Finally the search is over. Despite many competitors, you have won the bid for your dream property. Your future landlord will even already have the contract ready. But the quickly ruins your joy. To the first month's rent due, the rent deposit must also be paid in advance, three months' rent. You did not expect it at all. This payment is a considerable burden on the already strained moving budget. We inform you about everything you need to know about the rent deposit and possible alternatives that relieve your reserves. However, this information is no substitute for advice from an insurer, your house bank or a tax advisor.
What is a rental security deposit and who may dispose of it?
Landlords may require a security deposit by lease agreement. According to the code of obligations art. 257e, this may not exceed 3 months' rent for private individuals in residential properties. There is no cap on commercial properties.
The rent deposit serves the landlord to:
Phone, walk-in or online.
Phone, walk-in or online.
- Retention of arrears of rent and service charges
- Compensate for repair costs caused by the tenant
The security deposit is agreed in writing. It is part of the rental contract. Only if it is agreed there, it must be provided. However, it can be included retrospectively as part of an amendment and must be done by the specified date.
The landlord may not collect the money personally or park it in an account in his name. Rather, writes art. 257e (OR) provides mutatis mutandis that a rent deposit is deposited in full in a separate rent savings account at a swiss bank immediately after payment. The blocked account is set up by the landlord, but must be in the tenant's name and also bear interest. It is earmarked and can only be released jointly by landlord and tenant under certain conditions.
Setting up the account also serves to protect the rent deposit in the event of the landlord's bankruptcy. If the security deposit account has not yet been established, the tenant may withhold the transfer for this reason. The cash payment of the security deposit, on the other hand, is unusual. The tenant should refuse a corresponding request.
In addition to the classic savings account, some credit institutions also offer rental deposit investment accounts. Investing in securities is often shown to be very advantageous. People like to forget that on the stock market not only rising prices are recorded, but also losses. And the latter reduces the rental deposit budget accordingly. Therefore, the risk is not insignificant with this option.
Blocked account data and interest rate details must be confirmed to the tenant when the rental deposit is transferred and annually via bank statement. This especially since he may decide on the account-holding institution. He can transfer the money directly to the blocked account, but must prove the transaction to the landlord.
The tenant may dispose of the interest, unless otherwise agreed upon. If the bank does not allow this with a blocked account, he has the right to demand a change of credit institution. If this request meets with resistance from the landlord, he must transfer the accrued interest to the tenant at the end of the year. If the landlord neither pays interest on the money nor puts it in a blocked account, the tenant is allowed to demand repayment and can claim the lost interest.
Even if the account fees are too high or the interest rates are too low, the tenant may ask to change banks. If the landlord refuses to do so, the tenant is entitled to compensation. Incidentally, the account fees may not exceed CHF 50 according to current legislation.
What is the landlord allowed to charge the rental deposit for??
If you want to ensure that you get your rent deposit back after you move out, you should take precautions when you move in. Since the security u. A. If the tenant is not satisfied with the rent damages, you should carry out an inspection together with the landlord on the day the keys are handed over. Record all the damage that you notice in and around the house or apartment. The apartment handover protocol should ideally be additionally enriched with photos and signed by you and the landlord. How to take precautions against being held liable for damage caused by your predecessors.
Take into account that with your signature under a list of defects or a handover protocol you acknowledge the content. If damages are listed there that you acknowledge, you are liable for them unless otherwise agreed in writing. If you disagree with the landlord that any damage was caused by you, you should note that on the record.
Of course, damage can still occur later for which you are not responsible. Then it is important that you immediately record this in pictures and words and send the record by registered mail to the landlord. Do not forget to always keep a duplicate copy of the letter. By the way, the landlord also has the possibility to report hidden defects afterwards. For this purpose, he must also report them within the next few days. Do not do this weeks later.
Of course, the landlord is only allowed to report such defects in the property or. Show apartment, which have been caused by excessive use or by unauthorized changes. Landlords cannot offset common signs of wear and tear, such as drilled holes, worn corners or common signs of age on wallpaper, against the rental deposit.
Cracks and intense stains in the carpet or on parquet flooring, on the other hand, are just as chargeable as cracked tiles in the bathroom and kitchen due to dropped objects. The landlord can also have damage caused by negligence, such as mold caused by infrequent ventilation, repaired at a charge. In case of doubt, however, the burden of proof lies with him that you have actually caused these damages.
How and when do you get the service back?
