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Let's compare: rental guarantee without a bank deposit or deposit account?

See definitions and comparisons here to help you decide between a rental guarantee, security deposit, guarantee contract and bank deposit, etc.

When renting an apartment in Switzerland, the property management company or landlord will almost always ask for a rental guarantee. According to Article 257 (e) of the Swiss Code of Obligations, the rental guarantee for accommodation may not exceed three months' rent. For commercial properties, the rental guarantee may be higher than three months' rent.

This rental guarantee is also called a security deposit. There are two ways of providing your property management company or landlords with a rental guarantee:

  1. A rental guarantee in the form of a bank deposit account where you block three months' rent with a bank, e.g. UBS or a cantonal bank,
  2. A rental guarantee in the form of a security deposit for which you pay an annual premium. For a rental guarantee in the form of a deposit, you can contact a specialist company such as Firstcaution or insurance companies such as Axa or Helvetia.

The rental guarantee is blocked until the end of your lease agreement. Neither you nor the property management company or landlord can withdraw money from the rental guarantee without the consent of the other party or a payment summons.

What is the purpose of a rental guarantee?

The money from the security deposit or rental guarantee serves as a guarantee for the property management company or landlord. If you do not pay your rent or if you cause damage to the apartment during the rental period, the property management company or landlord can ask for money fromthe rental guarantee.

Who pays the arrears?

You have not paid your rent even though the property management company or landlord have asked you to do so several times and have even sent you a payment summons.

If you have a rental guarantee in the form of a bank deposit, the bank has to pay the amount of the arrears from the deposit to the property management company or landlord upon presentation of the payment summons. Article 257 (e) (3) of the The Swiss Civil Code states: “The bank may only return the securities with the agreement of both parties or on the basis of an unopposed payment summons or an enforceable judgement”.

If your rental guarantee is in the form of a deposit, you pay the arrears. If you are unable to pay, the property management company will request the rental guarantee from the insuring company, e.g. Firstcaution, Swisscaution, Smartcaution or insurance company, e.g. Axa, Helvetia, with whom you have signed a rental guarantee contract. You then reimburse the insuring company.

Who pays in the event of damage to my apartment?

If professionals have to repair any damage you have caused to the apartment or commercial property you have rented, the property management company or landlord will ask you to pay for the repairs.

You agree on the cost of the necessary repairs with the property management company or landlord on when you move out. If you have a rental guarantee in the form of a bank deposit, you will get your deposit back, but the cost of the repairs will be deducted.

If you have a rental guarantee in the form of a deposit, you pay for the damage. If you are unable to pay, the property management company will request the rental guarantee from the insuring company, e.g. Firstcaution, Swisscaution, Smartcaution or insurance company, e.g. Axa, Helvetia, with whom you have signed a rental guarantee contract. You then reimburse the insuring company.

When do I get my rental guarantee back?

You have not caused any damage and have always paid your rent? When you move out, the bank that issued the rental guarantee in the form of a bank deposit will reimburse you the money with interest, once the property management company or landlord agrees.

If the property management company or landlord opposes the release of funds, but does not instigate any legal action, i.e. enforcing a debt, you have to wait a year for the bank to release the money from the rental guarantee in your favour.

What is meant by a rental guarantee without a bank deposit?

Property management companies and landlords also accept rental guarantees without a bank deposit like the one offered by Firstcaution. A rental guarantee without a bank deposit is called a “security deposit”. Instead of blocking three months'rent in a bank, you pay an annual premium to the company holding the deposit. This is a small percentage of the three months' rent.

The rental guarantee without a bank deposit is not an insurance policy, it is a guarantee. The insuring company pays the property management company or landlords for any damage when you vacate the apartment. You then reimburse the insuring company. You will still have to pay any arrears or for any damage to your apartment.

Even if you do not cause any damage and have no arrears, your annual premiums are not refunded when you vacate your apartment. You pay annual premiums to benefit from a rental guarantee without a bank deposit. You pay for the rental guarantee service that the insuring company provides. Your annual premiums are not savings.

What are the advantages of a rental guarantee without a bank deposit over a rental guarantee with a bank deposit?

Rental guarantees with and without bank deposits have their advantages and disadvantages:

  1. With a rental guarantee in the form of a deposit, your money will not be blocked in a bank, you can use it to buy furniture, for example.
  2. You do not need to ask your parents for money if you are still studying and do not have enough money put aside.
  3. you can apply for a rental guarantee to rent accommodation even if you have no savings, are in receipt of social welfare benefits or are unemployed.
  4. With Firstcaution, you can receive a provisional rental guarantee certificate as soon as you start looking for accommodation. This way you can prove to the property management company or landlord that they have nothing to worry about.
  5. The rental guarantee in the form of a bank deposit account will be reimbursed up to one year after your move. This means that you will not have the money from the old apartment to use as a rental deposit for your new apartment. In other words, you have to tie up even more money and have essentially blocked the money for six months' rent.

Let’s compare: Firstcaution rental guarantee and Axa rental guarantee?

Rental deposits without bank deposits are offered in Switzerland by insurance companies such as Axa and La Mobilière or by specialised companies such as Firstcaution, Swisscaution, Gocaution or Smartcaution.

For insurance companies such as Axa or La Mobilière, rental deposits without a bank deposit are just one small service among many others. Firstcaution specialises in rental deposits without bank deposits: this is our only line of business. All our staff are specialists in this area. We can offer you expert advice.

Let's compare: Firstcaution or Swisscaution?

And how do I choose between Firstcaution and Swisscaution? What's the difference?

Swisscaution and Gocaution are both subsidiaries of major insurance companies: La Mobilière and Generali. Firstcaution is a family business. We like to get to know our customers and to answer any questions they may have. You may contact us at any time by phone, email, or instant messaging. We speak many other languages in addition to German and French. Our customer service team is always there for you.

You will feel the cost disadvantages of Swisscaution in your wallet. If you move into your apartment on 1 July, you only pay half of the year with Firstcaution. With Swisscaution, on the other hand, you pay a registration fee in the first year, which is almost as high as a full annual premium.

All you have to do is find an apartment. An apartment in the Swiss capital of Bern? Or in Switzerland's largest city, Zürich? Or let yourself be won over by the charm of the town of Olten! We wish you the best of luck in your search.

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