Rental deposit: what is it, and how do I get it back?

When you rent an apartment, there’s more than just furniture to budget for – the rental deposit is also a significant expense. Comparis answers key questions on this topic.

Elena Wetli Foto
Elena Wetli

13.12.2022

A couple sits on a sofa and calculates their finances. Tenants moving into a new apartment often depend on their rental deposit being paid back as soon as possible.

iStock/Encoder86

1.What is a rental deposit?
2.Am I obliged to pay a rental deposit?
3.What if I can’t afford the rental deposit?
4.Where is the rental deposit held?
5.When can the landlord access the rental deposit?
6.Closing a rental deposit account: what do I need to do?
7.When do I get the deposit back?
8.Rental deposit repayment: how long can my landlord block the rent deposit account?
9.What do I do if my landlord doesn’t return the rental deposit?

1. What is a rental deposit?

A rental deposit is a form of security for landlords. If the tenant damages the apartment or falls behind on their rent, the deposit provides protection. The rental deposit is regulated by Swiss law as part of tenancy law in Article 257e of the Code of Obligations.

2. Am I obliged to pay a rental deposit?

Most landlords require a rental deposit. The rental deposit is defined in the rental agreement. It can be the equivalent of up to three months’ rent (gross rent).

3. What if I can’t afford the rental deposit?

Rental deposit insurance

An insurance company or a bank will guarantee your deposit in exchange for an annual premium. It guarantees the payment of damages or rental arrears vis-à-vis the landlord. You need to obtain prior approval for the rental deposit insurance from the rental administration or landlord. They can refuse without giving a reason.

You can find more information about rental deposit insurance here: What is rental deposit insurance?

Personal loan

It’s only worth taking out rental deposit insurance if you have no cash available or need to invest the money elsewhere. A personal loan might therefore provide an alternative to rental deposit insurance. In some cases, it may even work out cheaper.

Find a personal loan now

4. Where is the rental deposit held?

You usually pay the rental deposit into a blocked account at a bank. The account is in your name and cannot be accessed by either party for the duration of the tenancy agreement.

Each year, you will receive an account statement listing the interest accrued and fees charged. The landlord usually pays the fees. However, they may charge you up to 50 francs.

5. When can the landlord access the rental deposit?

The landlord may only access the rental deposit at the end of the tenancy agreement, and only if one of the following situations has occurred:

  • You owe the landlord money for rent or ancillary costs.

  • There is damage to the apartment that is not part of normal wear and tear.

6. Closing a rental deposit account: what do I need to do?

For the repayment of the rental deposit, the bank needs a signed cancellation order from you and the landlord. In most cases, the landlord or rental administration will send you a cancellation letter that has already been signed. Once you have added your signature, you can send the letter to the bank.

7. When do I get the deposit back?

If by the end of the tenancy agreement you don’t owe any rent and there is no damage to the apartment, the deposit is released soon after you have moved out (usually within 30 days) and paid to you.

Tip: get the rental company or landlord to sign a transfer order for the bank at the apartment handover, stating that they are happy to release the deposit. This will speed up the payout process.

8. Rental deposit repayment: how long can my landlord block the rent deposit account?

Is there any repair work to be carried out that needs to be paid for? The landlord must have the work completed within three months and produce the final bill.

Have the ancillary costs not yet been settled? The landlord may then withhold the deposit in the amount of the presumed additional costs until the end of the accounting period. The closing date of the accounting period is usually recorded in the tenancy agreement.

The absolute final deadline is twelve months you move out. Then the rental deposit must be paid out whether or not the landlord has consented. In the event of a dispute, you can seek support from the tenants’ association.

9. What do I do if my landlord doesn’t return the rental deposit?

Has your landlord not returned your deposit without any legitimate reasons? Then you should send a registered letter requesting that the money be released. Please include details of the savings account in question, the total rental deposit and the required deadline. If the landlord continues to cause issues, you can do the following:

  • Engage the arbitration authority: initiate proceedings with the arbitration authority. It is sufficient to request the release of the deposit in a letter to the arbitration authority. The procedure is free of charge.

  • Request withdrawal from the bank: has one year passed since you moved out? Then the bank has to pay you the money. The only requirement for this is that the landlord has not initiated any legal action against you.

Are you looking for an apartment? Browse the largest selection of property listings in Switzerland at Comparis and find your dream apartment.

This article was first published on 18.10.2017

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