Owner asks for the rental guarantee in cash

Never ever pay the guarantee in cash (based on negative experience some friends faced).

On the other questions, I would leave this landlady as soon as I can, because the demand of cash itself is a big negative mark from her side and an indication of future troubles you may get into, dealing with her.

Hello,

In fact, belgian laws allow that under clear conditions.

The tenant has the choice of the type of rental guarantee.

When your contract stipulates that you must pay a money guarantee, you have the choice between 3 types.

The owner can not require one type of guarantee over another. In practice, the contract generally provides that "the lessee has opted for this type of guarantee". In this case, you must comply with the contract.

1) To provide a guarantee on an individual account (max 2 months rent):
Either open the account yourself. This is even the most logical solution when it is an account in your name. Most banks have standard contracts that you simply have to sign for your landlord.
Either you give the guarantee in person to the owner against a receipt signed by him or make a payment on his personal account, and he must deposit it in an individualized blocked account opened in your name. If your owner does not place the guarantee in a blocked account, he must pay you the interest at the average rate of the financial market. These interests are calculated from the day you gave him the amount of the guarantee. These interests are capitalized, which means that they are integrated progressively with the capital (amount of the guarantee at the beginning) to produce themselves interests.

2) To create a bank guarantee (max 3 months rent):
you must enter into an agreement with a bank. The latter agrees vis-à-vis the owner that a guarantee equivalent to a maximum of 3 months rent is released to compensate for your lack of tenant. In addition, you must reconstitute this capital little by little, for example by paying a certain amount each month to the bank (for a maximum of 3 years). In practice, bank guarantees are rare. Banks often charge high fees.

3) To constitute a bank guarantee via the CPAS (max 3 months rent):
you must go to a CPAS. The competent CPAS is that of the municipality where you live at the time you make the request to the CPAS.

It's difficult to find an accommodation in Brussels specially if your budget is limited, so yes I will leave as soon as find an appropriate place

the contract is exactly saying : " la garantie sera constituée soit par la production d'une garantie bancaire,  soit par le placement du montant de la garantie sur un compte individualisé au nom du preneur auprès de la banque , organisme financier de son choix ayant un siège social ou d'exploitation en Belgique. "

I have already went to the bank and did the procedure and when I called and told her that I went to the bank and that she have to go also to the same bank and sign the papers she refused and asked to get the money in cash

In that case, go away

Just to make sure, you didn't do any state of the apartment with an official, right?
If that's the case, you can say byebye to your money soon enough...

Run away!