Deposit Amount and Installments: What Section 551 BGB Allows

The size of a rental deposit in Germany isn't just up to the landlord. Section 551 of the German Civil Code (BGB) sets a fixed cap and gives tenants a right that many don't use at move-in: paying in installments.

The statutory cap

Under Section 551(1) BGB, the deposit can be no more than three times the net Kaltmiete, meaning rent excluding any Nebenkosten flat rate or advance payment. A higher deposit agreed in the rental contract is invalid for the excess amount, regardless of whether the tenant agreed to it. If too much was paid by mistake, the excess can be reclaimed without invalidating the deposit agreement as a whole.

The right to pay in three installments

Under Section 551(2) BGB, the tenant doesn't have to pay the deposit in full when signing the contract. They have the right to pay it in three equal monthly installments. The first is due at the start of the tenancy, and the following two are due together with the next rent payments. A landlord who demands the full deposit in one lump sum before move-in is asking for more than the law provides, even though this practice is common. This right cannot be validly excluded by contract.

What to do about an excessive deposit demand

If the rental contract sets a deposit above the statutory maximum, start by pointing to Section 551(1) BGB in writing and requesting a reduction to three times the net Kaltmiete. If too much has already been paid, the excess can be reclaimed independently of the ongoing tenancy, since there's no legal basis for that portion of the payment.

Deposit and Nebenkosten advance payments

Important for the calculation: only the net Kaltmiete counts. An agreed Nebenkosten flat rate or advance payment must not be included in the deposit's calculation base, even if the rental contract shows the total rent as a single figure.

Conclusion

A rental deposit can be no more than three times the net Kaltmiete and can be paid in three equal monthly installments, a right tenants have regardless of how the contract is worded. Anyone asked to pay more, or all at once, should cite Section 551 BGB.

Frequently Asked Questions

What's the maximum a deposit can be?

No more than three times the monthly net Kaltmiete, excluding Nebenkosten, under Section 551(1) BGB.

Do I have to pay the deposit all at once?

No. Under Section 551(2) BGB, tenants have the right to pay the deposit in three equal monthly installments.

What if the contract states a higher deposit?

The excess portion is invalid and can be reclaimed, regardless of what the contract states.

Does the Nebenkosten advance payment count toward the calculation base?

No. Only the net Kaltmiete, excluding Nebenkosten, counts.

Anyone apartment hunting and wanting to sort out the deposit question in advance can browse current listings on Waitly. An alternative to a classic cash deposit is described in Deposit Guarantee Bond Instead of a Cash Deposit. How deposit interest is calculated is explained in Deposit Interest: Who Is Entitled to It?. For the deductions themselves, see What Landlords Can Deduct From Your Deposit in Germany.