SWITZERLAND Law and Practice Contributed by: Francis Nordmann, Johannes Bürgi, Christian Eichenberger and André Kuhn, Walder Wyss Ltd
2.6 Important Areas of Law for Investors Contract law, property law, building law, lease law and environmental law are the most impor - tant areas of law for an investor to consider when purchasing real estate. 2.7 Soil Pollution or Environmental Contamination Basically, the buyer of a real estate asset is responsible for soil pollution or the environmen - tal contamination of a property even if they did not cause the pollution or contamination, since the legal owner of the property is partly liable for contamination of the real estate, even if con - tamination took place pre-ownership. Moreover, a landlord can be held responsible for pollution caused by its tenant. 2.8 Permitted Uses of Real Estate Under Zoning or Planning Law Based on the applicable building law, the buyer usually has some certainty regarding the permit - ted uses of a property. In case of any uncertainty, the issue can be discussed with the competent authority, which can also impose specific rules for a property or area. 2.9 Condemnation, Expropriation or Compulsory Purchase Governmental taking of land, condemnation, expropriation and compulsory purchase are possible. The proceedings vary, depending on whether the expropriation is based on federal or cantonal law. However, the landlord has con - stitutional rights under all relevant proceedings, and is usually fully compensated. 2.10 Taxes Applicable to a Transaction In most cantons, cantonal and/or municipal real estate transfer taxes apply to the transfer of real estate. Generally, the buyer pays the tax, but the seller is jointly and severally liable for payment.
it must be verified that there is no infringement of the Lex Koller. This type of purchase can be deemed void, since the Lex Koller restricts for - eign persons from buying residential and other non-commercial real estate in Switzerland. Financing transactions should be examined on a case-by-case basis. 2.5 Typical Representations and Warranties The warranties typically given by a seller within a share deal include corporate warranties relating to the correct organisation and valid existence of the company, accurate correct presentation of the financial statements and title to shares. Other important warranties relate to the accu - racy of rent rolls, and the due diligence informa - tion being accurate, complete and up to date. Moreover, specific tax representations are usu - ally contained in the purchase agreement. In both asset and share deals, the seller does not usually provide any warranty as to the substance of the building. The seller’s other representations are often qualified by the seller’s knowledge. Due to COVID-19, a new representation relating to waivers of rent claims in the past was typically included in real estate transactions relating to commercial premises. In share deals, most of the seller’s warranties are often capped at a certain amount – eg, 10% of the asset’s price. However, such cap normally does not apply to the seller’s title in the shares. In case of any misrepresentation, the seller is liable to compensate the buyer for any damage incurred. In share deals, part of the purchase price is often held in escrow for a limited period of time in order to protect the buyer. Representation and warranty insurance is very unusual in real estate transactions.
909 CHAMBERS.COM
Powered by FlippingBook