Paying deposit or share
In Germany, it is not required to pay a deposit. However, it is often agreed upon in the contract and is used as rental collateral. The deposit may not exceed the value of 3 month’s rent without any additional costs. In some cases, you may pay off the deposit in 3 monthly rents along with the rental payment. The landlord must deposit the money on a separate bank account. If no claims can be asserted after the contract has been cancelled, the landlord is required to pay back the entire deposit including interest.
In the case of “Genossenschaftswohnungen”, shares of the cooperative must be purchased to become a member and to be able to rent an apartment from this specific cooperative. Usually, a cooperative requires one to two shares for a membership. However, when renting a cooperative apartment, it might be necessary to buy more shares depending on its size. In older, well established cooperatives share prices are normally relatively low, whereas younger cooperatives often need more capital and, therefore, ask for higher share prices. Nevertheless, buying shares of a cooperative works in many ways like paying a deposit. When the rental contract is cancelled and the membership terminated, the cooperative is required to refund the full share price. However, it may take a long time (up to 3 years) until you get your money back.