Can the landlord withhold the rental deposit due to an outstanding utility bill?

Withholding the rental deposit

Yes, the landlord may withhold an appropriate portion of the rental deposit if an additional payment from the utility bill is to be expected. However, he may not block the entire rental deposit if the expected back payment amount is significantly lower. The rule of thumb in 2026 is: A withholding of around 100 to 500 CHF (depending on previous experience) is usually permitted. The rest of the rental deposit must be released immediately after the apartment has been handed over without defects.

The legal nature of the rental deposit: A fiduciary relationship

In order to understand why a landlord cannot simply dispose of the rental deposit as he sees fit, you have to consider the legal structure. According to Art. 257e of the Code of Obligations (OR), the rental deposit must be in a savings account in the tenant's name. The landlord only has a right of co-disposal, no ownership of this money.

After termination of the rental agreement, the landlord is obliged to release the account as soon as there are no more claims arising from the rental agreement. However, since the utility bill can often only be prepared months after moving out — usually tied to the billing periods of energy suppliers — a time vacuum is created here. However, this waiting for settlement does not justify a lump sum withholding of the entire sum, which often comprises three months' rent.

The principle of proportionality

In Swiss legal practice in 2026, proportionality is the decisive criterion. If a tenant has received refunds for service charges for years or the back payments have always been in the range of 50 CHF, a withholding of several thousand francs is abusive.

The landlord must substantiate his claim. This means that, based on previous years' statements and the current development of energy prices, he should estimate how high a potential additional claim could be. Only this estimated amount may remain “blocked” on the deposit account. The excess amount must be made available to the tenant immediately. If the landlord stubbornly refuses, the tenant can call the conciliation authority or request partial approval from the bank, provided that the facts are clear.

The billing periods and the test of patience

A common point of contention is the time that a landlord can take to prepare the statement. Many tenant expect to be billed immediately on the day they move out. However, this is often technically impossible.

Utility bills usually follow a fixed cycle, for example from July 1 to June 30 of the following year. If a tenant moves out in September, the final statement can only be prepared when the period ends next summer and all invoices from the works have been received. After the end of the period, the landlord also has a reasonable processing period (usually two to three months). In extreme cases, this can mean that a tenant has to wait almost a year for the final statement and thus for the last part of their rental deposit. This period is legally covered as long as the landlord does not culpably delay.

The 12-month deadline: The emergency brake for tenant

In the event that a landlord remains inactive and neither releases the rental deposit nor prepares a statement or takes legal action, the Act provides for a protective provision in Art. 257e para. 3 OR.

If a year has passed since the termination of the tenancy and the landlord has not made any legal claim against the tenant (such as a debt collection or a lawsuit), the bank must pay the rental deposit, including interest, to the tenant — solely at the tenant's request. In this case, the bank no longer requires the signature of the landlord. In 2026, this regulation is the most important tool for tenant to get their money without bureaucratic hurdles after a long waiting period.

Strategies for smooth processing

To avoid a dispute over the withholding in the first place, proactive communication is recommended in 2026. Both parties have an interest in a clear solution.

When moving out, tenant can suggest that the expected additional payment amount be offset directly against the rental deposit or that this amount be transferred separately if the remaining rental deposit is released immediately. A written agreement in the housing acceptance report, which states exactly what amount will be withheld for service charges and when the rest will be paid out, provides legal clarity.

landlord, in turn, should explain transparently how they get the amount of the withholding. A reference to increased district heating costs or higher electricity tariffs in 2026 is accepted by most conciliation authorities as a legitimate reason for a moderate withholding. The aim should always be partial approval by mutual agreement in order to avoid lengthy proceedings before the conciliation authority.

Special feature: Flat rate service charges

It is important to distinguish whether an advance payment or a lump sum was agreed in the rental agreement. In the case of a lump sum, the issue of withholding is void. Here, the tenant pays a fixed amount, which covers all costs. There is no subsequent settlement and therefore no reason to withhold parts of the rental deposit for future claims. If parts of the rental deposit are nevertheless blocked, this is inadmissible in the case of a lump sum agreement, provided that there is no other damage to the apartment.

Conclusion: Proportionality beats blanket freeze

Can the landlord withhold the rental deposit? Only in part and only to the extent that is objectively necessary to cover the expected service charges. A total deposit freeze due to an outstanding heating bill is not provided for in Swiss tenancy law in 2026 and can be appealed by the tenant.

In summary, it can be stated that the rental deposit serves as security, not as a means of pressure. Fair partial approval immediately after moving out is the correct legal process. Anyone who knows the 12-month period as a tenant and bills transparently as a landlord maintains social peace and avoids unnecessary consequences of costs. Clean tenant due diligence starts with the conclusion of the rental agreement by choosing the right type of additional costs and ends with clear logging when moving out.

glossary

• Art. 257e OR: The central legal provision in the Code of Obligations which regulates the handling of tenant autioines.
• Payment on account: Monthly advance payment on service charges, which is settled precisely later.
• Arbitration Board: The first instance in rental disputes, which tries to find an amicable settlement without a lawsuit.
• Retention law: The right to withhold a thing (or money) until a claim has been settled — in the case of a rental deposit, severely limited by proportionality.
• Tenant due diligence: The systematic review of one's own rights and obligations in order to avoid financial disadvantages when moving to residence.