SWITZERLAND Law and Practice Contributed by: Francis Nordmann, Johannes Bürgi, Christian Eichenberger and André Kuhn, Walder Wyss Ltd
1. General 1.1 Main Sources of Law
• freehold; • leasehold; • co-ownership; and • storey-ownership rights.
The main sources of real estate law in Switzer - land are the Swiss Civil Code and the Swiss Code of Obligations. 1.2 Main Market Trends and Deals Real estate in Switzerland has come to the end of its current cycle, with prices declining in some market segments for the first time in many years. Accordingly, as there seem to be some doubts in the market as to the correct price level, the transaction volume started to decrease in the first half of 2023, and not all transactions could successfully be closed. However, there were still several interesting transactions in Switzerland and, compared to other European countries, there was no credit crunch so financing is still available on a large scale. Interest rates have already started to decline, which has boosted the transaction market. Some proptech companies are gaining substan - tial market shares, and new technologies will certainly impact the market. Alternatives to tra - ditional bank financing seem to have maintained their market shares, but did not grow in 2023. 1.3 Proposals for Reform There are currently no planned reforms that might affect real estate in Switzerland on a fed - eral level, but it became obvious that ESG will have a significant impact on real estate in the coming years. 2. Sale and Purchase 2.1 Categories of Property Rights The categories of property rights that can be acquired are:
2.2 Laws Applicable to Transfer of Title Transfer of title is primarily regulated by the Swiss Civil Code and the Federal Ordinance of Land Registry. The transfer of residential real estate to any foreign person is generally restrict - ed, according to the Federal Law on the Acquisi - tion of Real Estate by Persons Abroad (the Lex Koller). Tax issues also have to be considered, although these differ from canton to canton. 2.3 Effecting Lawful and Proper Transfer of Title The transfer of real estate is registered at the competent land registry. Any buyer of real estate acting in good faith is protected by the infor - mation contained in the land registry, so no title insurance is required in Switzerland. The COVID-19 pandemic did not change anything with respect to such procedures and regulatory requirements. 2.4 Real Estate Due Diligence As registration is conclusive, legal due diligence involves analysing the land register extract and its supporting documents, which shows all rel - evant property information. In addition, any existing leases must be examined, since these are transferred to the buyer as the new land- lord upon the purchase of the property. Another aspect of due diligence relates to environmental law. In addition to legal due diligence, prudent buy - ers also perform tax, technical and financial due diligence. If a foreign person buys property that includes real estate that is not commercial property or provides for relevant land reserves,
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