Lars Lubienetzki

July 28, 2026, 3:21 pm | Read time: 4 minutes

From a tenant’s perspective, the idea is not fundamentally wrong. The move is planned. Preparing the new apartment costs a lot of money. So why not offset the three months’ rent paid as a deposit for the current apartment with the outstanding rent payments?

“Using the Deposit for Rent”

“Lawyers refer to the described case as ‘using the deposit for rent,’” reports Thomas Pliester, a specialist lawyer for rental law from Mönchengladbach, when asked by myHOMEBOOK. “To stay with the example, the tenant then stops payments to the landlord for the last three months of the contract term because the landlord has the deposit for three months’ rent in his account. However, stopping rent payments with reference to the deposit is not permissible.”

This is a major misconception on the tenant’s part. Legally, rent payments and the deposit are two different matters. A paid security deposit is not a mere advance on rent in case a tenant fails to make monthly payments. It serves as security for the landlord for claims arising from the rental relationship. These include, among others:

• Damage to the apartment,
• Additional charges from the utility bill,
• other legitimate claims from the rental relationship, and
• also outstanding rent payments.

The landlord is indeed allowed to offset rent arrears with the deposit. If a tenant, on the other hand, uses the deposit as a “rent substitute,” it constitutes impermissible “using the deposit for rent.”

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Rental Law Makes a Clear Distinction

But why does rental law make such a clear distinction here? “The so-called ‘using the deposit for rent’ does not work legally because during the ongoing rental relationship, there is no due claim for the return of the deposit. Therefore, tenants cannot simply offset their last rent with the deposited security. The deposit remains until the final clarification of possible claims by the landlord,” explains the expert.

In other words, the offsetting is impermissible because the tenant does not yet have a claim for the return of the deposit during the ongoing rental relationship. The landlord, on the other hand, has a legitimate claim to the payment of the last month’s rent due to the valid rental contract. These are two claims that cannot fundamentally be offset against each other.

“The landlord has up to six months to return the deposit to the tenant,” notes attorney Thomas Pliester, referring to legal regulations. Judges have always pointed out the special security function of the deposit in their rulings in such cases.

Also interesting: What happens to electricity and gas contracts when moving?

What Awaits a Tenant

So, anyone who stops paying the monthly rent at the end of a rental relationship with reference to the deposit faces significant trouble:

• The tenant would immediately be in default without a reminder.
• With two months’ rent in arrears, the landlord may terminate the lease without notice,
• The landlord may legally demand the outstanding rent payments; thus, in addition to the rent still owed, further court and legal costs would be incurred by the tenant.

If it comes to a court case, the ruling usually always favors the landlord. “There are essentially no special cases. It would be conceivable, of course, if the landlord told the tenant that they could offset with the deposit. Then the claim for the return of the deposit is undisputed and also subject to offsetting. However, this practically never happens,” emphasizes Pliester.

In conclusion, the deposit is not a credit that a tenant can freely dispose of. The deposit serves as security for the landlord to settle outstanding, financially relevant bills from the rental relationship.