After a long search, she finally found: an affordable home. Once the necessary documents have been provided, such as proof of income and creditworthiness, the way is paved into your own four walls. Or not? That would be too easy, because on the surcharge follows. How much can this amount be? What deadlines must be met? And what options are there to finance a rental deposit? This is answered by our guide article.
Formal rights and obligations for a rental deposit
Why is a security deposit payable?
A housing security is payable by the renter to secure the landlord in case of damage . The deposit of the rent is regulated in the BGB under $551 . The requirement of a security deposit is obligatory as soon as it is fixed in writing in the lease. If this is not the case, the payment of the rental deposit can be denied without a contractual obligation.
The deposit is used for the following purposes:
- Rental arrears If the tenant could not afford the payment for the rent, the landlord may use the rent deposit to settle the missing rent.
- Residual costs If there are arrears in the additional costs, the landlord may use the rent deposit
- Foreseeable additional payments of the additional costs The landlord uses the rent deposit, if additional costs are to be expected
- Damage in the apartment If property damage has arisen in the apartment, the landlord is permitted to use the rental deposit to settle the damage
To what deadlines and obligations are tenants and landlords bound?
According to the Civil Code fixed rights and obligations regarding the amount, duration and investment form of the security deposit . The rent deposit may not exceed three months rent. If the landlord decides to pay in installments, the deposit must be paid within three months. The money originating from the rental deposit is to be paid by the landlord to a separate deposit account and thus separately from other accounts and assets to create. The resulting interest and the deposit amount belong to the tenant. This may choose an investment form, whereby the landlord is obliged to accept a savings account. Other forms of investment require the consent of the landlord. If the landlord makes contractual obligations that penalize the tenant with regard to the rental deposit, this is unlawful.
When will the rent deposit be repaid?
The deposit for the apartment will be paid to the tenant as soon as the tenancy ends . The landlord must then release the rent security. This is given as soon as the tenant has fulfilled the obligations of the lease. If open rental payments, damage in the rental property or missing renovations were found, the host may make a partial payment or withhold the entire deposit.
Interest: How is a rent deposit offset?
The security deposit is usually deposited in a savings account. Regardless of whether the savings account is in the name of the renter or lessor, the interest is transferred to the renter. The landlord is not allowed to keep the money without interest.
Rules for the interest rate:
- interest rate
The deposit amount will earn interest as a savings deposit at a common interest rate. The interest rate is currently between 0.01 percent to 0.2 percent. The minimum return is required by law.
- investment accounts
How high the interest rate depends on the investment form. The tenant can avoid the taxation of the interest by submitting an exemption order to the respective bank. If the deposit is to be repaid, the landlord will be paid the interest.
Maturity: Is it possible for a rental deposit to become time-barred?
A rental deposit becomes time-barred after three years. The clock for the limitation period is ticking only when the tenancy has been completed for six months . This means that the tenant after the termination of the lease has to wait six months before he can assert his deposit claims. In addition, it is possible to ask the landlord for payment at the end of the year, in which the tenant is entitled to it. If a tenancy ended in September 2016, the landlord is obliged to pay the deposit until March 2017. If the landlord has not fulfilled his obligation, the limitation period begins at the end of 2017. From this point on, the renter has three years to claim the deposit before it becomes time-barred.
Payment procedure of the rental deposit
The rental deposit over a cash deposit
Ideally, the tenant is financially able to pay the housing security upon conclusion of the contract or the move into the apartment. The legal regulation allows the renter to pay the cash deposit in installments. The deadline is three months.
Important Advantage: There are no interest accrued, such as a guarantee or the taking out of a loan.
Pay the rent deposit in installments
Legislators have firmly anchored installment payments in tenancy law.
Maturity : If the cash deposit is made in installments, the first pro rata payment is due at the latest when the rental begins . The remaining installments are paid at the time of payment of the rent. The due date of the installment depends on the start of the lease, which is fixed in the rental contract.
