I hear you. And that's another landlord who won't rent to foreigners! And the landlords whom he is friends with and so on. Communities are tight here.

So, it's not just his reputation at stake it's the reputation of a group of people - auslanders, expats, you and me.

Unlike you, there ae people here who believe that having enjoyed their time in Switzerland they have a responsibility to preserve the acceptance of foreigners by the locals and that it would be very selfish to act in a way that disadvantages their fellow expats.

As far as I read in the OP, the friend recovered the lost deposit money from the insurance company.

So if their worst fear does come true and the landlord eats up all the deposit with real or made up repairs then as long as the insurance company has contact details then the money will eventually be returned.

One thing I will say about last year (actually summer of 2008) is that the price of oil was at it's highest and there will almost certainly be additional nebenkost.

One last thing. Maybe the OP might want to have the option of returning to CH and rent another apartment!