The landlord decides whether security is required for the tenancy, and almost all of them require it. What you can usually influence is the form that security takes. With a guarantee, a third party provides the security and you keep your savings available.
So in practice, renting without a deposit almost always means renting without a cash deposit, rather than renting without security.
Husleietvistutvalget describes the two forms this way: a deposit is a sum of money the tenant pays which is set aside as security for the landlord’s claims, while a guarantee is a promise from someone other than the tenant, for example an insurance company or NAV, standing as security for those same claims.
In short:
- The landlord decides whether security is required, and which form is accepted.
- The security can be a cash deposit or a guarantee.
- With a guarantee, a third party provides the security and the tenant pays for the service.
- NAV can provide a guarantee if you are entitled to financial social assistance.
- A private individual can also act as guarantor, often called a kausjonist.
- Deposit and guarantee combined cannot exceed six months’ rent.
- The tenant is responsible for rent and damage whichever form is chosen.
Do rentals with no security at all exist?
Yes, but they are rare. Nothing in the law requires a landlord to ask for a deposit, so a landlord is free not to. In practice most of them do, because it is the landlord’s only protection if rent goes unpaid or the home is damaged.
If you see a listing promising a home with no security at all, it is worth checking who the landlord is and what the home actually looks like before paying anything.
What does “without a deposit” actually mean?
When people say they rent without a deposit, they usually mean they avoid placing a large sum in a blocked account before moving in.
The security still exists. It is simply provided by someone other than you, and it costs you something other than a payment in: you pay for the guarantee instead.
That distinction is worth being clear about, because it determines what you are actually agreeing to when you sign.
Four ways to avoid tying up your savings
A deposit guarantee from a provider
A provider gives the landlord a guarantee for an agreed amount, and you pay for the service instead of placing the full deposit.
The provider assesses your application before the guarantee is issued, and that assessment is normally based on a credit assessment. The landlord has to accept the guarantee, and some providers additionally require the landlord to be a partner and to invite you.
A guarantee from NAV
NAV can help with a deposit through financial social assistance. NAV states that this help is usually given as a guarantee, but that financial support towards a deposit in a blocked deposit account can also be given.
You apply through the application for financial social assistance at NAV in your municipality, and NAV assesses it based on your situation and finances. Allow time for processing, and tell the landlord you are waiting for an answer.
A kausjonist: a private individual as guarantor
A parent, relative or other close contact can act as guarantor for the tenancy. The landlord has to accept the person, and the agreement should be in writing, stating the amount and the period it covers.
Remember that the guarantor takes on real financial responsibility. Talk through what that means before anyone signs.
Paying the deposit in instalments by agreement
Some landlords accept the deposit being paid across the first months rather than in one payment. This is purely an agreement between you, and it should be written into the tenancy agreement with amounts and dates.
What does using a guarantee instead of a deposit cost?
You pay for the guarantee. The amount depends on the rent, how much security is agreed and the provider’s terms, and it is paid either as a one-off amount or on a running basis through the tenancy.
That amount is the payment for the service, and it is normally not returned when the tenancy ends. What you get in return is that your savings stay available throughout the tenancy, for moving, furniture and the first month’s rent.
A cash deposit works the other way round: the money stays yours throughout and whatever is not used is returned, but it sits blocked for as long as you live there.
Which of the two works out better depends on how long you plan to stay and what you need the money for in the meantime.
What you remain responsible for
The guarantee moves the liquidity, not the responsibility.
If a valid claim arises, for example unpaid rent or damage beyond normal wear and tear, you are the one who pays it, either in full or through a payment plan. If you do not pay, the provider pays the landlord and the claim follows you.
In other words, you carry the same responsibility for honouring the tenancy agreement as you would with a cash deposit.
How much security can the landlord require?
Deposit and guarantee combined cannot exceed six months’ rent.
The parties can agree on a deposit, a guarantee or a combination, as long as the total security stays within that limit. The amount and the form should be agreed before you pay anything.
If you choose a cash deposit, the money must be held in a lawful, blocked deposit account in your name, and the landlord covers the cost of opening the account.
How to raise it with the landlord
Bring it up early, ideally before you bid on the home. These questions give you what you need:
- Do you accept a guarantee instead of a cash deposit?
- What amount should the security cover?
- Do you use a particular provider, or can I choose?
- If we go with a cash deposit, which bank is used for the deposit account?
- When does the security have to be in place relative to move-in?
If you are unsure what has been agreed, ask for it in writing in the tenancy agreement before you sign.
Sign the contract before you pay anything
This is the single most important rule in a home search. Never pay a deposit, a guarantee or rent before you have a signed tenancy agreement and have seen the home.
Rental fraud tends to follow the same pattern: a home that seems too good for the price, a landlord in a hurry, and a request to pay in order to “reserve” the place.
A serious landlord waits until the contract is signed.
Frequently asked questions
Can a landlord refuse to accept a guarantee?
Yes. The landlord decides which security is required, and a guarantee can replace a cash deposit when both parties agree to it.
Is a guarantee more expensive than a deposit?
It depends on how long you stay and what the alternative costs you. A deposit comes back, but it sits tied up. A guarantee costs an amount you do not get back, and in return you keep your money available.
Can I switch from a deposit to a guarantee mid-tenancy?
That requires the landlord to agree, and the guarantee has to be in place before the deposit is released. Raise it with the landlord and the provider in good time.
Do I get back what I pay for the guarantee?
Normally no. The amount is the payment for the service.
What if my guarantee application is not approved?
NAV is an option if you are entitled to financial social assistance, and a kausjonist or paying in instalments by agreement with the landlord are two other routes. The article on deposit guarantee approval covers what is assessed.
Can the landlord require both a deposit and a guarantee?
Yes, they can be combined, but the total amount cannot exceed six months’ rent.
Find the right solution for you
Are you a tenant?
Ask your landlord whether a deposit guarantee can be used for your tenancy, and contact NAV if you are entitled to financial social assistance towards a deposit.
Are you a landlord?
Book a free, no-obligation call with Emma to see how you can offer both a deposit account and a deposit guarantee to your tenants.
Sources
- Husleietvistutvalget: Deposit and guarantee
- Tenancy Act § 3-5
- Tenancy Act § 3-6
- NAV: Financial social assistance
- NAV: Deposit and guarantee for a deposit
- Keyhole Guarantee
- Keyhole Secure
