Hi. We have a subletter coming in at the end of the week. He said he wanted to use Swisscaution instead of a deposit and we said okay. But now he has taken an insurance policy that he says does instead but it only covers contents. I think he thinks that this and his PLI will suffice. But if that did suffice why would any of us need to pay bonds?

Am I correct in thinking we should insist on Swisscaution or similar as well? The sublet is fully furnished for 5 months.

Signed: confused.

Crap, insurance doesn't cover it. He needs to put either a bond in place or a deposit in a blocked account.

If he doesn't, you need to be sure you can take the hit from the landlord on his behalf.

No bond/deposit, no rental

Thank you. I was worried I was being mean.

Alarm bells ring if he wants to use Swisscaution instead of paying a cash bond...that says he possibly doesn't have the cash in the first place...

Even more reason to ask for either a proper cash bond or Swisscaution (I wonder if Swisscaution refused him?)....

Be very cautious...it's a big risk...

He has paid his rent mostly upfront - 4/5 months, he checks out in terms of his background, employment, previous sublet which is just ending. He has Swisscaution now for the place he's in. I think he will organise it without an issue, I think he just doesn't understand what it's for. A lot of people think that Swisscaution is simply a protection against not paying the rent because it's rather misleadingly (at least in English) referred to on their site as a rental guarantee. I just wanted to check that it was necessary. I think in any case that the regie is expecting a guarantee, so I wouldn't want to spoil that.

So you made him pay for 3 additional months in advance - it sounds like you've already got your bond (3x rent) in this way. Why are you asking him to pay even more? I don't think you're allowed to do that by law.

If it's sublet, then you're the regie to your subletter and you're free to determine what guarantees you need from him.

Libabilty insurance only kicks in for damages, it doesn't cover unpaid rents. In most cantons it's not mandatory, so you cannot count on tenant having one, unless you insisted on it in the contract and verified that the tenant actually got it.

Bond (deposit) covers both damanges and, more importantly, unpaid rents. If tenant stops paying, it will take at a minimum 2-3 months before you can kick him out legally. That's where the deposit covers you. With 3x rent as a deposit you hopefully would have the missing rents covered in most cases without having to take further legal actions against the tenant and risking that he might go bankrupt.

So, basically you are saying that PLI and some contents insurance is sufficient, then? Given that the rent is paid up front in full. Paying in advance was the subletter's idea, but I do have to say it made us feel better about agreeing as we will be away for the duration and have no possibility of keeping tabs on what is happening here.

No bond, no key it's really quite simple

Initially we had agreed that the first and last months would be paid, using a subletting agreement which he suggested using. He offered, however, to pay more in advance to make us feel better about things and because he really wanted our place, I think, since we'll be away and would have no way of dealing with issues. It did make us feel better

I don't really see what that's got to do with the issue of damages and how they would be sorted. Happiness for me in Geneva is having a week without a dispute with our regie who is infamous in ASLOCA as the worst around.

In fact, we went to some expense to change our travel dates to fit in with when he wanted the place, and we are also letting him stay a week longer on the contract without having mentioned paying for that, so it's not like we're being ripoff merchants.

I should have mentioned that paragraph 4 of the permission we got from the regie says:

"Les conditions de sous-location devront correspondre aux conditions du contrat de bail principal"

The conditions of the sublet must be the same the conditions of the main lease. My feeling is that this suggests a 3 month bond because that's what we have. Is that what others would think?

The deposit (bond) is there to not only cover unpaid rent, but any possible damage caused to the property that's not covered by the renters insurance.

You'll probably be fine, and the sib-letter paying the full rent in advance show's his willingness to stay the rental term, but if you're really concerned then put your mind at rest and insist on either a smallish deposit (doesn't have to be three months, could be a couple of weeks rent if you're happy with that) or Swisscaution. Just explain your concerns to him, if he's used Swisscaution before then it shouldn't be a problem for him to get a new contract.
He's possibly concerned about their fees, which I believe run Jan-Dec, so going over into a new year means paying the annual fee twice.

If he does have the insurance (don't forget to check), then yeah, the deposit mainly covers the risk of unpaid rents.

But note that insurance companies can be very stubborn and refuse to cover or only cover partially the damages and it can take you a lot of energy to argue with them about damages to get paid. A deposit would give you better chances to get paid.

Best of all would to go by-the-book and do both: put the tenant's 3x rent money that he's already willing to pay into the special deposit account in his name and get him to get an insurance. It's not hard to open this special account: just show the rental contract at the bank. You'd probably need to modify it a bit so that it clearly specifies that this money was a deposit and you will transfer it back to the tenant onto this account.

I wouldn't go with Swisscaution, they're nothing more than a loan shark with rip off interest rates. The loan gets created when you claim anything against a tenant with them. If tenant has cash, better to go with a traditional model.

I would think they mostly care about you not making too much profit with the sublet. If you're doubt, just ask them or show them the sublet contract you're signing.

We did show them the sublet contract, and the quote I provided is from their agreement with us that the sublet could go ahead. That is to say, they okayed it as long as.... various points including the one about the conditions being the same. I did wonder if the best way to see how the land lies is to try calling them tomorrow and ask for clarification on this point, so yes, I can do that and report back here as to the consequences.

You already know the regie is difficult.

The regie don't care about the bond, they have YOUR bond so any damage or non rental payment will come from this.

If your sub tenant does not provide a bond, then it is you on the hook, basically you are taking a risk on the sub tenant being a good chap, paying on time and causing no damage.

This is the risk you are running; is it worth it, can you afford it ?

No, I can't! But before deciding what to do, I'm going to have a sleepless night worrying about it and then call the regie in the morning to see what they think. I'd like to be fully informed. Definitely we will work out something with the subletter tomorrow and I will report what happens.

If the tenant has 3x rent in spare cash that he's willing to pay, then you can just do it the usual way with the bond in a special bank account. It's not worth having a sleepless night over this. Overhead bureaucracy is minimal, just go to the bank with the sublet contract to open the account for tenant.

READ THIS SLOWLY......

The Regie DO NOT CARE ONE IOTA, they have YOUR bond/deposit and they won't hestiate to deduct from it for damages or non payment

It is not legal to sublet without the landlord's approval. If you do, the landlord has the right to terminate your rental contract immediately. I'd think you would want to avoid making your rental contact vulnerable in that way.

Your landlord has made his permission subject to the express condition that the sublet is made with the same conditions as the main rental contract. This is reasonable.

So what's to debate or lose sleep over? Just make the sublet with the same conditions. If your deposit (bond) with your landlord is a certain number of month's rent, paid into a blocked "tenant's rental deposit" account at a bank, then follow exactly the same procedure. If your bond to your landlord runs through Swisscaution, then do that.

"same conditions" is a too blurry term legally. Should the bank account number to where the rent payment goes be considered part of those conditions or not? Or the part where it talks about the contract being concluded for indefinite term with N months cancellation notice?

Probably with that clause the landlord merely means: same rent, same usage (residential, industrial, etc), same restrictions (headcount, animal policy, etc).

If you want to sure, just email the sublet contract to regie and get a written OK back from him. He cannot normally say no anyway if the above things are the same, and it's allowed to ask a bit extra for furnishings or services (e.g. wifi).

If you don't get either a standard 3-month deposit, or a rent bond guarantee from a provider like Swisscaution or AXA, then you'll be back here in half a year complaining about the unpaid damages. It's not worth it.