What is a rental deposit guarantee?
The rental deposit guarantee is – as can already be deduced from the word – a guarantee for the rental deposit. The rental deposit guarantee offers an alternative to the usual deposit for a rental property in the form of cash or a savings account. The tenant enters into a contract with a provider who works with an insurance company or bank, or directly with a bank or an insurer – there are various options here – and makes a monthly or annual contribution to his contractual partner. For this, the insurance company or bank offers the tenant a deposit guarantee, which the tenant can in turn present to his landlord as a one-off amount instead of the conventional deposit amount. If the tenant does not meet his obligations under the rental agreement and, for example, does not pay his rent or leaves damage when he moves out, the landlord can claim the rental deposit guarantee and, after checking the damage report, receive a payment up to the amount of the guarantee. The renter must then reimburse the amount of damage to his guarantor, i.e. the insurance company or bank.
Advantages and disadvantages of the rent deposit guarantee
One advantage of the rental deposit guarantee for the tenant is that no large sum of money has to be raised in one go, because according to the legislator, the landlord may demand a rental deposit of a maximum of three months’ rent for private tenancies. Depending on the size of the rental property and against the background of rising rents, this can be quite expensive – money that the tenant could certainly put to good use elsewhere when moving in, for example for the new furnishings. If the rental deposit for the old rental property has not yet been refunded, there may also be a double charge.
But a rental deposit guarantee is not only possible for moving in. According to mietkautionsbürgschaft.de, even those who are already in a tenancy can – if the landlord agrees – have a rent deposit paid out again and converted into a rent deposit guarantee. In the same way, a guarantee can later be converted back into a cash deposit.
A disadvantage for the tenant is that the rental deposit guarantee does not incur high, but regular costs. It should also be noted that the assignment depends on the creditworthiness, because the bank or insurance company would of course also want to be sure that they would get their money refunded in the event of a damage report.
According to R+V, one advantage for the landlord is that the same legal certainty applies as with a cash deposit. There are also no fees for the landlord and the administrative effort is lower than with a conventional deposit. Because it has to be put into a separate account in order to separate it from the landlord’s other assets and to ensure that it is available in the event of damage or for a later repayment. In the event of damage, the landlord also has quick and easy access to the rental deposit – which, however, can also be interpreted as a disadvantage, since the landlord must first fill out and present the necessary documents in the event of a damage claim.
What is better – conventional rental deposit or rental deposit guarantee?
It is generally not possible to say whether the rental deposit in the form of cash or the rental deposit guarantee is the better way to deposit money in the event of damage – it depends entirely on the tenant’s situation. Anyone who has enough savings is certainly not badly advised to provide the money as a deposit in the conventional way. However, for tenants who are already tight on cash when moving and do not want to use any other loan, a rental deposit guarantee can make sense – especially if the deposit amount is quite high. Nevertheless, tenants should also consider in this case how long the usage period is and how high the monthly or annual costs are. The contributions of the various providers should first be compared and tenants should also speak to the landlord first, because not all landlords accept a rental deposit guarantee.
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