Try Dorit for FreeSecurity Guarantee Cap (3 Months' Rent)
Under the law, a landlord can demand guarantees up to a total maximum value of 3 months' rent.
section 7 of the Rental Law sets a maximum ceiling on security requirements to protect tenants from excessive demands. The guarantees can be any combination of promissory notes, bank guarantees, cash deposits, or personal guarantors. However, the combined value of all guarantees cannot exceed 3 times the monthly rent.
If a landlord demands more than the legal maximum, the tenant can refuse and turn to court to enforce the law. Note that the 3-month rent cap applies to the total financial value of all collateral combined, not the number of guarantee instruments used (for instance, a landlord may ask for a promissory note equal to 2 months' rent plus a bank guarantee equal to 1 month's rent, totaling 3).
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Related terms
Bank Guarantee
A formal commitment from a bank to pay the landlord a specified sum if the tenant fails to fulfill their obligations under the lease.
Promissory Note
A legal document where a tenant commits to paying the landlord a specific amount if the lease is breached, payable on demand.
Cash Deposit (key money)
A sum paid upfront by the tenant via cash or bank transfer to secure their obligations under the lease agreement.
The information in this glossary is for general informational purposes only and does not constitute legal advice. In the event of a dispute or a specific legal question, consult an attorney specializing in tenancy law.