How you can secure the return of your rental guarantee ?

If you’re planning a move, you’re probably wondering how and when you’ll be able to get your rental guarantee back. Here’s everything you need to know about rental guarantees.

What is a rental guarantee ?

A rental or security guarantee, as it is also known, is an amount that a landlord usually requires a tenant to pay under a lease agreement. It cannot exceed three months’ rent.

Rental guarantees come in two forms :

• A rental guarantee without a bank account deposit : you arrange a security guarantee with a guarantor company such as Swisscaution, which undertakes to act as your guarantor in return for payment of an annual premium. This solution makes perfect sense because it avoids tying up a hefty sum of money for the entire term of your lease.

• A rental guarantee with a bank account deposit: you open a bank account and pay in the requisite sum to an escrow account and leave it there for the entire term of the lease.

The landlord may use the funds to cover any damage caused to the apartment by the tenant or if the tenant falls behind with their rental payments. Rental guarantees are provided for in Article 257 of the Swiss Code of Obligations.

In both cases, the guarantee can be released only with the joint agreement of the landlord and the tenant in the year after that in which the lease comes to an end.

When and how can the rental guarantee be released ?

No claims made by the landlord

If the rented property’s condition has not deteriorated and it has not been damaged, the landlord must release the guarantee at the end date of the tenant’s occupancy and after the final inventory has been completed. To speed up the process, we recommend asking your landlord to sign a release request confirming their agreement to return the rental guarantee. You can then forward this document directly to your insurer or bank.

Claims made by the landlord

In the event of damage or unpaid rent, the landlord has up to 12 months from the end date of the lease to assert their claims.

With the tenant’s agreement

If the tenant agrees to the landlord’s claims on the rental guarantee, settlement of unpaid rent or damage puts an end to the agreement between the tenant and the guarantor company or bank. The rental guarantee may be released less the amount claimed by the landlord.

Without the tenant’s agreement

The tenant may not agree to the landlord’s claims.
In this case, the landlord must provide one of the following to release the rental guarantee :

• An uncontested payment order; or
• A final and enforceable court judgment setting out the monetary amount owing to the landlord or specifying the loss incurred (rent arrears, repair costs etc.).

Release without the landlord’s agreement:

A rental guarantee may be released without the landlord’s agreement if, in the year following that in which the lease came to an end, they have not initiated any court procedures or filed any action against the tenant.

Under what circumstances may the landlord retain the security deposit?

In the event of a loss, the landlord may request payment of damages and/or unpaid rent from the financial institution selected by the tenant. For example :

• If the tenant has missed rent or service charge payments.
• If the property occupied has been damaged other than through normal wear and tear.

What’s the difference between normal and excessive wear and tear to a property?

Normal wear and tear to the property, including its installations and flooring, is the wear and tear caused over time through ordinary use of the premises. The tenant must look after the property properly for the entire term of the lease. They must carry out minor repairs as and when necessary. They may be held responsible for damage arising from negligence, lack of maintenance, excessive or abnormal use of its installations. This may include damage to wallpaper, flooring or carpets, holes in or large marks on its walls. Consequently, we always advise you to maintain the property and its installations on a regular basis.

Since there is sometimes a fine line between excessive and normal wear and tear, you can refer to the initial inventory report and also to the joint depreciation table (tableau paritaire des amortissements), published jointly by the property owners’ association and the tenant’s association. This table states the normal lifespan of the property’s fixtures and fittings.

What should you do if the landlord drags their feet on releasing the rental guarantee without having a valid reason ?

We recommend that you should send a letter (by registered mail) to the landlord requesting the release of the rental guarantee. You should state the amount of the rental guarantee. If this request goes unheeded, you may take one or more of the following steps :

1. Get in touch with your guarantor or the bank if the lease ended more than a year ago and the landlord has not commenced any proceedings as the insurance company must release the guarantee to you.
2. Contact the relevant lease and rental conciliation commission. The commission aims to help landlords and tenants reach agreement.  
3. As a last resort, the parties to a lease may ask the relevant lease and rent commission to settle disputes between landlords and tenants.