Finding the right tenant: applicant screening, creditworthiness and how to avoid rent loss

Why selection decides everything

A rental property forgives almost any mistake. The wrong tenant it does not forgive. For as long as the tenancy runs you, as the owner, are firmly bound, and for good reason, because tenancy law protects the home as the centre of someone's life. If the choice is wrong, you can only undo that bond slowly, formally and with effort.

That is why all the diligence shifts forward, into the selection. An hour spent reviewing a dossier costs you far less time and money than a month of non-payment with the reminder process behind it and, in the end, perhaps eviction. In our own room operation a simple rule applies: better to advertise a week longer than to be in dispute three months later. That is not distrust of applicants. It is respect for the fact that a tenancy is a long commitment, for both sides.

The application form: what belongs on it, and what does not

The registration or application form is your most important tool, and at the same time the place where most landlords go too far in data-protection terms. The guiding question for every single line is: does this detail relate to the conclusion of the tenancy agreement?

What matters is the staged approach the competent supervisory authority expressly requires: the form that many applicants fill in should contain only the basic details. The full supporting documents follow only from the few candidates who are seriously in contention (FDPIC factsheet on rental application forms). It is disproportionate to demand all documents from a large number of applicants up front.

Stage one covers the details with a clear contractual link: identity and contact, approximate income, number of people in the household, pending debt-collection proceedings, a copy of the debt register extract, vehicles because of parking, pets within the scope of the house rules. Anything beyond that without a contractual link has no place on the form.

Since the revised Data Protection Act (revDSG, in force since September 2023) this is not just good form. Data minimisation and purpose limitation apply: the form must be limited to the personal data strictly necessary for letting (HEV data-protection factsheet, revDSG). An overloaded template form from an old folder is a liability trap today. Check your form line by line and delete anything you cannot justify.

The three pillars of the creditworthiness check

Pillar one: the debt register extract. It is the most common way to check ability to pay (newhome). The date matters. An extract that is already several months old does not show today's position and tells you little. It is permissible to ask about pending debt-collection proceedings over the past two years and about certificates of loss; the register extract itself discloses entries for five years (Art. 8a DEBA). Important: not every entry is automatically a reason to exclude. A disputed or long-since-settled proceeding deserves to be placed in context in conversation.

Pillar two: proof of income. Common in practice are the last three pay slips, for pensioners the pension statement, for the self-employed the tax assessment (newhome, Tenants' Association). That is a rule of thumb from practice, not a fixed legal norm. Ask only for as many documents as you genuinely need to form a judgement. The applicant is not obliged to disclose everything to you. But anyone who shows little lowers their chances, because otherwise you cannot assess affordability.

Pillar three: the reference from the previous landlord. It is often the most honest source, because it comes from someone who dealt with this tenant over months. But this is exactly where a legal trap lurks: you may obtain references only from the people the applicant has named themselves, and only to confirm the details given (Tenants' Association). Researching on your own initiative with a former landlord the applicant did not name is not permissible.

For affordability, the rule of thumb widely used in Switzerland applies: the rent should not exceed around a third of income (rule of thumb, newhome). Treat that as orientation, not as law. With lower income, assets, an advance payment or an increased deposit can establish affordability. Rigid arithmetic otherwise excludes good tenants.

The right moment: do not ask too early

A mistake that scares off good applicants and needlessly floods you with data: demanding everything at once. That is exactly what the staged model prohibits. The application form should contain only the basic details and at most a copy of the debt register extract. The original extract, the salary statement and the ID copy you may demand only from the person with whom the contract is actually to be concluded (FDPIC factsheet on rental application forms). References lie in between: you may obtain them from candidates seriously in contention, but only as an expressly voluntary detail and only to confirm the form.

This has two advantages. First, you treat the data sparingly, entirely in the spirit of the revDSG. You collect sensitive documents only from a few serious candidates, not from twenty interested parties who only drop by briefly. Second, you come across as professional rather than distrustful. A staggered process shows the good applicant that they are dealing with a serious landlord. And good applicants who have several acceptances in prospect often choose the management that presents itself professionally.

Checking authenticity: when the dossier looks too smooth

Documents can be forged, and it does happen (newhome, BaZ). A debt register extract is not a forgery-proof document. If a dossier looks conspicuously smooth but the extract does not look quite consistent, you have three serious routes:

• Verify authenticity directly with the issuing debt-collection office. That is the most direct route and costs only a phone call.
• Request a digital creditworthiness certificate, for instance from CreditTrust, which is harder to manipulate than a PDF.
• Obtain a commercial credit report, for instance via CRIF.

This is not blanket suspicion. It is healthy scepticism precisely where something in the dossier does not add up. Anyone who pushes under pressure for an acceptance while "submitting the fresh extract later" earns a second look.

Red flags and green signals from practice

The following patterns are experience from our own operation, not statistics. But they repeat year after year.

No single signal decides. But when the red flags pile up, patience is cheaper than regret.

What you may ask and what you may not

This distinction decides whether your selection is legally clean. The guiding principle: every question and every piece of information must relate to the conclusion of the tenancy agreement (FDPIC factsheet, Tenants' Association). Anything without that link is off limits.

One point deserves special attention. With an impermissible question, for instance about membership of the Tenants' Association, the applicant has a recognised right to a white lie. They may answer falsely without it harming them later. But this right applies only to impermissible questions. With permissible questions, for instance about income or debt-collection proceedings, false statements are not covered and can jeopardise the tenancy in a worst case.

The applicant screening checklist

Before accepting, I go through this list step by step. It is deliberately short so that it actually gets used, and it follows the two-stage procedure.

When every point is in place, the acceptance is no longer a hope but a decision.

More on this in the related guide: How a well-maintained applicant pool prevents vacancy

Securing against rent loss and reacting correctly

Despite careful screening a residual risk remains. For that there are two levels: prevent and react.

Prevent. The deposit belongs in a blocked account in the tenant's name (Art. 257e CO). That is mandatory. It is at the same time your first security if something does go wrong. Together with careful screening it reduces your default risk, entirely without dramatised "rent nomad" statistics.

React. If the rent fails to arrive, the path is clearly regulated and must be followed to the letter. First the written reminder setting a payment deadline of at least 30 days and the express threat of termination (Art. 257d CO). If the deadline passes unused, extraordinary termination for default is possible, for apartments mandatorily with the officially approved form and to the end of a month. In hardship cases, eviction follows via the conciliation authority. What is decisive is the form: anyone who does not set the deadline and the threat correctly loses in court, even when they are in the right.

This is exactly where a management firm takes the form risk off your hands. It knows the deadlines, conducts the correspondence routinely and drafts the termination in the formally correct way. A single procedural error can otherwise cost you the entire proceedings.