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Right so I'll try to keep most of my frustration out of this question ;)

I purchased a bank draft to pay for a vacation rental - the agreement was cash on arrival, but as I didn't have access to EUR on short notice and didn't want to be bothered with figuring out getting large amounts of cash on my first day in a foreign country this seemed like the next best thing. I showed up at my rental place, gave the draft to the landlord, everyone was happy. Unfortunately the landlord lost the document before cashing it, and it is presumed to be somewhere in his house (or possibly recycled...).

I've done my research and my bank tells me that they can refund me for the draft, minus a relatively small fee which the landlord has agreed to deduct from my balance owing for the rest of my stay. Vexingly, the draft has no expiration date and the form I need to sign to get my refund essentially states that if the draft is ever found and cashed, I will be (re-)charged for the amount.

There aren't any other indications that the landlord is trying to cheat me here, and if it comes to it I could come to terms with just signing the form and accepting the risk, but I'd rather have some recourse if possible. The only DIY solution I've managed to come up with is to ask them to go purchase a draft in my name for the same amount, hand it to me, sign a similar form to get a refund, and I'll promise never to cash it, which basically puts everyone on equal footing. However, this is not free or friendly, and given that being on good terms with my host will make the rest of my stay more enjoyable, and that really he seems very nice and I'd rather not push for that sort of solution, I'm hoping to come up with something else.

Does anyone know of something I could get the payee to sign that would hopefully give me some recourse if the draft was ever cashed? I could just draft something myself I suppose, but some kind of recognized form would probably be better. If it's relevant, I am Canadian (as is my bank) and the payee is German (as is his bank). The draft is worth 1100EUR, so anything that involves me spending any substantial fraction of that on e.g. a lawyer/notary isn't worth it.

I'm staying at the same place for another month, and getting the indemnity form signed, mailed back to Canada and processed will take probably a couple of weeks, so I have a bit of time to work with. I also still owe the landlord for the last month of my stay, due on the last day, so I'm not yet "backed into a corner", so to speak.

FWIW, if you ever hand someone a bank draft, tell them "consider this cash, don't lose it". Might save you some trouble...

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  • That's odd. Bank drafts in US dollars are cancellable, just like normal checks. I put a deposit on a house once and, when it came time for closing, the buyer's agent had to admit both to me and the buyer that they'd lost that check. The agent had been hoping that the check would turn up. The bank was very good about canceling the original bank draft and issuing a new one.
    – Peter K.
    Commented May 18, 2016 at 21:19
  • This Investopedia page confirms that it can be possible to cancel a bank draft if it's "irretrievable by either himself or the seller". However, that doesn't prevent the problem if the original payee does find the original and (presumably fraudulently) tries to cash it. Because of it's "like cash" nature, it is likely to be honoured before it having been cancelled is noticed.
    – TripeHound
    Commented Jul 23, 2019 at 8:08
  • As someone who worked as a bank teller, "Good as cash" is not true of bank drafts unless they're written to 'Cash' or 'Bearer.' Bank drafts are better than cash in that they are more secure, and worse in that the payee can't just hand off the draft to someone else to satisfy their own debts. Commented Apr 14, 2021 at 14:38

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Having written statements attesting to the fact that the bank draft was lost, and that if found the payee promises to return the physical copy thereof is about the best you can do. As you note, there's no physical barrier to the fellow finding and depositing it, sucker-punching you in the checking account to the tune of 1100EUR.

HOWEVER:

If he's signed documents attesting to the fact that he lost it, and he then turns around and deposits it, that's almost assuredly a crime (theft/fraud). Mind you, you'll have to report the crime to a German police department and may or may not see your 1100EUR back, but a signed affidavit claiming to have lost the thing is pretty damning in a court of law, and it's incredibly doubtful that the penalties that attach to such an act are worth the 1100EUR to the payee.

If anyone but the named payee cashes it, you can report that as fraud to the issuing bank and they have ways of pursuing the matter from there.

Nothing is 100% sure, but you are protected by the deterrent effect of criminal laws.

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