What is the maximum allowed security deposit in Germany?

What the Law Says

German law strictly limits how much a landlord can ask for as security — and how that money must be handled — to protect tenants from unfair financial burdens.

Under § 551 of the German Civil Code (BGB), any security deposit paid in cash (or its equivalent, like a bank guarantee) must not exceed three times the monthly base rent. Importantly, this calculation excludes operating costs (Nebenkosten) — even if those costs are billed as a flat rate or advance payment. This ensures tenants aren’t overcharged for routine building expenses.

If the deposit is paid in cash, the tenant has the legal right to pay it in three equal monthly installments. The first installment is due at the start of the tenancy; the remaining two are due with the next two rent payments.

The landlord must invest the deposit separately from their own assets — typically in a savings account with a three-month notice period — and at the standard interest rate offered for such accounts. Any interest earned belongs entirely to the tenant and must be added to the deposit balance. Agreements that try to waive these protections (e.g., waiving interest or allowing commingling of funds) are automatically invalid.

Statutory Text

Hat der Mieter dem Vermieter für die Erfüllung seiner Pflichten Sicherheit zu leisten, so darf diese vorbehaltlich des Absatzes 3 Satz 4 höchstens das Dreifache der auf einen Monat entfallenden Miete ohne die als Pauschale oder als Vorauszahlung ausgewiesenen Betriebskosten betragen.

— BGB § 551(1) — German Civil Code

What Courts Have Said

German courts enforce the strict limits and safeguards around security deposits — especially when landlords attempt to bypass them through alternative forms like bank guarantees.

What to Do

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