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Created on Saturday, 08 November 2008 00:53

Last Updated on Friday, 28 December 2012 18:55

Landlord has to Separately Store Security Deposit of Commercial Renter

OLG Nuremberg of February 23, 2006 (re 13 U 2489/05). A tenant won a law suit in which he was initially sued; the landlord had been required to separate a deposit in cash from his own assets.

The Federal Supreme Court now determined that the landlord of rental contracts for business purposes must separately store the deposit from his own assets. The court understands such contractual stipulation as giving money “in trust”. As a principle, fiduciary money must always be kept separately from one’s own resources. So, what if your landlord fails to do this and still you to pay a part of the deposit? In such a case, you have the right to retain the remaining installments until the landlord proves you that he has separated your deposit (§273 BGB). How is the landlord to separate it? He can choose from a portfolio that any bank will grant for any kind of savings, where there is no risk to the entrusted money.


Published on the old CMS: 2007/5/8
Read on the old CMS till November 2008: 1.551 reads