SWITZERLAND Law and Practice Contributed by: Francis Nordmann, Johannes Bürgi, Christian Eichenberger, André Kuhn and Sabrina Kunz, Walder Wyss Ltd
6.7 Payment of VAT Basically, pursuant to Article 21 paragraph 2 No 21 of the Swiss VAT Law, real estate rent is not subject to VAT (with certain exceptions). However, for commer - cial leases, the landlord may opt for the VAT taxation of the rent. 6.8 Costs Payable by a Tenant at the Start of a Lease Typically, the lease agreement includes an obligation for the tenant to provide security for the payment of the rent before the handover of the leased premises (rent deposit, bank guarantee). If the tenant carries out the fit-out, it must obviously bear such costs, unless the landlord voluntarily contributes to such tenant modification costs. 6.9 Payment of Maintenance and Repair Maintenance and repair costs for a building and its surroundings (landscaping) are included in the ancil - lary costs to be paid by the tenant. The costs related to the common areas are allocated to each tenant separately (typically based on its share of the leased premises). 6.10 Payment of Utilities and Telecommunications Costs and charges arising solely from the business operations of the tenant are typically borne by the ten - ant, even if invoiced to the landlord. The costs related to the common services and infrastructure are allo - cated to each tenant separately (typically based on the share of its leased premises). 6.11 Payment of Property Taxes Typically, landlords are responsible for real estate taxes relating to rental property, unless such burden is contractually shifted to the tenant. 6.12 Insurance Issues The owner must insure a building and pay such costs; insurance costs must not be included in the ancillary costs. 6.13 Restrictions on the Use of Real Estate Basically, the parties are free to agree on limitations in relation to the use of leased premises; they can
even agree on an obligation to use – eg, for tenants in shopping facilities. A sublease by the tenant is subject to the landlord’s approval, but such approval may only be withheld if: • the tenant refuses to disclose the terms of the sublease; • the terms of the sublease are abusive; or • the sublease has major disadvantages for the landlord. 6.14 Tenant’s Ability to Alter and Improve Real Estate If a tenant wants to alter or improve the rented prop - erty, the landlord’s written permission is required. The landlord’s consent may be subject to the obligation of the tenant to remove its alterations at the end of the lease and to waive any rights to be compensated for Basically, Swiss tenancy law differentiates between commercial and residential leases only. Certain man - datory provisions apply only to residential leases. 6.16 Effect of the Tenant’s Insolvency In the case of a tenant’s insolvency, all rent receiva - bles due become assets in bankruptcy. However, the lease does not end automatically: the landlord can request security for future rents. If security is not pro - vided within a grace period, the landlord is entitled to give extraordinary notice and immediately terminate the lease contract. 6.17 Right to Occupy After Termination or Expiry of a Lease Once a lease is terminated, the tenant has no right to further occupy the leased premises. However, the ten - ant may request the extension of the lease within 30 days of the termination by the landlord or two months before the end of the fixed lease term, where termina - tion of the lease would cause a degree of hardship for the tenant or their family, which cannot be justified by the interests of the landlord. the added value of such works. 6.15 Specific Regulations Due to a tenant’s mandatory right to claim an exten - sion of the lease, a landlord’s rights in relation to legal
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