Rental deposit in Switzerland, blocked account or deposit insurance?

The rental deposit is a sum of money you give the landlord at the start of the lease as security. It covers unpaid rent or damage you are liable for. In German it is also called Mietzinsdepot. You only pay it if the lease provides for it.

For apartments it may be at most three monthly rents. This is set out in Art. 257e of the Code of Obligations. The landlord may also ask for less. For commercial premises the law names no upper limit.

An example from Lucerne. Your apartment costs 1900 francs rent per month. The deposit may then be at most 5700 francs.

You have two options. With a blocked account you set the money aside yourself. It stays your money and comes back with interest if the landlord makes no claim.

With deposit insurance you do not put money down. An insurer backs the landlord, much like a guarantee. For this you pay a premium every year. The premium is gone, even if no damage ever occurs. If the insurer pays the landlord, it claims the money back from you.

Insurance spares your savings when you move in. But it is only possible if the landlord agrees. Ask before you sign and put the agreement in the lease.

The landlord must place the deposit with a bank. The account is a savings account or deposit account in your name. It is blocked. The landlord cannot access it alone. The cantons may add rules on the form of the security.

The bank only pays out if

• both sides agree,
• or an enforceable payment order exists,
• or a court decision exists.

After you move out and hand over the apartment. If the landlord has no claim, both sides give the bank their consent. The bank then pays you the money with interest.

If the landlord has a claim, they must assert it legally within one year after the lease ends. For example, they start debt collection, turn to the conciliation authority or file a lawsuit. If they do not, you can ask the bank for the money directly.

Prepare when you move in. Note any defects in the handover report. You can find more in the checklist for your first apartment.

• “The landlord can take the deposit from the account on their own.” Wrong. They need your consent, an enforceable payment order or a court decision.
• “The deposit comes back automatically after you move out.” No. After you move out, the bank usually pays out only with the consent of both sides. Only when the landlord has not asserted a claim for a full year can you ask for the money alone.
• “Four months’ rent is normal.” For apartments this is not allowed.

First talk to the landlord and keep everything in writing. If that does not help, you can turn to the conciliation authority for tenancy matters in your canton. Whether legal expenses insurance covers such cases is explained on the page legal expenses insurance. Damage to the apartment is often covered by your personal liability insurance.

This page does not replace advice.