Renting in Switzerland – All you need to know

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Renting in Switzerland - All you need to know

In Switzerland, most people rent their apartment or house. The reason is that access to real estate is quite complicated. But renting is not much simpler. If you want to rent in Switzerland, there are many things you need to know. You will be better prepared and better protected if you learn about this subject.

For instance, did you know that rent prices are indexed on a reference interest rate? If the rate goes up, so does your rent. But if the price goes down, you are entitled to a reduction.

Other subtleties are important when you are renting in Switzerland. For instance, there are many things you need to know about giving back your apartment. I am going to cover them in detail.

How to Find a property to rent?

Finding a property to rent in Switzerland is relatively easy. If you are extra select about your choice, it may take you a while. But otherwise, there are enough properties available that you can find someone. And some cities are more filled than others.

There is one exception to that. It is difficult to rent a house in Switzerland. Finding an apartment to rent is straightforward. But finding a house is much more difficult.

For most people, using an online platform will be enough to find the apartment or house they are looking for.

There are three primary online services to find properties to rent:

The one you choose almost does not matter. They are all gathering properties from the other platforms. So you will find almost the same properties on each platform. And often, you will be redirected to another platform to get all the information and pictures.

I am not going to go into how to choose a property. It is a personal thing. Everybody has a different view on which property they want. You should choose an apartment or house that suits your needs and budget.

How To Apply for a Property?

Now that you found a property, you need to visit it. Make sure to ask as many questions as you have to the tenants. Most of the time, the visit is made by the previous tenants themselves, not by the building managers (or the landlord). You also need to make sure to check the details. If you are visiting with the tenants, do not forget to ask how much they are paying. It is important because it may not be the price you found online.

Once you have visited, if you like the property, it is time to apply. In most cases, you can directly give the application details after the visit. In some cases, you will have to send the details to the property managers (or the landlord).

In some cities, you will have to fill an application form. And you will even have to pay to deposit your application. This is the case in Geneva for instance. But in Fribourg, there are no such things.

Since properties are generally given on a first-come, first-served basis, you should visit a house and apply for it as soon as possible. If you are in a market with a lot of competition, you can expect to be refused a few times before you can get the apartment you want.

The exact document you are going to need to provide will depend on the building managers or the landlords. But generally, you will need to provide at least these documents:

  • Your last three salary certificates.
  • A document proving that you are employed.
  • A copy of your passport.
  • A document proving that you are not pursued for unpaid debts (Extrait du registre des poursuites in French). This document can be obtained online in your state office.
  • A document proving that you no criminal record. This document can be obtained at your local police. Not everybody will ask for that document.
  • Information about you, age, marital status, children and pets. This information is not always required but will sometimes be asked of you.

In some cases, you will even have to write a motivation letter. It does not happen often. But in some real estate markets, this is required.

Once you have given all these documents to the landlords or managers, you have to wait until they give you their decision. If you do not get it, then you will have to redo all that again.

If you got it, it is time to go to the next step.

Sign the lease

If you have been accepted, you will have to sign the lease. Only after you sign, will the rental contract be complete.

You should read the lease in its entirety. There may be some weird things. First of all, make sure to check the rent price. The price must be exactly what you agreed on before.

You should also check the period of the lease. Usually, it should be 12 months, renewed for 12 months. And you should probably check when you can exit the lease. Some leases are very constraining.

If you have the price that the previous tenants were paying, you can also compare these two. In Switzerland, landlords are not allowed to increase the rent price without good reason. They could justify a few percents by the increase in the cost of life in Switzerland. But if they did not do any significant improvement work on the property, they cannot increase the price significantly. And some works are simply maintenance work. If they redo the paint, they cannot increase the price.

If you see something that does not make sense contact them, and, if they do not appear honest, do not sign the lease. If you want help with that, I would recommend contacting the ASLOCA. The ASLOCA is an association for tenants. They can be really helpful in mediating bad situations.

After you sign the lease, you still have 90 days to fight some of its points. But if you do not agree with the lease, it is better not to sign it.

Do not fall for Swisscaution

One thing you will have to do after signing the lease is to prepare a deposit. The deposit is generally three months of rent. But this can be more or less than that. In some cases, some landlords without building managers will not even ask you this. But this is a rare case.

Generally, you can put this money into a particular bank account. This bank account will be in your name and the name of the landlord. It will be tied to the lease. You can only get back this money once you leave the apartment. During your stay, it will stay dormant.

If you damage the apartment, the landlords can use this money to cover the damage. If nothing bad happens, you can get back this money once the lease is over.

