the lease that charges the tenant for the costs is not legal and therefore invalid.

Conclusion: the rental deposit account offers security for tenant and landlord

The credit balance on a security deposit account is inviolable for both the tenant and the landlord. Interest is paid on it over the period of the tenancy. Only when the landlord has determined that he no longer has any claims against the tenant after the tenancy has ended, does he release the money. The tenant receives the full amount, including interest, in these circumstances. Rental deposit account fees are always borne by the landlord. However, there are banks where the account is free of charge, often for existing customers.