Since the deposit is parked in a blocked account, you only get it back if it is released again. For this purpose, the landlord must give the release, as the money serves as security for any damage to his property. If you move out of the rented apartment, you should arrange a final inspection appointment with the landlord or a property management company commissioned by him early on. On this date, the apartment must be completely inspected, including the basement and any. To inspect the terrace and garden area. Here, an apartment handover protocol should serve you as a checklist.
If no defects have been found, have the landlord or his authorized representative sign the protocol including the deposit release confirmation on the spot. The landlord thus releases the account to the bank.
You additionally prove to the account-holding institution with the signed termination agreement that you are entitled to the rental deposit. The bank will then pay out. If the landlord does not want to release directly and later fails to inform his bank, the bank may not pay out the money. In this case, you must request your landlord in writing for release. The landlord usually has 30 days to release the security deposit to the bank if there are no claims.
However, if the landlord recognizes damage as needing repair, he may have it repaired and only has to release the rest of the deposit after the bills incurred have been paid. The landlord must send you a final statement of account and at the same time instruct the bank to repay the difference to you. All invoices must be disclosed to you at the latest at the landlord's request. If there are any uncertainties regarding repairs and costs, you should ask the landlord in writing about them and give reasons for them. The landlord usually has 3 months for the work and its settlement.
Once you have accepted the final settlement and signed the dissolution agreements, there is nothing standing in the way of closing the rent deposit blocking account. Unfortunately, you still need the consent of the landlord at the bank. Without this, you can only close the account after one year. Provided there is no legal dispute between the parties. If the landlord does not release the deposit, ask him to do so again by registered mail.
In case of emergency, contact the conciliation board or the tenants' association. Often the legal department of the bank will also assist you, as credit institutions do not like to be named in such disputes. Often, a clarifying phone call with the landlord will already help.
6 tips for a smooth repayment of the rental deposit:
Tip 1: joint inspection when handing over the keys
Carry out an inspection with the landlord when you move in and hand over the keys. Record any damage in words and pictures. Agree with each other who will repair these damages and by when.
Tip 2: take care of the maintenance of the property
Make sure that there is no excessive wear and tear. If a tile is cracked or the parquet floor is scratched, it is advisable not to wait until you move out to inform the landlord. Clarify immediately what needs to be done. This will help you avoid the delay in releasing your security deposit later on.
Tip 3: arrange an appointment for the final inspection
Arrange an appointment for the final inspection with your landlord in good time. Also provide photographic evidence of damage. Make sure that a possible representative of the landlord is authorized to sign the final protocol and the release declaration for the bank on site.
Tip 4: submit the documents to the bank
To avoid delays in the mail, it is best to go to the bank yourself. Present the signed termination agreement and the release statement. Provided that the landlord's release has been obtained, the bank will pay out directly.
Tip 5: support the repair work
If there is damage that needs to be repaired, you can offer to have the landlord repair it before you move out. This may be the case, for example, if the tiles are cracked. Clarify in advance whether you can realize this repair at your own expense to avoid the deduction from the rent deposit for it. This may allow for a less expensive repair to be made. Alternatively, the landlord can also order and pay for the repairs. You still save time until the blocked account is released.
Tip 6: talk to your landlord!
In the event of ambiguities and delays, contact the landlord in writing at an early stage. The best way is by registered mail. If this remains fruitless, involve the arbitration authority or the tenants' association.
Alternative security deposits instead of cash deposits
Who finds himself in the midst of never-ending boxes during a move, wishes quite spontaneously a moving company, which takes over this work from you. But a look at your own account shows that this dream remains a dream. Because the first rent and maximally three monthly rents deposit strain the account nevertheless very much. The thought that the deposit will remain blocked for the entire period of the tenancy, probably a few years, is additionally frustrating. How nice it would be to be able to replace this burden in another way.
Who lacks the necessary financial budget, can also try to agree with the landlord on an installment payment or reduce the deposit. However, the risk that the owner of the property will then prefer to choose more solvent tenants is great. Therefore, you should not openly tell him about his own financial plight. It is better to look for an alternative.
A possible solution already exists: the rent deposit insurance. Whereby the term is rather misleading, because strictly speaking it is not an insurance, but a guarantee. Instead of transferring money to the blocked account provided by the landlord, take out a rent deposit guarantee, which will stand in for you in the event of a claim or rent arrears. This has some advantages for you.
- The biggest advantage: you can use the amount you would otherwise have to park in the blocked account elsewhere.
- The second advantage is that you can rent a property that you might not be able to afford due to the high rental deposit amount.
- Advantage three: if a rental deposit account already exists, you have the freedom to release the blocked money early by taking out the appropriate insurance.
