RENTAL DEPOSIT FOR RESIDENTIAL USE

Do you want to settle in Switzerland temporarily or permanently? Keep in mind that to become a tenant, you must meet certain conditions specific to the Swiss rental market. This includes providing financial guarantees to your future landlord to protect them from potential unpaid rent. This is what a rental guarantee is for, also known as a rental deposit in Switzerland. What is it? How does it work? We’ll explain everything.

The Swiss rental agreement is a contract signed between a tenant and a landlord that defines all the conditions and obligations related to the rental, including:

• The subject of the rental agreement and its characteristics (the property, dimensions, etc.);
• The rental amount;
• The various charges;
• The duration of the contract (fixed-term or indefinite);
• The obligations of each party (amounts due, maintenance obligations, etc.).

Among the obligations of the tenant that the landlord can require is the rental guarantee or deposit. The Swiss rental deposit is an amount of money equivalent to a maximum of 3 months’ rent that the tenant agrees to pay upon signing the contract. It serves as a solvency guarantee for the payment of rent and charges, which may be deposited in a bank account, dedicated or not.

The rental guarantee can take different forms.

Bank deposit

This is the most commonly used form in Switzerland. The bank deposit guarantee starts with the choice of a bank by the property management or landlord. A rental guarantee account is then opened in the tenant’s name. Once the amount due is paid, the account will remain blocked from the signing of the contract until the end of the lease or its termination. Neither the landlord nor the tenant has the right to transfer the money to a personal account.

Using a guarantee company

Opting for this type of guarantee is less expensive: it allows the tenant to sign a lease contract without paying the full rental guarantee (equivalent to a maximum of three months’ rent). To do this, the tenant takes out a rental insurance policy with an organization or legal entity that acts as the guarantor. The guarantor commits to reimbursing unpaid rent and other rental charges in case of default. In return, the tenant will pay an enrollment fee and an annual fee. With Web Caution, you can benefit from a very economical, fast, and easy-to-obtain rental guarantee.

Swiss guarantor

This is a form of Swiss rental guarantee often required for foreigners and newly hired employees. The Swiss guarantor is an individual who must reside in Switzerland and have a good income. As the name suggests, they act as a guarantor for rental debts. Therefore, if the rent is not paid, the guarantor becomes responsible to the property management or landlord.

Although not mandatory, it is very common to require a rental guarantee in Switzerland, and this for several reasons.

Anyone can encounter financial problems: the creditor is never protected from a payment default by their tenant. The rental guarantee then serves as a guarantee for the creditor to receive the amounts due, regardless of the tenant’s financial situation, until the end of the lease. Furthermore, if the property suffers unusual wear and damage, the landlord is guaranteed that repairs will be covered. On the other hand, if no damage is found and all rents have been paid, the rental guarantee amount will be fully refunded to the tenant.

Have you decided to share your home and live in a shared apartment with one or more tenants? It’s a great idea that offers several advantages: not only for companionship but primarily for sharing the rent and utility costs.

For the signing of the shared rental lease, you have the following options:

• Either all the tenants sign the lease with a solidarity clause and share the rental responsibility in case of non-payment;
• Or one main tenant signs the lease in their name. They act as the guarantor and become the sole primary debtor in case of disputes or legal actions for the duration of the lease. The other tenants will then be subtenants. In any case, the landlord has the right to be informed.

But what about the rental guarantee? Is one single rental guarantee insurance enough for the entire shared apartment? The answer is yes, as long as you pay the 3 months’ rent that constitutes the deposit amount. Each of you can then choose one of the guarantee options mentioned above. But even with multiple tenants, 3 months’ rent can be a significant commitment. Take advantage of Web Caution’s offers for rental risk guarantees without the need for a bank guarantee.