SWITZERLAND Trends and Developments Contributed by: Martin Furrer, Alexander Wyss, Samuel Marbacher and Charles Gschwind, Baker McKenzie
conversions of buildings that had been used exclusively for retail purposes for decades. Other regulatory changes During the autumn session of 2023, the Swiss Parliament adopted two important legislative proposals relating to tenancy law favouring land - lords. However, the Swiss Tenants’ Association successfully submitted a referendum against these amendments in January 2024. The first planned amendment aims to strengthen the provisions on subletting, thereby giving land - lords more power over tenants who sublet the property. Previously, there was an exhaustive list of reasons why a landlord could refuse to sublet. The amendment explicitly states that subletting can be refused if it is for more than two years. If premises are subleased without the landlord’s written consent, the landlord would be able to terminate the lease more easily than before, with 30 days’ notice. The second planned amendment concerns the termination of a lease for personal needs upon the sale of a property. For residential or com - mercial leases, the new owner may terminate the lease as of the next legally permissible date if they claim an urgent need for such premises for themselves, their close relatives or their in-laws. With the enactment of the amendment, the new owner would no longer have to prove an urgent need; instead, termination can be based on an objective assessment of a significant and current need. This introduces a much lower threshold for termination. A potential forthcoming amendment to the Lex Koller is expected to have a significant impact on the hospitality sector. The Lex Koller imposes restrictions and requires permits for the acquisi - tion of real estate by foreigners. Under the cur -
rent law, the acquisition of hotel properties is (generally) not subject to Lex Koller approval, unlike the acquisition of employee housing, unless the purchase is made at the same time as the hotel. This approach was confirmed by the Federal Court in a decision dated 21 Decem - ber 2023. However, on 25 September 2023, a motion to amend the Lex Koller to allow hotels to build staff housing was approved by the Swiss Parlia - ment and is currently pending before the Federal Council. This change would be significant for the hotel industry in the mountains, where market rents are often unaffordable for staff housing and the hotel industry thus has a real need for in- house solutions. Summary and Outlook Over time, the interest rate hikes and the reces - sionary European states have left their mark. In the third and fourth quarters of 2023, profit warnings, declining orders and job cuts were reported. Nevertheless, 2024 is likely to be a transitional year. The federal government’s eco - nomic experts expect a similar real GDP growth of 1.1%. However, the vacancy rates will con - tinue to fall, and it is possible that the limit of 1% vacancy will be undercut at a national level in summer 2024. The introduction of a collective investment scheme called L-QIF in March 2024 will provide the Swiss financial centre with a new fund struc - ture that can be set up more quickly, flexibly and cost-effectively, and is particularly suited to cer - tain types of real estate investments. In February 2024, at the second round table on the housing shortage, representatives of the public and the construction and real estate sec - tors agreed on an “action plan”, recommend -
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