BGH Decision: Landlords' Rights to Withhold Security Deposits Clarified

The recent BGH (Federal Court of Justice) decision has brought clarity to the circumstances under which landlords can withhold security deposits. Landlords are now allowed to retain the deposit for unpaid rent, operating costs, cosmetic repairs, and damages to the rental property, as long as the deposit is used for its intended purpose.

Notably, landlords have a 6-month window to claim compensation for damages. This ruling strengthens landlords' positions, enabling them to retain the security deposit even after the deadline has passed.

The decision has sparked mixed reactions, with property owners' associations welcoming it for facilitating damage claims, while tenant associations criticize it for potentially affecting tenants' rights.