Find out more about the options and solutions for rental deposits for offices and commercial premises in Switzerland.
The security deposit for office and commercial space in Switzerland is a key issue for entrepreneurs and landlords alike. When renting commercial or office space, the question often arises as to which form of security deposit makes the most sense: the traditional security deposit account or the modern security deposit insurance. In this article, we will examine the differences, advantages and legal bases of both options in the context of Swiss tenancy law.
In Switzerland, the legal provisions for the rent deposit are anchored in the Swiss Code of Obligations (CO). While there is an upper limit of three months' rent for the deposit for residential premises (Art. 257e para. 2 CO), there is no legal limit for business premises. This means that the parties are free to agree on the amount of the deposit. The deposit for office and commercial space is usually around 6 months' rent. Source: Swiss Code of Obligations (OR), Art. 257e.
How it works
With a security deposit, the tenant deposits an agreed sum of money in a special blocked account. This account is opened in the tenant's name and both parties must agree to any disbursements. The deposit serves as security for the landlord in the event of outstanding rent payments or damage to the rented property.
Advantages
Security for both parties: the money is securely stored and can only be released with the consent of both parties.
Interest income: The deposited money accrues interest, which is credited to the tenant.
Disadvantages
Liquidity burden: Large deposits can place a considerable burden on the tenant's liquidity, which can be particularly problematic for start-ups or small companies.
Administrative burden: Opening and managing the blocked account requires administrative effort.
How it works
Security deposit insurance is an insurance solution in which the tenant pays an annual premium to an insurance company instead of a cash deposit. The insurance company guarantees the deposit amount to the landlord.
Advantages
Liquidity: The tenant does not have to deposit a large sum of money and can use the capital for other purposes.
Simplicity: Less administrative work, as there is no need to open a blocked account.
Disadvantages
Cost: The annual premiums are lost money and are not refunded.
Acceptance: Not all landlords accept a rental deposit insurance as security.
Comparison: rental deposit account vs. rental deposit insurance
Criteria | Security deposit account | Security deposit insurance |
Liquidity | Capital tied up in high deposit | Protection of liquidity through annual premiums |
Costs | Interest income possible | Premiums are not refundable |
Administrative burden | Opening and managing a blocked account | Simple conclusion via insurance |
Security for landlords | Direct access to deposited security (with consent) | Protection by insurance company |
Acceptance | Generally accepted | Depends on the landlord's consent |
In commercial leases, the parties are freer in the design of the lease terms. This flexibility also applies to the arrangements for the rent deposit. It is not uncommon for higher deposits or additional collateral to be required. Note: Since there is no legal limit for commercial rent deposits in Switzerland, tenants should carefully check the conditions and negotiate if necessary.
For tenants
Financial planning: Consider whether you can raise the cash for a rent deposit or whether insurance makes more sense.
Negotiations: Try to negotiate the amount of the deposit or the type of security with the landlord.
Compare providers: When it comes to security deposit insurance, it is worth comparing the premiums and conditions of different providers. In Switzerland, there are various providers of insurance solutions such as goCaution, Firstcaution or Swisscaution. In addition, the comparison portal mietkautionschweiz.ch allows for a simple and efficient comparison of all insurance companies.
For landlords
Risk assessment: Check the tenant's credit rating and decide what form of security is appropriate.
Show flexibility: By offering different deposit options, you can potentially appeal to more prospective tenants.
Contract design: Make sure that the rental deposit agreements are clearly stated in the rental agreement.
The tax treatment of the rent deposit can vary depending on the form of the deposit. While interest from the rent deposit account is taxable as income, premiums for rent deposit insurance are deductible as business expenses. Recommendation: Consult a tax advisor to understand the individual tax implications.
In the event of a dispute regarding the rent deposit, the arbitration procedure is provided for under Swiss tenancy law. If there is a disagreement about the repayment of the deposit, the tenant and landlord can consult the relevant arbitration authority.
The choice between a security deposit and security deposit insurance depends on individual needs and financial possibilities. For tenants who want to preserve their liquidity, security deposit insurance offers an attractive alternative. However, landlords should consider the security and acceptance of the respective option.
The rental deposit for office and commercial space in Switzerland is a complex issue that requires careful consideration and planning. By understanding the legal framework and the advantages and disadvantages of each option, both parties can arrive at a solution that is satisfactory for everyone.
Whether it is a security deposit or a security deposit insurance, it is important that the option chosen meets the needs of both parties and is in line with Swiss tenancy law. If there is any uncertainty, it is advisable to seek legal advice and to put all agreements in writing.
Further information:
Swiss Code of Obligations (CO): Link to CO
Tenancy dispute resolution authorities: Information can be found on the websites of the cantonal judicial authorities.
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