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Old 22.01.2021, 13:54
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Rental contract signed but didn't deposit the money

We are a couple that recently arrived in Zurich and we encountered a problem regarding the contract for moving into a new apartment and we need your help in this matter because we donít know how to proceed.
We went to see one of this landlord apartments and applied for it. We didnít get that apartment, but he offered us another one. He sent us the contract to be signed for rental, but without the deposit joint documents. We signed the contract and waited for the deposit documents.

He did not send us the documents for the deposit account until it was too late for us to open it in time so we can have a valid contract until we should move in the new apartment. Also, he suggested over the phone and on the email that we can send the money in his personal account and then he will move them into the deposit joint account after the account is active.

Because of his suspicious behaviour, we decided not to continue with the agreement and not to open the deposit. Did we break the contract and have to pay the rent for a year(the contract was for a year) if we didn't pay the deposit?
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Old 22.01.2021, 14:14
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Re: Rental contract signed but didn't deposit the money

A contract is only broken if the damaged party decides it is, not the one doing the damage.

So the landlord could cancel the contract if you fail to pay the deposit, but you can't since actually it's to your advantage.

It seems common to do what the landlord suggested, but if you're not happy about that then correct action would be just to say you are only going to pay the deposit into a proper account. Then the landlord is on the wrong side of the contract rules and you are safe.

ps. not safe from moving in, paying rent etc, just safe from paying the deposit until the account is available

Last edited by newtoswitz; 22.01.2021 at 14:22. Reason: added ps
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Old 22.01.2021, 14:23
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Re: Rental contract signed but didn't deposit the money

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We signed the contract and waited for the deposit documents.
It's usually like this, it takes some time after contract signature. The landlord contacts a bank and the bank sends a Vereinbarung fŁr mietzinsdpot (Agreement for rent deposit) that you and the landlord must sign. You return this doc by post to landlord, landlord sends to bank, bank opens account and sends you deposit slip, you pay, and some days later you get from the bank a deposit confirmation you show to the landlord. Since all is done by post, it can take several weeks. Totally normal.

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He did not send us the documents for the deposit account until it was too late for us to open it in time so we can have a valid contract until we should move in the new apartment.
What does too late means? Did the landlord refuse to give you the keys after being late with the deposit documents? Because otherwise, you could move in and pay to the proper deposit account once the paperwork was done. Once I rented a studio as 2nd residence and the real estate company took like 6 months to get the deposit account opened, anyway they gave me the keys. So, being late was their problem, not mine.

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Also, he suggested over the phone and on the email that we can send the money in his personal account and then he will move them into the deposit joint account after the account is active.
Well done! No transfers to personal accounts.

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Because of his suspicious behaviour, we decided not to continue with the agreement and not to open the deposit. Did we break the contract and have to pay the rent for a year(the contract was for a year) if we didn't pay the deposit?
What do you mean? Did you simply walked away and rent somewhere else? This doesn't look good, there is a signed contract and a proper deposit account (even if it was late)

Last edited by Axa; 22.01.2021 at 14:36. Reason: typo
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Old 22.01.2021, 14:33
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Re: Rental contract signed but didn't deposit the money

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W He sent us the contract to be signed for rental, but without the deposit joint documents. We signed the contract and waited for the deposit documents.

He did not send us the documents for the deposit account until it was too late for us to open it in time so we can have a valid contract until we should move in the new apartment.
The contract is valid as soon as both parties have signed it.


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It seems common to do what the landlord suggested, but if you're not happy about that then correct action would be just to say you are only going to pay the deposit into a proper account. Then the landlord is on the wrong side of the contract rules and you are safe.
Why? Art. 257e Code of Obligations
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1 Where the tenant of residential or commercial premises furnishes security in the form of cash or negotiable securities, the landlord must deposit it in a bank savings or deposit account in the tenant’s name.

2 In residential leases, the landlord is not entitled to ask for more than three months’ rent by way of security.

3 The bank may release such security only with the consent of both parties or in compliance with a final payment order or final decision of the court. On expiry of one year following the end of the lease, the tenant or lessee may request that the security be returned to him by the bank if no claim has been brought against him by the landlord or lessor.

4 The cantons may enact further provisions.
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Old 22.01.2021, 14:58
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Re: Rental contract signed but didn't deposit the money

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Why?
My bad, I thought the requirement was for the tenant to pay the deposit directly into the protected account.

That would make much more sense from a protection viewpoint, and prevent all the cases we see on here where the landlord takes the money and doesn't deposit it, and the tenant only realises at the end of the contract when the landlord screws them on returning it.
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Old 22.01.2021, 15:03
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Re: Rental contract signed but didn't deposit the money

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A contract is only broken if the damaged party decides it is, not the one doing the damage.

So the landlord could cancel the contract if you fail to pay the deposit, but you can't since actually it's to your advantage.

Braking (breaching) a contract and legally cancelling a contract are two different things.


It could possibly be argued that the contract is not complete until the deposit has been paid (in full) thus there was no contract to breach. Cue all the "if you signed it you take it" responses. But yes this tends to favour the landlord rather than the tenant if the landlord decides to give the apartment to someone else.


Not sure what the OP's intention is. To take the apartment or they've found something else. In any case you wouldn't be liable for the full amount as the landlord would be able to find someone else to take the apartment.
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Old 22.01.2021, 15:53
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Re: Rental contract signed but didn't deposit the money

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Braking (breaching) a contract and legally cancelling a contract are two different things.

