The security deposit is often the largest single amount when moving in – and a frequent point of dispute when moving out. The Mietrechtsgesetz regulates how the landlord must hold the money and when they must repay it. Here you will learn what to watch for regarding the amount, investment and reclaiming.
What the deposit is for and which rules apply
With the deposit the landlord secures themselves against claims that may arise against you from the tenancy agreement in the future – for example unpaid rent or damage to the flat [S1]. The deposit rule of § 16b MRG applies not only in the full application scope, but also in the partial application scope of the MRG, for example for flats in privately financed new builds or for rented condominiums in buildings with building permits issued after 8 May 1945 [S2]. If your tenancy falls entirely outside the MRG, § 16b does not apply; then the agreement in the contract becomes more important [S2].
How high may the deposit be?
The MRG does not specify a fixed statutory maximum amount [S1]. In practice three months’ rent is common [S8][S9]. However, an arbitrarily high deposit is not permissible: in the full application scope, case law requires that a cash deposit be in a reasonable proportion to the landlord’s security interest. If it exceeds that, the exceeding part is treated like a prohibited key money and can be reclaimed [S3].
Hypothetical example: For a small unfurnished period apartment with a gross rent of 700 euros the landlord demands twelve months’ rent as a deposit, without any apparent special reason. It is worthwhile to have such an amount reviewed.
Secure investment and interest
If you hand over the deposit as a sum of money, the landlord must invest it in an interest-bearing savings book [S1]. Other forms of investment are only permitted if they offer equally good interest and equal security – in particular through statutory deposit protection – and if the money remains clearly separated from the landlord’s assets [S1]. At your request the landlord must inform you in writing about the investment [S1]. According to case law you can demand accounting for the investment and the interest earned during and after the tenancy [S4].
If the landlord becomes insolvent, the deposit may not be used for third-party claims; after the end of the contract you can demand separate satisfaction from the deposit savings book [S1].
Repayment after moving out
When the tenancy ends, the landlord must repay the deposit together with the interest earned without delay – insofar as they do not need it for legitimate claims arising from the tenancy [S1]. They may therefore only deduct what they can actually claim from you.
You are not liable for normal wear and tear from proper use [S5]. In principle you return the flat in the condition in which you took it over [S6]. A standard clause obliging you to return the flat “properly” painted white was judged by the OGH to be grossly disadvantageous and therefore invalid [S7]. A deduction for repainting solely because of ordinary wear is therefore to be viewed critically.
The landlord must assert claims for damage under the ABGB in court at the latest one year after surrender, otherwise the right expires [S6]. How this period affects a retained deposit is a question for the individual case.
If the landlord does not repay or repays too little
- Demand the deposit back in writing, give your bank details and set a reasonable deadline (editorial recommendation).
- Request a comprehensible statement of account for any deductions.
- If this is unsuccessful, the amount reclaimable can be decided in the housing non-contentious procedure – expressly also in the partial application scope of the MRG [S1][S10].
The competent authority is the district court in whose district the flat is located. If there is a mediation office in your municipality, you must file the application there first [S10][S11]. In Vienna this is the Schlichtungsstelle für wohnrechtliche Angelegenheiten; in other federal states such offices exist only in individual municipalities. Template letters for reclaiming are offered by the Arbeiterkammer [S8].
Tips: document the handover well (editorial recommendation)
- Photograph every room, floors, walls, windows, sanitary fittings and appliances when you move in – with date.
- Record existing damage in a handover protocol and have it signed by the landlord or the property management.
- Note which items of furniture are rented with the flat.
- When moving out take photos again and prepare a joint protocol, ideally with an accompanying person as a witness.
- Keep proof of the deposit payment until full repayment.