The Deposit (Kaution): How Much, and How to Get It Back

For most newcomers the Kaution (security deposit) is the biggest single payment of the whole move, and the rules around it are some of the most tenant-friendly in German law. Knowing the legal limits before you sign stops landlords from overcharging and makes getting your money back far smoother. Here is what the law actually says and how to use it.

How much you can be asked for

Under German law (Paragraph 551 of the BGB, the Civil Code), the deposit is capped at three months' Kaltmiete (cold rent, excluding running costs). On a 50 m² Munich flat at around €1,150 cold, that is roughly €3,450 — a serious sum to have ready. Any clause demanding more than three cold rents is simply invalid, so push back if a landlord asks for four. The deposit is never calculated on the warm rent.

You can pay in three instalments

You do not have to hand over the whole deposit at once. The law lets you split it into three equal monthly instalments: the first is due when the tenancy starts, the next two with the following months' rent. This right cannot be removed by the contract, even if the landlord prefers a lump sum. For newcomers juggling moving costs, spreading the Kaution over three months can ease real cash-flow pressure in the first weeks.

Where your money must sit

Your deposit is not the landlord's to spend. They must hold it separately from their own assets in an account that earns interest at the usual savings rate, and that interest belongs to you. This separation also protects you if the landlord runs into financial trouble. You are entitled to ask how and where your deposit is held, and a reputable Munich landlord will tell you without fuss.

Alternatives to tying up cash

If three cold rents up front is too much, ask about a Mietkautionsbürgschaft (a deposit guarantee or deposit insurance). Instead of locking away cash, you pay an insurer or bank an annual fee — commonly around 5% of the deposit sum — and they guarantee the amount to the landlord. It costs more over a long tenancy but keeps your savings liquid for the move. A landlord can decline, but many accept it.

Getting your deposit back

When you move out, the landlord may keep the deposit for a reasonable period to check for damage and settle accounts. There is no fixed statutory deadline, but case law generally treats up to three to six months as acceptable, and the landlord may hold back a portion until the final annual Nebenkostenabrechnung (service-charge reconciliation) is done. Normal wear and tear is not deductible — only genuine damage beyond ordinary use.

Protect yourself from day one

Make the return easy before you ever move in. At handover, complete a written Übergabeprotokoll (handover protocol) recording the flat's condition, take dated photos of any existing marks, and keep them safe. Pay the deposit only after the contract is signed, and always by traceable bank transfer with a clear reference — never in cash to a stranger at a viewing. These few steps prevent most disputes later.

Common deposit disputes — and how to win them

Most deposit fights are about what counts as damage. Normal wear and tear — faded paint, lightly worn carpet, small nail holes from pictures — is the landlord's responsibility, not yours, and cannot be deducted. The landlord must itemise any genuine deductions rather than keep a round sum. If no statement and refund arrive within a reasonable period — commonly treated as three to six months — send a written request setting a clear deadline, for example 14 days, and keep a copy. Your move-in Übergabeprotokoll (handover protocol) and dated photos are your strongest evidence, which is exactly why they are worth completing carefully on day one. If a landlord stalls or over-deducts, a tenants' association such as the Mieterverein München will review your case for a modest annual membership fee, and a firm, documented letter often resolves things without going further.

The Kaution is a large upfront cost, but it is also one of the areas where German law clearly sits on the tenant's side: capped at three cold rents, payable in instalments, held safely, and refundable minus only real damage. Document the flat's condition at move-in, pay only after signing, and you can treat your deposit as money you will see again — not a fee you have lost.