Now, there is another alternative: Swisscaution. But Swisscaution is a stupid scam. With them, you do not have to deposit a large amount of money in a bank account. Instead, you will pay a yearly based on the rent price. For instance, you may pay 300 CHF per year for a 1300 CHF monthly rent.

And if there is a problem, in the end, they will cover the fees. However, you will then owe them the fees back. So, in the end, you pay for nothing!

If you rent the same apartment for ten years, you will pay 3000 CHF to SwissCaution. And at the end of the lease, you will not get anything back. With a bank account deposit, you will get back your three months of rent at the end!

So, always opt for a bank account rental deposit, never opt for Swisscaution.

How to choose a bank account for a rental deposit?

You will have to choose in which bank you are going to deposit your rental deposit. Almost every bank in Switzerland offers this kind of account. These accounts are great for them since the money will stay untouched for a while.

The first thing you should do is only consider free accounts.  Some banks are costly to offer these kinds of accounts. For instance, at UBS, you will pay 20 CHF to open an account. Given the low-interest rate, you will never get it back.

Then, the second thing you need to look at is the interest rate. Since you are taking a free account, you need to take the account with the highest interest rate. This interest will not be much, but this is better than nothing. For instance, Credit Suisse has a 0% interest rate, Migros has 0.01%, and Cler has 0.025%.

Given the current state of banking in Switzerland, you will not get an excellent interest rate. So getting a free account is the most important.

Handover visit

The next step in your rental adventure is to visit the apartment to check its state. It is an important step. At this point, the previous tenant will have left and cleaned the apartment. At the end of the visit, you will have to sign a handover document about the state of the apartment when you take it.

You should be careful about this. If you see something amiss in the apartment, ask for it to figure on the document. For instance, if the floor is broken or the paint is scraped, it should figure on the document. If there are no lights, make it appear as well.

You should test all the equipment in the house, including faucets, lights and the blinds.

The reason you need to be thorough with this step is that when you are going to leave the apartment, you will do it again. At this point, the state will be compared, and if some defects are new, you will have to pay for them. If you forgot some defects int the first visit, some managers could try to pin them on you.

Usually, they should give you a copy of the handover document. Make sure you keep this well. If you are paperless, make a copy of it and store it safely. You will need it again once you leave the apartment.

Pay your bills

Now, you are done with all the steps: you can enjoy your apartment!

The only thing you need to do is to keep paying your bills. And make sure to keep your apartment in order if you do not want to pay fees for defects when you give it back.

Reduce your Rent – Reference interest rate

In Switzerland, rent prices are indexed on a reference interest rate. If the reference rate goes up, so does your rent. And if the rate goes down, so does your rent! The rate is updated every three months.

However, there is something awful about this system. Rent decreases are not automatic. You need to ask for them. Since many people do not know about it or do not do it, people are paying way too much money. This is really stupid. But we have to live with that.

Obviously, if the reference rate goes up, your rent price will also have to go up. In that case, you can be sure that your owner or building manager will soon send you a letter to let you know of the increase.

Only the rent price is indexed on this reference interest rate. The second part is the charges (heating, water, …). This is not indexed and you cannot get a reduction on that part.

Normally the owner cannot refuse you this reduction. However, there are some exceptions. If the owner can prove the maintenance costs of the building have gone up, it can use that to offset the reduction. And if there were some improvements to the quality (not fixes, real improvements) of life in the property, this could also be used.

Some people are also afraid to get into trouble with the building manager or the owner if they ask with a reduction of rent. But a building manager cannot put you out just because you ask for a reduction of rent. This is something you are entitled to. There is no reason to give them more money than they should get.

Ask for a rent reduction

So, if the reference rate goes down, you need to ask for a reduction of your rent. You are entitled to it! There is no reason not to do it. And even if the rate did not go down recently, you can still ask for a reduction if your rent was set with a higher reference rate.

Many people are eligible for many years of rent reductions. And many people still do not know about that!

The ASLOCA has a great calculator for this case. This calculator will let you know how much reduction you can ask. And it will also directly generate an example letter that you have to sign and send to your landlord or building manager.

You need to remember that you can only ask for a reduction for the next lease exit date. Most leases have two exit dates per year. For instance, our lease lets us leave in March and September. And you need to ask in the delays set by your lease again.

I already did this several times. And each time I was able to get my rent price reduced! This is a great way to save money! And you are entitled to the reduction.

Know your rights

Even though I am not a fan of the Swiss laws for tenants, there are still a few good things. Tenants have rights. And it is useful to know them if you want to be protected.

