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When signing a residential lease, a rental guarantee is almost always required. And for good reason: this sum of money protects the landlord against possible unpaid rent or damage caused to the property:


  • In Switzerland, the Code of Obligations (Art. 257e) sets the rules regarding the amount, the deposit, and the use of the rental guarantee.
  • Tenants have two options: the traditional bank deposit or a rental guarantee provided by an insurance company.
  • The refund of the guarantee follows strict rules, particularly after the final inspection of the property.

The legal framework of the rental guarantee

First, the legal regime of the rental guarantee is based on the Swiss Code of Obligations (CO), which defines the rights and duties of both parties to the lease. These provisions aim to protect both the landlord and the tenant by ensuring transparent and regulated handling of the deposited amount.

Maximum amount and payment terms

According to Article 257e CO, the rental guarantee may not exceed the equivalent of three months’ net rent. The landlord therefore cannot set a higher amount, regardless of the value of the property.


The tenant is required to deposit this sum into a blocked bank account opened in their name. Often referred to as a "rental guarantee account", this amount legally remains the tenant’s property, and the landlord does not have free access to it.


Furthermore, any interest earned on the blocked sum belongs entirely to the tenant. It will be added to the initial amount when the guarantee is refunded, except in the case of justified deductions (damage, unpaid rent, repair costs).

Conditions of use

The rental guarantee may only be used to cover unpaid rent or charges, as well as repair costs resulting from damage attributable to the tenant.


Naturally, the landlord cannot withdraw money from the account on their own initiative. Any use of the deposited amount requires the tenant’s agreement or an enforceable decision issued by a court or conciliation authority.


Option 1: The traditional bank deposit

The traditional bank deposit remains the simplest and most common solution in Switzerland.

How it works

The tenant opens a rental guarantee account with a bank designated by the landlord. They pay in the required sum, usually equivalent to three months’ net rent.


The amount is then blocked until the end of the lease, and the account can only be released with the agreement of both parties or by court order. This type of account is often free of charge or subject to very low banking fees.

Advantages and disadvantages of the bank deposit

Advantages

The money remains in the tenant’s name and can only be used if a formal debt or damage is proven. In addition, the accumulated interest is paid back to the tenant at the end of the lease. It is therefore a very secure solution for both parties.

Disadvantages

Blocking several thousand francs can be financially challenging for tenants, especially when moving or temporarily paying double rent. Nevertheless, it is the safest option for those who have sufficient liquidity.

Option 2: The no-deposit rental guarantee

For tenants who want to avoid tying up capital, the no-deposit rental guarantee is the ideal solution.

How it works and cost

The concept is simple: a guarantee company or insurance provider acts as guarantor on behalf of the tenant. In the event of debt or damage, it advances the required amount to the landlord and then seeks reimbursement from the tenant.


In return, the tenant pays an annual or monthly premium, usually between 4% and 6% of the guarantee amount. This premium is never refunded, even if the lease ends without any issues.

Main providers in Switzerland

In Switzerland, several types of providers offer this service:

  • Insurance companies offering dedicated rental guarantee products

  • Specialized guarantee companies known for their reliability and fast processing

Most of these organizations have partnerships with real estate agencies or banks, which facilitates setting up the guarantee when signing the lease.

Advantages and disadvantages of the no-deposit guarantee

Advantages

  • No capital needs to be blocked: the tenant keeps their liquidity.
  • Fast subscription and simplified procedures.
  • Accepted by most agencies and landlords.

Disadvantages

  • Higher long-term cost: the premium is not recoverable.
  • In case of a claim, the guarantee company will seek reimbursement from the tenant.

How is the rental guarantee refunded?

The end of the lease marks the moment when the tenant may claim the refund of the rental guarantee, under certain conditions.

Deadlines and refund conditions

The guarantee is released after the final inspection of the property and with the landlord’s agreement. If no damage or unpaid rent is found, the landlord signs the release order, and the bank refunds the amount with interest.


If damage or unpaid rent is identified, the refund may be partial or delayed while the exact costs are assessed.

What happens in case of dispute?

If the landlord refuses to release the guarantee, they must prove that legal proceedings or debt collection actions are ongoing against the tenant.


A maximum period of one year applies: if the landlord has taken no action within that time, the tenant may request the refund directly from the bank, without the landlord’s consent. This rule protects tenants from unjustified withholding.


Conclusion

In summary, the rental guarantee is an essential security measure for the proper management of leases. Whether you choose a traditional bank deposit or a no-deposit solution, each option has advantages depending on the tenant’s financial situation.


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