Important Advantage: The legal basis of installment payments provides security. If the tenant is not liquid enough to raise three months’ rent at the same time, he can pay by installment the rent deposit for an apartment.
Deposit the rental deposit on a deposit savings book
The deposit savings book is a special form of the savings account. The peculiarity lies in the fact that the tenant assigns a Pledge Declaration to the landlord. This gives the landlord his rental security. The Miethausutionssparbuch is usually led by the tenant and can be claimed in case of damage by the landlord.
Formal process: The tenant creates a passbook for the duration of the tenancy. This is pledged to the landlord. It is important to note that a blocking notice in favor of the lessee is recorded at the responsible credit institution. Thus, the unauthorized access of the landlord is avoided.
Important Advantage: The rental deposit savings book is an uncomplicated way to deposit the deposit. The interest on a rental deposit savings book is usually higher than the interest charged on a normal savings account. That’s an advantage for the tenant.
Tips for successfully financing the rental deposit
The decision for a form of rent deposit financing should be taken deliberately. Some forms of investment offer tenants the opportunity to make a profit from the rental deposit.
Financing the rental deposit via a rental deposit guarantee
The rental deposit guarantee is suitable for financing the rental deposit. Similar to the formal provisions of an insurance policy, the renter pays an annual amount . If a damage has to be paid or a rent arrears settled, the guarantor takes over the financial expenditure. Guarantees are possible with insurance companies, banks or private creditors.
The bank guarantee is known under the terms Bankaval or Mietaval . If the tenant decides on a bank guarantee, the bank assumes the role of guarantor. The interest on a guarantee is comparatively low.
Important Advantage: The tenant is financially relieved. Depending on the form of guarantee, notice of termination may be given at any time. The landlord saves a lot of bureaucracy.
Pledged securities to pay the rent deposit
In order to ensure the security for the landlord, securities may be pledged. Who pledged shares, for example, this according to BGB $ 1293 to the landlord. The landlord holds the securities, but does not make it compulsory to receive the value . The landlord is therefore required to keep the securities or bearer securities separately from the remaining financial position. When the securities are used, they are sold to turn the value into cash.
Important Advantage: This form of financing is attractive because the return is usually 3-4 percent.
Apply the security deposit with a security deposit
Disposition credit: A disposition credit offers the possibility to raise the security deposit quickly. The current account can be overdrawn up to a specified amount. The disadvantage is that the interest rates are comparatively high. It has to be weighed whether a loan with a bank or a mini loan will bring more financial benefits. The disposition credit is usually made available if there is no negative Schufa entry.
Credit at the bank: The bank loan is the best of the funding bottlenecks. The borrower receives a loan from the bank and pays back with a fixed term and a fixed interest rate . The bank awards the loan if there is a regular income. The income must also be sufficient. Therefore, this form of financing via a security deposit loan, if it is expected that the borrower’s liquidity in the near future. The high interest rates result in a significantly higher repayment amount.
Financing options for students and trainees
How can a student or apprentice finance the deposit?
In order to raise the rent deposit, special financing models are recommended for students and trainees.
Student Loan: Anyone who has to finance a degree program can use a student loan to cover the cost of living. The student loan allows students to take out a loan at a low interest rate. A student loan requires no special security and no income. The repayment of the loan for the rental deposit takes place with the first, permanent job after graduation. Students should fall back on a study loan if they have to cover the rental deposit further costs. A disadvantage is that the entire loan must be repaid. This makes it difficult to get started because the full salary is not available for some time.
Fund System : The Federal Education Funding Act, Fund System for short, allows students to finance their monthly expenses. In addition to the usual Fund System model, the non-parent Fund System allows to receive a grant without crediting the parental assets. The student loan is a popular option among students to spend the rental deposit pro rata. The advantage lies in the state subsidy, which covers 50 percent of the subsidy . Equivalent to the student loan, the student loan must be paid at the start of work. The amount of the student loan is calculated from the income of the student and that of the parents. If you are not within these limits, you can not finance the rent deposit proportionately through the Fund System.