The rental deposit is a blocked bank account in the tenant’s name that is released jointly after the tenancy ends and all claims have been settled. In practice within around 30 days for a defect-free handover, but at the latest 12 months after the end of the tenancy under Art. 257e para. 3 of the Swiss Code of Obligations.
| Aspect | Details |
| Legal basis | Art. 257e CO |
| Maximum deposit amount | 3 months’ net rent, excluding ancillary costs (residential tenancy), Art. 257e para. 2 CO |
| Standard case (no defects) | Release in practice within around 30 days |
| Dispute | Withheld during damage settlement, no statutory interim limit |
| Absolute maximum period | 12 months after the end of the tenancy (reclaim directly from the bank thereafter), Art. 257e para. 3 CO |
| Permitted deductions | Damage beyond normal wear and tear, unpaid rent, outstanding ancillary costs |
| Non-permitted deductions | Normal signs of use, age-related renovations |
| First instance in disputes | Cantonal conciliation authority (Art. 197 and 200 CPC) |
What is a rental deposit and how is it regulated in Switzerland?
The rental deposit is not the landlord’s money: it sits in a blocked account in your name and is governed by Art. 257e of the Swiss Code of Obligations. In practice, this blocked account is also referred to as a rent deposit, rental deposit account, security deposit or simply “deposit”. The money belongs to you, and the landlord has no free access to it.
- Blocked account in your name: The bank holds the account in the tenant’s name, not the landlord’s.
- Maximum amount: Under Art. 257e para. 2 CO, the deposit for residential tenancies may not exceed 3 months’ net rent, i.e. excluding ancillary costs.
- Interest: All interest earned on the deposit account belongs to you and is paid out together with the deposit upon release.
- Release only jointly: The bank only pays out the deposit when both parties grant release, or when the statutory maximum period has expired.
When and how is the rental deposit repaid?
The deposit flows back as soon as the landlord and tenant jointly grant the bank release, in practice usually within around 30 days of a defect-free handover.
If processing takes longer, for example because damage is disputed, the bank can only release the deposit once both parties have reached agreement. There is no statutory interim limit for this period. The cap is set by Art. 257e para. 3 CO: if the landlord has not legally asserted a claim within 12 months of the end of the tenancy, neither through debt collection nor in court, the tenant can reclaim the deposit directly from the bank, without the landlord’s consent.
| Situation | Deadline | Legal basis |
| Defect-free handover | In practice within around 30 days | Practical value |
| Disputed damage | During damage settlement (up to several months) | No statutory interim limit |
| Absolute maximum period | 12 months after the end of the tenancy | Art. 257e para. 3 CO |
Which deductions may the landlord make, and which not?
The landlord may only withhold for damage that goes beyond normal wear and tear, and must apply the current (depreciated) value, not the replacement value, of the damaged fitting. What matters is what was recorded in writing in the handover report (Wohnungsabgabeprotokoll): deductions not anchored there are very hard to enforce before the conciliation authority.
Permitted deductions:
- Damage that goes beyond normal wear and tear (e.g. deep scratches in the parquet, holes in the wall)
- Unpaid rent or outstanding ancillary costs
- Omitted final cleaning, if contractually agreed
Non-permitted deductions:
- Normal signs of use that arise from contractual living (e.g. slight wall discolouration)
- Renovations that would have been due anyway because of age
Whether damage counts as excessive depends on the lifespan of the affected item. If a carpet is already 15 years old and would have had to be replaced anyway, the tenant only bears a proportionate residual value.
Step by step: how to reclaim your rental deposit
The most direct route to repayment is a clean handover with a report, followed by the joint release declaration to the bank. The following five steps guide you through the entire process.
Step 1: Apartment handover
Action: Carry out the handover together with the landlord and record all defects, damage and meter readings in writing.
Document: Handover report (Wohnungsabgabeprotokoll), signed by both parties.
Tip: Ask for a copy of the report immediately and supplement the documentation with photos.
Step 2: Joint release declaration
Action: Sign the release declaration together with the landlord and send it to the bank.
Document: Release form from the account-holding bank.
Tip: Request the bank form in advance to avoid delays.
Step 3: Written request
Action: If the landlord does not respond, send a written request for release.
Document: Registered letter, recommended for evidence, not legally required.
Tip: Set a clear deadline of 14 to 30 days and keep the proof of posting.
Step 4: Use a template letter
Action: Draft a template letter that formally documents the demand to release the deposit account.
Document: Template letter, available for example through the Swiss Tenants’ Association.
Tip: State the deposit amount, the account number, the move-out date and the deadline set in the letter.
Step 5: Escalation
Action: If the landlord remains inactive, initiate escalation.
Document: Request for conciliation with the cantonal conciliation authority.
Tip: Keep all previous steps and supporting documents together; the next section explains the exact procedure.
What to do if the landlord does not release the deposit?
If the landlord refuses release, the cantonal conciliation authority is the right first point of contact before you initiate legal action. The conciliation procedure for tenancy disputes is usually free of charge or involves very low costs and offers a quick, out-of-court solution. In tenancy matters the conciliation authority also acts as a legal advice centre (Art. 201 para. 2 CPC), so the advice is free. Before the deadline expires, the bank will also release the deposit if a legally binding payment order or court judgment is produced.
If you have taken all the steps and 12 months have passed since the end of the tenancy without the landlord having legally asserted a claim, you can, based on Art. 257e para. 3 CO, reclaim the deposit directly from the bank, i.e. without the landlord’s consent. This right is anchored in law and represents the last resort before legal proceedings become necessary.
Frequently Asked Questions
How long may the landlord withhold the rental deposit?
The landlord may withhold the deposit for as long as legitimate claims remain unresolved, but no longer than 12 months after the end of the tenancy under Art. 257e para. 3 CO. If no claim has been legally asserted by then, the tenant can reclaim the deposit directly from the bank. The Swiss Code of Obligations thus gives the tenant a clear instrument. If the claims are clarified earlier, release must take place jointly with the relevant bank. In the event of disagreement, the cantonal conciliation authority can be involved.
What counts as normal wear and tear, and what do I not have to pay?
Normal wear and tear from contractual use, such as slight wall discolouration or scratches after many years of use, does not have to be replaced by the tenant. Guidance on what still counts as normal is provided by the joint useful-life table (paritätische Lebensdauertabelle). Important: only damage recorded in writing in the handover report (Wohnungsabgabeprotokoll) can serve as a basis for deductions at all. Further information on rental damage at the apartment handover helps you better assess disputed points.
Can I replace the deposit with an insurance policy?
Yes, instead of a deposit account, you can take out rental deposit insurance that replaces the blocked bank deposit. The insurance assumes liability towards the landlord, while you do not have to tie up liquid funds.
What happens to the interest on the deposit account?
The interest on the deposit account belongs to the tenant and is paid out together with the deposit amount upon release. This applies regardless of which bank holds the account. Art. 257e CO makes clear that the entire balance, capital and interest, is owed to the tenant. The interest must be declared as income in the tax return.
Do I have to declare the deposit in my tax return?
Yes, the deposit must be declared as assets and the interest as income in the tax return, because the deposit account legally belongs to you. This applies even if you have no access to the blocked account. Anyone unsure after a move about exactly where taxes after moving are payable will find a helpful overview there.
