Term

The deposit or guarantee amount is a liability amount demanded by contractual partners to ensure the adherence to a contract, in particular for a claim that may arise at a later date. In real estate law, the deposit serves to ensure the payment of rental fees or damages to the rental object. Usually, it is three to six times the gross monthly rent. If this is given to the landlord as a sum of money, then the landlord must invest this for profit in a savings account or in another similar form of investment (equally good interest and equally high security).

After the end of the tenancy agreement, the landlord must return the deposit to the tenant, including the interest attained from its investment, as long as it is not used to repay legitimate claims of the landlord from the tenancy agreement.

If insolvency proceedings are initiated on the landlord’s assets, the deposit may not be used for any claims that are unrelated to the tenancy agreement.