|  Ramzi Chamat

The future of tenancy law in Switzerland: Perspectives on upcoming changes.

On September 29, 2023, the Swiss Federal Assembly passed a reform of the rental law. This reform introduces significant changes, particularly regarding subletting and the early termination of leases due to a change in ownership. While landlords are welcoming these changes, tenant associations like Asloca have strongly opposed them. In this article, we will explore the key aspects of this rental law reform, its implications for both tenants and landlords, and whether it truly represents a significant shift in the rental landscape.




The recent reform of the Swiss rental law has stirred a considerable debate between landlords and tenant associations. The reform, which passed in September 2023, introduces several modifications that affect subletting and the early termination of leases when the property changes ownership. While these changes have been hailed as a step towards a fairer rental market by some, others argue that they may not be as groundbreaking as they seem. In this article, we will delve into the details of these changes, exploring their potential impacts and whether they truly address the concerns of both landlords and tenants.



I. Subletting: Enhanced Regulations and Restrictions


Subletting has been a topic of contention in the rental market for years. The new rental law reform aims to address some of these concerns by imposing stricter regulations on subletting.


A. Written Consent Requirement


One significant change is that tenants will now be required to obtain written consent from their landlords before subletting their rental units. This written request should include details such as the subtenant's name, contract terms, intended use of the premises, sublease rent, and the sublease duration. If any changes occur during the sublease, the tenant is obligated to inform the landlord promptly.


B. Additional Grounds for Landlord Refusal


The reform introduces two new grounds for landlords to refuse subletting. Firstly, if a tenant fails to provide the necessary information in their request (including the subtenant's name and contract terms), the landlord can reject the subletting. Secondly, subleases exceeding two years in duration can also be refused by the landlord.


C. Broadened Landlord Discretion


One notable change is that landlords will now have more discretion to refuse subletting for reasons not explicitly mentioned in the law. While this may provide landlords with greater flexibility, it also raises questions about the criteria that would justify such refusals. Legal precedents will likely play a crucial role in clarifying the circumstances under which a landlord can refuse subletting, with the expectation that the reasons should be substantial and made in good faith.


D. Lack of Clarity on Response Timelines


The reform does not specify the timeframe within which landlords must respond to subletting requests, nor does it outline the consequences if a landlord fails to provide a response. This lack of clarity may lead to disputes between landlords and tenants in the absence of clear guidelines.


E. Extraordinary Termination Due to Subletting Violations


The new law also introduces a provision for landlords to terminate leases in cases where the subtenant sublets all or part of the property without written consent, provides false information, or fails to inform the landlord of changes related to the subletting request. This termination can occur after a written protest remains unanswered for 30 days.



II. Early Termination of Lease in Case of Ownership Change


A. Transfer of Lease with Property Sale


Currently, when a landlord sells a rented property, the lease automatically transfers to the new owner, including all associated rights and obligations. The new owner can then terminate the lease at the next contractual expiration date or, in certain circumstances, earlier.


B. New Owner's Right to Terminate


Under the reform, the new owner's right to terminate the lease is expanded. They can terminate the lease at the next legal term, without having to adhere to the contractual notice periods. This means that if a property sale occurs, the new owner can terminate the lease more swiftly than before.


C. Requirement of Own Urgent Need


However, this right to early termination is limited to cases where the new owner or their close family members have an urgent and specific need for the rented property. For residential properties, this pertains to the personal need of the new owner or their close family members. In the case of commercial properties, the new owner must intend to operate a business in the rented space.


D. Lengthy Legal Procedures and Lease Extensions


In practice, when a tenant contests the termination in court, the new owner cannot take possession of the property for several months or even years. This is due to the involvement of multiple legal instances, including a conciliation commission, the cantonal first-instance court, the cantonal second-instance court, and the federal court. Furthermore, tenants often secure lease extensions during legal disputes.


E. Ineffectiveness of the Reform


The initial proposal aimed to streamline the legal process for early lease terminations based on the owner's need and to relax the criteria applied by the courts. However, after a consultation period, the Federal Assembly decided to eliminate the notion of "urgent need." The revised law now allows the new owner to terminate the lease based on an "important and current need" determined through objective evaluation, without specifying these terms.





In conclusion, the recent Swiss rental law reform has brought about changes that impact both landlords and tenants. While it introduces stricter regulations for subletting and broadens the grounds for early lease termination by new property owners, it remains to be seen how these changes will play out in practice.


The reform may not be the radical shift that some expected. The removal of the "urgent need" requirement may not significantly ease the process of early lease termination for new property owners. Disputes are likely to continue, and legal precedents will be crucial in defining the scope of landlords' and tenants' rights.


As the reform takes effect, it will be essential for all stakeholders, including landlords, tenants, and legal professionals, to closely monitor its implementation and any resulting legal developments to ensure a fair and balanced rental market in Switzerland.

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