SWITZERLAND Law and Practice Contributed by: Francis Nordmann, Johannes Bürgi, Christian Eichenberger and André Kuhn, Walder Wyss Ltd
6.15 Effect of the Tenant’s Insolvency In the case of a tenant’s insolvency, all rent receivables due become assets in bankruptcy. However, the lease does not end automatical - ly: the landlord can request security for future rents. If security is not provided within a grace period, the landlord is entitled to give extraordi - nary notice and immediately terminate the lease contract. 6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations The following forms of security can be provided to a landlord to protect against a failure by the tenant to meet its obligations: • rent deposits; • bank guarantee/surety; and • the additional liability of a third party/affiliate. 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, tenants 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 termination of the lease would cause a degree of hardship for them or their family, which cannot be justified by the interests of the landlord. Due to a tenant’s mandatory right to claim an extension of the lease, a landlord’s rights in rela - tion to legal measures are rather limited, unless it becomes obvious that the tenant will not leave on the agreed (and court-ordered, respectively) date. Under these circumstances, it might be possible to evict the tenant on the date of ter - mination.
rately (typically based on the share of its leased premises). 6.11 Insurance Issues The owner must insure a building and pay such costs; insurance costs must not be included in the ancillary costs. 6.12 Restrictions on the Use of Real Estate Basically, the parties are free to agree on limita - tions 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 land - lord’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. 6.13 Tenant’s Ability to Alter and Improve Real Estate If a tenant wants to alter or improve the rented property, the landlord’s written permission is required. The landlord’s consent may be sub - ject 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 the added value of such works. 6.14 Specific Regulations Basically, Swiss tenancy law differentiates between commercial and residential leases only. Certain mandatory provisions apply only to resi - dential leases.
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