Security deposit for furnished apartments

Apartment studio from City-Wohnen Hamburg

It is standard to pay a security deposit for furnished apartments as well.

 

What is a rent or security deposit?

 

A deposit is a monetary security for the lessor and the amount usually depends on the length of the rental. If an apartment has particularly high-quality furnishings and fittings, the deposit can be somewhat higher. The deposit is held either by the lessor or in City-Wohnen’s escrow account. It is returned in full if everything was in order at the move-out apartment inspection and any outstanding bills have been paid. The rent deposit may not be used to cover the last month's rent.

Who gets the rent and security deposit?

The first month's rent and the rent deposit must be paid before moving in and the key handover. If the rental period does not start on the first day of the month, this first month’s rent will be calculated on a pro-rata basis. All the bank details for transferring the rent and rent deposit are recorded in your lease agreement. These can be transferred directly to the lessor or to City-Wohnen Hamburg’s escrow account, depending on the lessor’s wishes.

Return of the security deposit

The deposit must be returned within a reasonable time after the final apartment inspection. German law (BGB) does not state a fixed deadline for this repayment but rather "a reasonable period." Naturally, repayment as soon as possible is very welcome. The property condition reports are decisive for deposit repayments. These documents are legally binding and can be used as evidence in court disputes.

Has everything been clarified?Then the deposit must be repaid promptly.

The lessor is obliged to release the deposit immediately if no damages were found during the apartment inspection, all invoices to be paid out of the deposit have been received, and there are no unsettled claims.

Can City-Wohnen decide about returning a deposit?

No. If there is a dispute about the return of the deposit, City-Wohnen cannot make the decision.

What about damages found after the apartment inspection?

If the property condition report states that the apartment was returned without damages, the lessor bears the risk of undetected damages. Damages discovered later can be claimed in the following cases:

  • The lessee concealed damages with the intent to deceive.
  • These were the types of damages that could not be seen during the property condition inspection. In this case, the lessor must prove why the damages were not recognizable.

What happens if the settlement of claims is unresolved?

The deposit will not be released until the claims settlement is clarified and/or all invoices have been received. The lessor must now assert her/his claims within the "reasonable period." Since there is no fixed deadline here, individual cases can sometimes take up to 6 months.
If the lessor takes more time to assert their claims, the claims of the lessor can expire and the deposit must be released. If the lessor does not return the deposit within a reasonable time, the lessee must become active since the lessee’s claims expire after three years.

If there is disagreement about the damage settlement, the lessor may draw on the deposit after the end of the rental contract. The lessee can then sue for repayment of the deposit. The lessor must justify and make a case for her/his demands in court.

Reimburse a part of the deposit

If the amount of the costs (final cleaning, repair of damages) can be estimated, the parties can agree to a partial refund. If more than three months have elapsed since the end of the rental period, the lessee may demand a partial refund from the lessor (in writing).

To whom is the deposit returned?

The deposit is released to the person who paid the deposit. In general to the same account.

The difference between damages and normal wear and tear

Only damages caused by the lessee can be deducted from the deposit. This is not the case for normal wear and tear as this is already covered by the rent. If regular cosmetic repairs are agreed in the rental agreement, the lessor may demand that these repairs be carried out or deduct the amount from the rental deposit. These kinds of agreements are very unusual for temporary furnished apartments The lessee is liable in the case of willfulness and gross negligence. For temporary furnished rentals, the rental period is taken into account. If an apartment is rented for only three months, the signs of wear and tear should be minimal.


Examples of normal wear and tear

  • slightly soiled or discolored wallpaper
  • slight signs of usage on the walls
  • normal signs of use on carpets
  • small scratches on parquet flooring
  • normal signs of use in the bathrooms
  • normal signs of use on the furniture

 

Examples of damages

  • The smell of smoke in a non-smoking apartment (as specified in the lease)
  • several broken tiles
  • burns in the carpet due to cigarettes
  • torn wallpaper
  • large scratches on parquet flooring or furniture

What if the deposit is in City-Wohnen’s escrow account?

City-Wohnen offers an escrow account for rentals. Using this service means lessors do not have to open a separate deposit account. This does not mean, however, that City-Wohnen has a claim to the deposit.

In order to release a deposit to the lessee, the lessor must confirm to City-Wohnen in writing that a refund is permitted. If there are costs to be deducted from the deposit, the bills must be presented to the lessee and City-Wohnen (e-mail and scans are sufficient for City-Wohnen).

Access to the deposit during the rental period

  • If a lessee does not pay rent, she/he is in default of payment. The lessor may satisfy her/his claim from the deposit. In this case, the renter is obliged to replenish the deposit up to the agreed amount.
  • If the lessee does not pay rent due to disputed claims, the lessor may not use the deposit. This is, for example, the case with rent reductions with which the lessor does not agree.
  • The lessee has no access to the deposit during the duration of the rental.

Is it allowed for the lessee to withhold rent during the last months?

A clear no! It is not allowed for the lessee to withhold rent during the last months of the contract by claiming that the deposit covers the rent. In so doing, the lessee is in default of payment.

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