The procedure is very simple: the insurance company guarantees the landlord coverage of the risk in the amount of the deposit by means of a surety bond. You pay an annual insurance premium for it.
Possible providers for rental deposit insurance:
- Smartcaution (www.Smartcaution.Ch)
- Axa rent deposit (www.Axa.Ch/en/private-customers/offers/residential-property/rent-deposit.Html)
- Helvetia mietkaution (www.Helvetia.Com/ch/web/en/privatkunden/wohnen-und-eigentum/wohnen/mietkaution.Html)
- First caution (www.Firstcaution.Ch)
- The mobiliar (www.Mobiliar.Ch/insurance-and-provision/housing-and-property/rental-deposit-insurance)
- Swisscaution (www.Swisscaution.Ch/en)
- Gocaution (www.Gocaution.Ch/fr)
Rental deposit insurance – security with pitfalls
The landlord must agree to the conclusion of a rental deposit insurance policy. Because the deposit amount on a blocked account is still the fastest and easiest variant for him. Especially since in the event of a claim, he can only claim the insurance benefit if the tenant has signed on the rent deposit certificate, which is delivered to the landlord as security. And if the latter confirms the claims of the landlord. If he refuses his consent, the landlord also receives no money for the time being. A tricky situation.
The downside for the tenant is that he can only cancel the insurance by presenting this rental deposit certificate. However, the landlord has 12 months for the return. Without the original certificate, the policyholder, i.E. The tenant, continues to be charged the annual premiums, even though he may no longer have a tenancy relationship with the property.
It should also be borne in mind that the insurance company will not pay for the loss without consideration. Because it reclaims the deposit amount it pays to the landlord from the policyholder again. In addition, the annual insurance premium burdens the tenant's budget. If the tenant does not pay the premiums, the insurer does not terminate the contract as usual according to article 20 of the VVG. Instead, the insurer makes advance payments in the event of a claim and reclaims the outstanding amounts from the policyholder.
To keep the costs as low as possible and still avoid the high deposit amount, you can also just bridge the time until the deposit amount is saved with a rental deposit insurance policy. Once you have a foothold in your new property and your finances are in order, you can cancel the insurance and transfer the deposit amount to your landlord from your own funds.
Not always an insurance company accepts the application for rent deposit insurance. The basis, similar to a credit application, is the creditworthiness of the tenant and the amount of performance. If the applicant's data does not meet the insurance company's criteria, the company can reject the application. It is then advisable to ask the reasons for the refusal, or to apply for a bank loan.
Insurance application for rental deposit rejected – what to do??
The alternative to a cash deposit you thought was safe vanishes into thin air like a soap bubble. The application is denied and you wonder why. However, it is best to ask your intended insurer. Since most applications are now made mostly or even entirely online, it is possible that your information did not meet the filter criteria or was incorrect.
It is sufficient if a selection field does not contain the correct answer for you and you have selected a similar answer option. Or you may have neglected to submit additional documentation, such as a copy of your lease or proof of salary. You should also check the data basis for the credit rating, for example, the swiss debt collection office. Because it is often outdated data that is stored about you, which casts a bad picture on your creditworthiness. Clear records if needed and have those older than three years deleted.
Also question the reasons for rejection. Often the refusal can be changed in such a way nevertheless into a permission. And if not, you still have the option of putting a family member or acquaintance on joint and several liability. However, this private guarantee must also be approved by the landlord.
In addition, bank loans are a readily available alternative. Those who find it too costly or have been turned down to purchase rental deposit insurance should approach their bank advisor about it. Most of the time loans are affordable for the amount of the deposit and are spent without problems.
By the way, it is not an option to owe the rent deposit in spite of a contractual agreement. If you fail to pay the deposit even after being asked to do so by the landlord, he or she may terminate your lease without notice or refuse to give you the keys already. Then the search for an apartment begins again.
Your rental deposit and the tax
If you hope that you can deduct the cost of your rental deposit from your taxes, this hope dies last for private individuals. Because at some point the deposit flows back to you and therefore belongs to your taxable assets. You are also entitled to interest and thus increase your income. Both must therefore be reported in the tax.
If the property in question is rented for professional or commercial reasons, there are possibilities for tax deductibility. Please consult your tax advisor or the tax authorities for more information.
Tenants should calculate all options before signing the contract and inform themselves sufficiently or. Get advice. If you want to save costs and have sufficient financial leeway, you would do well to transfer the agreed rental deposit to the blocked account of a credit institution of your choice. With the prospect of the rent deposit in direct access, the chance of winning the bid for the property also increases rapidly with the future landlord.