It could possibly be argued that the contract is not complete until the deposit has been paid (in full) thus there was no contract to breach. Cue all the "if you signed it you take it" responses. But yes this tends to favour the landlord rather than the tenant if the landlord decides to give the apartment to someone else.

Not sure what the OP's intention is. To take the apartment or they've found something else. In any case you wouldn't be liable for the full amount as the landlord would be able to find someone else to take the apartment.
I guess the largest risk it no being liable for 1 year of rent, but the energy spent contesting a betriebung (debt collection) started out of boredom and pettiness.
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Old 22.01.2021, 17:32
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Re: Rental contract signed but didn't deposit the money

You have two options here.
Go to the bank with the landlord and open the account on the spot. I've done this countless times without problem.

Otherwise, pay the deposit to the landlord, get a receipt and from him in writing that he will pay it to the deposit account, which you both need to sign to open. This is fine and I've also done this. As long as he opens the account in the shortest delay, it's not illegal.

If he doesn't you can report him as it's illegal to hold on to the deposit. Otherwise you just don't pay the last months rent. There is nothing he can do about it since he is in the wrong.
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Old 22.01.2021, 18:09
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Re: Rental contract signed but didn't deposit the money

You can go open it yourself also at UBS. Perhaps only if you are a client - not sure but does not look like it from the site.

https://www.ubs.com/ch/en/private/ac...s-account.html

Signature of landlord is only required for amounts above 10K.

Have done that myself and asked the sublettors of our flats too.

Worked very well.

K
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Old 22.01.2021, 18:21
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Re: Rental contract signed but didn't deposit the money

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That would make much more sense from a protection viewpoint, and prevent all the cases we see on here where the landlord takes the money and doesn't deposit it, and the tenant only realises at the end of the contract when the landlord screws them on returning it.
In those instance the tenants are anyway not aware that the money should go in a special account, in their name. They could be scammed even if the rules were different.

For the others, who know that the money must go in the special account in there own name the risk is minimal: If the money has not been put in the special account simply to not pay the last few rents before the rental is finished or, after unsuccessful demands that the deposit must be paid in to a special account, simply pay some months rent into an escrow account at the rental court.
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Old 23.01.2021, 12:30
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Re: Rental contract signed but didn't deposit the money

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For the others, who know that the money must go in the special account in there own name the risk is minimal: If the money has not been put in the special account simply to not pay the last few rents before the rental is finished or, after unsuccessful demands that the deposit must be paid in to a special account, simply pay some months rent into an escrow account at the rental court.
I've had situations where the timing to get keys to the flat was very short and so the deposit was paid directly to the landlord and then transferred over when the rental deposit account was opened. I also know of situations where the money was never transferred out of a landlord's private account but this was only discovered at the end of the tenancy.

Most tenants trust paying the deposit directly to the landlord when the landlord is a property management company. When it is a private individual, there is more suspicion. I don't really know why because the landlord is completely in the wrong if the money is not placed in the correct account as already posted, the tenant can put this right. Yes, it is a hassle, but often just threatening to do this will force the landlord to correct the situation.

The question to the OP is what is the landlord's position on the situation. This will determine what you need to do. Has the the apartment been rented to someone else and you are off the hook? Have you found another apartment? Were you the first to sign the rental contract and you received it with the landlord's signature already? This is not the norm. Tenant signs first, then the landlord. Did you actually ever receive a rental contract with the landlord's signature?
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Old 23.01.2021, 18:55
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Re: Rental contract signed but didn't deposit the money

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We are a couple that recently arrived in Zurich and we encountered a problem regarding the contract for moving into a new apartment and we need your help in this matter because we don’t know how to proceed.
We went to see one of this landlord apartments and applied for it. We didn’t get that apartment, but he offered us another one. He sent us the contract to be signed for rental, but without the deposit joint documents. We signed the contract and waited for the deposit documents.

He did not send us the documents for the deposit account until it was too late for us to open it in time so we can have a valid contract until we should move in the new apartment. Also, he suggested over the phone and on the email that we can send the money in his personal account and then he will move them into the deposit joint account after the account is active.

Because of his suspicious behaviour, we decided not to continue with the agreement and not to open the deposit. Did we break the contract and have to pay the rent for a year(the contract was for a year) if we didn't pay the deposit?
Depends on what exactly the contract says about your deposit and payment procedures. If it doesn't say that you're paying deposit directly into Mietkautionskonto, then yes, you may very well be the asshole breaking the contract here and on the hook for damages (rent until apartment is rented out to somebody else) regardless if you paid deposit or not.

It's perfectly in line with the law for landlord to ask for deposit to be paid initially into his personal account, nothing's wrong with it per se, especially if time is short. The law merely says that he's got to forward it onto a Mietkautionskonto (you would be able to enforce that through arbitration/court if need be).
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Old 25.01.2021, 14:36
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Re: Rental contract signed but didn't deposit the money

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Because of his suspicious behaviour, we decided not to continue with the agreement and not to open the deposit. Did we break the contract and have to pay the rent for a year(the contract was for a year) if we didn't pay the deposit?
The contract is valid. That you didn't pay the deposit doesn't make it invalid, nor does it matter whether you moved in or not.

You owe the rent as long as the contract runs. You still owe the deposit as well.

Your best option, if you currently rent two apartments, may be to find a follow-on renter who enters into the contract in your stead before it has ended.
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