SWITZERLAND Law and Practice Contributed by: Francis Nordmann, Johannes Bürgi, Christian Eichenberger and André Kuhn, Walder Wyss Ltd
6.3 Regulation of Rents or Lease Terms Swiss tenancy law contains various mandatory provisions (typically in favour of the tenants). Excessive rents are prohibited, and tenants have the right to challenge them in court as being abusive. 6.4 Typical Terms of a Lease Typically, the lease term is not below five years (due to the requirement of a minimum term of five years for the rent to be subject to indexa - tion). Frequently, the parties agree on the ten - ant’s options to extend the lease. Lease terms may also be concluded for an indefinite period. With the exception of minor repair works, all maintenance and repair costs must be borne by the landlord. Double-net and triple-net struc - tures are valid, subject to certain conditions (eg, the tenant must confirm that the transfer of maintenance and repair obligations to them has been sufficiently reflected in the calculation of the rent). As a result of COVID-19, parties to leases often include force majeure clauses dealing with the handling of pandemic situations and responsi - bilities in this respect, amongst other issues. Typically, rent is paid in advance, either monthly or quarterly. 6.5 Rent Variation The parties may agree on certain adaptations, subject to changes of the interest rate level and, alternatively for leases with a minimum term of five years, of the Swiss Consumer Price Index (so-called indexed rent). The parties may also agree on staggered rents (although not in com - bination with indexed rents for the same period) and special types, such as turnover rents.
If the landlord makes value-adding investments in the leased premises, it has the right to unilat - erally increase the rent, subject to certain statu - tory regulations. 6.6 Determination of New Rent Typically, Swiss tenancy law provides the frame - work for the calculation of any rent increases. 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). How - ever, for commercial 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 obli - gation 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 obvi - ously bear such costs, unless the landlord vol - untarily 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 ancillary 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 busi - ness operations of the tenant are typically borne by the tenant, even if invoiced to the landlord. The costs related to the common services and infrastructure are allocated to each tenant sepa -
915 CHAMBERS.COM
Powered by FlippingBook