by Malcolm Curtis | swissinfo.ch | December 21, 2011
The high cost of renting accommodation or business premises in Switzerland is made even more onerous by the hefty damage deposits required. Avoiding such daunting payments up front is possible through a service offered by specialised insurance firms, whose business continues to grow even as the Swiss economy slows down.
Tenants’ organisations, while recognising the benefit, warn that a high price is attached to such services. Landlords in large Swiss cities typically demand three months’ rent as security from tenants in apartments and other forms of housing.
Small enterprises face steeper deposits, amounting in some cases to six or even 12 months’ rent for commercial leases. Insurance companies provide a guarantee that frees up this money, which would otherwise be blocked in a bank account, in return for an annual premium, an initiation fee and administrative costs.
With Swiss rents still rising, demand for such insurance is increasing, says Sophie Onkelinx, marketing and communications director for Swisscaution, the leading rental deposit insurance company in Switzerland.
“We are seeing more people in difficulties,” Onkelinx told swissinfo.ch.
“The rent for apartments is higher than it was two years ago, so for people moving into a new one, they face a much higher deposit.”
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