Abusive rent increase

One good thing is that tenants are protected against abusive rent increases. A landlord cannot increase rent without reason. The tenant has to give you the reason when he wants to increase the rent.

For instance, if the landlord redoes the paint after ten years, it cannot increase the rent. Or if he improves the insulation of the house, that is not a reason either. You need to improve the quality of the property to be able to increase the rent.

The other reason is if the cost of living increases. Then, it is reasonable to increase the rent in accordance. And the same applies if the reference interest rate increases. In these cases, there is not much you can do.

Temporary reductions of rent

Another good thing: tenants are entitled to temporary reductions of rent in some cases:

  • If your landlord is doing construction work on the house, you can ask for some reduction during the construction.
  • If you lose access to some parts of your apartment for some time, you can also ask for a reduction.
  • If you lose access to the bathroom, you can ask for a large reduction
  • If you lose access to the kitchen, you can also ask for a large reduction.

Unfortunately, there are no direct rules as to how much you can get. You will need to research existing cases.

Here are some examples (here in French) I found:

  • Apartment too cold: 20% reduction
  • Dishwasher not working: 3% reduction
  • No elevator on the fourth floor: 10% reduction
  • Noisy restaurant on the floor below: 20% reduction
  • Intrusive construction work in the building: up to 30% reduction

You should not hesitate to ask for a reduction of rent. And if you feel you did not get as much as you deserve, you can contact the ASLOCA to get some help.

Give back your apartment

At some point, you will likely give back your apartment to change.

There are two different options for giving back your apartment:

  1. You give it back at the term of the lease.
  2. You give it back at any other time.

If you give back your apartment at the term of the lease, you have to respect the delays of the lease. If you send your letter on time, you will be able to leave your apartment at the correct time.

However, most lease contracts are terrible. They are all in favor of landlords, not tenants. I think that leases in Switzerland suck! Generally, you will have only two dates during the year when you can leave the apartment. And you will have to send your letter at least three months in advance. So basically, the chances that you can give back your apartment on time are low!

You can still give back your apartment at any time under some conditions. It is what happens most of the time. In that case, you will have to find yourself a new tenant. You are doing that building managers and landlords should be doing. And you are doing their job for free!

You will have to find at least one tenant that is solvent. He should have no debt and should have enough income to rent this apartment. If you find one such tenant and if he signs the lease, you are free to leave your apartment. If the building managers refuse a solvent tenant for other reasons than its solvency, you are also released of your obligations.

Now, if you do not find another tenant, you will have to continue paying your rent until the official term of your lease. It can be a long time, so you need to be careful when you switch to a new apartment! You may have to pay both apartments for several months.

Exit handover visit

Once you have settled on an exit date, you will have to recheck the state of the apartment. You will have to clean the apartment thoroughly. And then, the managers (or the landlord) will visit it with you. If something is broken, you will have to pay for the repairs. If the defect was already there when you visited and it appears in the entry handover document, you are fine.

If you know you broke or damaged something, you should fix it before the visit. That way, you will save time.

Some managers and landlords will try to make you pay for things you did not do. For instance, many will try to make you pay for repainting the apartment. In most cases, this is not justified. The landlords need to do some things. They need to fix everything that is normal wear.

If something is not normal wear, for instance, deep scratches in the floor or walls, you will have to pay it yourself. You can also sometimes fix it yourself if you can. Most of the time, the landlord will send you the bills. Once they are paid, the landlord will free up the rental deposit.

If nothing needs fixing, the landlord must release the rental deposit once the exit handover document is signed.

Conclusion

As you can see, renting in Switzerland is not a simple subject. There are many subjects that are important. If you do your research properly, you will avoid bad situations.

The worst about this system is that many people do not know their rights. As a result, many people are paying a higher price than they should. It is estimated that people are paying several billion too much every year.

So, do not hesitate to ask for a reduction of rent price if you are entitled to one. And be careful about the terms of your lease when you are planning to switch to a new apartment. You do not want to pay for two apartments for several months. Finally, do not even consider Swisscaution!

Do you have any other tips for renting in Switzerland?

Mr. The Poor Swiss

Mr. The Poor Swiss is the author behind thepoorswiss.com. In 2017, he realized that he was falling into the trap of lifestyle inflation. He decided to cut on his expenses and increase his income. This blog is relating his story and findings. In 2019, he is saving more than 50% of his income. He made it a goal to reach Financial Independence. You can send Mr. The Poor Swiss a message here.