When you sign a tenancy agreement, the first month's rent is rarely the only thing you need ready. On top of the rent, the landlord can require a deposit and prepaid rent — and together, that adds up to a serious amount of money.
At the same time, Danish contracts use two different words for money paid up front, and people treat them as if they meant the same thing. They don't. And the difference decides which rules apply to your money.
Here's what to know before you pay.
In short:
- The landlord can require a deposit of up to three months' rent.
- On top of that, the landlord can require prepaid rent of up to three months' rent.
- A deposit is security for claims at the end of the tenancy. It is not payment for living there.
- A deposit in a private rental and a resident's deposit in non-profit housing are not the same thing, and they follow different rules.
- Danish law does not require the deposit to sit in a separate account, and no interest is credited to the tenant.
- Both amounts are adjusted when the rent lawfully changes — downwards as well as up.
What a deposit actually is
A deposit is security. The landlord holds the money while you live there, and can use it to cover valid claims when the tenancy ends.
That could be:
- Unpaid rent
- Damage to the home beyond normal wear and tear
- Restoration work the tenancy agreement makes you responsible for
- Other claims arising from the tenancy
The important part: a deposit is not money you have already lost. If the landlord has no valid claims when you move out, it has to be paid back. We go through that part properly in our guide to getting your deposit back at move-out.
How much can the landlord require?
The landlord can require a deposit of up to three months' rent. On top of that, the landlord can require prepaid rent of up to three months' rent.
The two are not the same thing, and they exist for different reasons. The deposit is security. Prepaid rent is rent you have already paid, and normally live out at the end of the tenancy. We keep them apart in our article on prepaid rent and deposits.
Both amounts have to appear clearly in the tenancy agreement, separately, before you pay. If you want to work out the full amount you need at move-in, we walk through it step by step in our guide to what it costs to move into a rental home.
Private rental or non-profit housing: two different systems
This is one of the most common misunderstandings in the Danish rental market — and the word on your contract tells you which system you are in.
Deposit in a private rental
Your contract will call it depositum, and it is governed by the Danish Tenancy Act, lejeloven. That is the situation this article covers, and most likely yours.
Resident's deposit in non-profit housing
Your contract will call it indskud or beboerindskud, and it is governed by a separate act for non-profit housing, almenlejeloven. The rules for what the amount covers, and how it is settled when you move, are different. It is also why so many people ask whether they get this money back after eight or ten years — that question belongs to the non-profit system, not to the Tenancy Act.
So check your contract. If it says depositum, this article applies. If it says indskud and you live in non-profit housing, look for your answers in the rules for that sector instead.
Where is the money held while you live there?
Danish law does not require the deposit to be placed in a separate account in the tenant's name, and no interest is credited to the tenant.
That's worth knowing, because the rules are different in the markets Denmark tends to be compared with. In Norway, a cash deposit has to sit in a blocked account in the tenant's name, and the interest belongs to the tenant. In Germany, the money has to be kept separate from the landlord's own finances and held in an interest-bearing account. The Danish model is a different one — and it's one reason you can't carry experience straight from one country to another.
Can the amount change during the tenancy?
Yes. Both the deposit and the prepaid rent are tied to the level of the rent. When the rent lawfully changes, the amounts can be adjusted so they still match the agreed number of months' rent.
That works in both directions. If the rent lawfully falls, the amounts have to be adjusted down.
What if you can't pay the whole amount at once?
This is the most common financial obstacle in the rental market, and there is more than one thing you can do.
- Ask the landlord whether the amount can be paid in instalments, and get the agreement written into the contract.
- Check whether your municipality can help with the deposit in your situation. The rules and the assessment are individual, so you have to ask them yourself.
- Ask whether the landlord accepts a deposit guarantee instead of paying cash.
With a deposit guarantee, a third party provides the security to the landlord instead of you tying up your own money. The premium for the guarantee is not savings and is not paid back, and you are still responsible for the final move-out settlement. It's a different solution, not a free one — we go through the differences in our article on renting without a deposit.
Do note that you can't choose a Keyhole guarantee on your own. Your landlord needs an agreement with Keyhole first.
Checklist before you sign
- Get the total on paper: deposit, prepaid rent and first month's rent, each on its own line.
- Check that the amounts are in the tenancy agreement, and that each stays within three months' rent.
- Ask for any instalment agreement to be written into the contract.
- Never pay a deposit before you have a signed tenancy agreement.
- Transfer to an account you can document, and keep the receipt with the contract.
- Document the condition of the home at move-in, with photos and a move-in report.
- Read what the contract says about restoration at move-out.
Frequently asked questions
How much deposit can the landlord require?
Up to three months' rent. On top of that, the landlord can require prepaid rent of up to three months' rent.
Is the deposit in non-profit housing the same thing?
No. A deposit in a private rental follows the Tenancy Act. A resident's deposit in non-profit housing follows the separate act for that sector, and it is settled differently.
Does my deposit have to sit in a separate account?
Danish law does not require it. That's a difference from Norway and Germany, among others.
Do I earn interest on my deposit?
No. Under Danish law, no interest is credited to the tenant.
Can the deposit go up while I live there?
Yes, if the rent lawfully changes. The amount is adjusted so it still matches the agreed number of months' rent. That applies downwards too.
Can I pay the deposit in instalments?
It isn't a right, but it can be agreed. Get the agreement written into the tenancy agreement.
Is a deposit money I've lost?
No. If the landlord has no valid claims at move-out, the amount has to be paid back.
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