Экзамен зачет учебный год 2023 / Furrer, Tenancy Law Switzerland

Question 11: Immediate Termination under Unusual Circumstances

L and T have concluded a tenancy contract with or without time limit. Under what conditions and terms may one party give immediate notice under unusual circumstances? In particular:

a) Can L give immediate notice if T did not pay the two last monthly rents?

No. Where T has not paid the rent for the last two months, L may set a time limit for payment which must be at least thirty days. L may terminate the agreement if T fails to pay the rents within the said time period, upon thirty days notice (Article 257d SCO). However, if T continually pays the rent only after an additional thirty days period, L may, terminate the tenancy agreement, notwithstanding the fact that T finally does pay the rent.54

b) Can L give immediate notice if T, by repeatedly insulting his neighbours, has endangered peace in the house?

The party wishing to terminate the agreement must establish (Article 8 SCC) the existence of “important reasons” which objectively render the agreement “unbearable”. However, as discussed, only circumstances which neither existed, nor were foreseeable at the time the agreement was concluded allow for such an exceptional termination. Such reasons may be of an objective nature (i.e. war or commercial crisis), or of a subjective nature (i.e. a substantial change of either parties’ financial situation, a divorce or separation of the common law spouse, personal misunderstandings between the parties to the agreement).55 Therefore, if T repeatedly disturbs the peace in the house, L may terminate the agreement since, from an objective point of view, he must not tolerate such behaviour.56

However, Article 266g SCO provides that such extraordinary termination must observe the statutory notice period of three months (Article 266c SCO), but not the date at which the termination takes effect (i.e. termination is possible with three months). Thus, in Swiss tenancy law, there is no general provision of a right to immediate termination.

Hence, Article 266g, SCO enables the parties to terminate the tenancy agreement upon a three months period.

However, Article 266g SCO does not apply to the non-performance of the landlord’s duties (See: Article 258(2) in conjunction with Article 259b lit a SCO). The Article also doesn’t apply to the tenant’s duties: the duty of care in using the apartment; the duty to show

54BaK-WEBER, N 15 ad art. 257d SCO; HUGUENIN, p. 54; BGE 119 II 232 cons. 3.

55HONSELL, p. 224 et seq.

56See Commentary SVIT, N 15 ad art. 266g SCO.

consideration towards the neighbours (Article 257f SCO); the tenant’s duty to pay the rent, since these occurrences are regulated by specific provisions of the SCO.57

c) Is a contractual clause (“clause résolutoire”) valid according to which the contract is automatically terminated in case T does not pay two consecutive monthly rents or commits any other “gross” breaches of her duties?

This question addresses the issue of conditions subsequent. In general, Swiss legal opinion affirms the admissibility of conditions subsequent. 58 As tenancies do not end at a predetermined point of time, they are considered tenancies unlimited in time.

The Swiss Federal Court has held that conditions subsequent in tenancy agreements are to be upheld.59 In cases in which such conditions are invoked, the Court has excluded the application of the protective rules on termination (Article 271 et seq. SCO).60 However, and contrary to the general rules of contract, as tenancy agreements are “unlimited in time” they must be terminated by serving notice, i.e. the tenancy does not end ipso iure. According to the Swiss approach, the tenant may therefore challenge termination where he can show that the condition has been brought about by the landlord mala fide. As the challenge is subject to Article 271 et seq. SCO, the exclusion of the said rules by the Swiss Federal Court is, in effect, rejected in the tenancy context, because, in such circumstances, it is manifest that a regular termination should take place, thus the special rules on conditions subsequent are abandoned.61

Based on the above, a “clause résolutoire” is admissible, but, in Court, its destiny and, more precisely, the method by which the tenancy can be terminated is uncertain.

A different view has been advanced where the landlord seeks to exercise his right to terminate the tenancy for important reasons. According to at least a part of legal opinion, the parties may, to a certain extent, define such “important reasons”, so as to include the tenant’s nonor irregular payment.62 This opinion, however, has been disputed.63

57HONSELL, p. 224.

58BaK-WEBER, N 3 et seq. ad art. 255 SCO.

59BGE 56 II 190 et seq.

60BGE 121 III 260 cons. 5.a.

61BaK-WEBER, N 4b ad art. 255 SCO.

62ZK-HIGI, N 7 ad art. 266g SCO.

63BaK-WEBER, N 2 ad art. 266g SCO.

Set 3: Rent and Rent Increase

General Introduction

According to Article 257 SCO, the rent is the remuneration for the use of the apartment. Whilst it is usually paid in cash, the tenancy agreement may also provide for payment, either in whole or in part, in the form of a non-cash benefit such as caretaker services. As opposed to the rent, accessory charges are borne by the landlord, unless otherwise agreed (Article 257a(2) SCO).

The amount of the rent as well as the terms of payment is defined by the tenancy agreement. The landlord may raise the rent at the next possible date for giving notice, and must notify and justify the increase at least ten days before the period of notice commences on a form approved by the Canton (Article 269d(1) SCO).

The tenant may challenge the increase, on the grounds that it is abusive, within thirty days of notification with the competent local conciliation authorities64 (Article 270b SCO). A rent is abusive, and subject to review, if it results in excessive returns from the rental object (Article 269 SCO).65

Question 12: Settlement Date and Modes of Payment

When is the rent due? Is there any restriction on modes of payment? Does and if yes, under which conditions, have L a right of distraint (pledge) on T’s furniture and other belongings to cover the rent and possible other claims against T?

According to Article 257c SCO, the rent is due by the end of each calendar month. The parties may agree on a different date.

The payment may be in cash, but may – where a clause in the tenancy so provides – also be made in a different form. However, according to Article 254 SCO, agreements that are linked to the tenancy agreement (coupled transactions, Koppelungsgeschäfte) are null and void when: (i) the tenancy is made dependent on the coupled transaction, and (ii) the coupled transaction contains obligations which are not directly linked to the use of the apartment on the tenant’s part, and (iii) the coupling is abusive.66 Thus, coupled agreements are null and void if the tenancy agreement is used as a means of enforcement.

The landlord has a right of distrait only in respect of arrears under a lease of business premises (Article 268 SCO), for both an expired one-year rent and the ongoing half-year- rent on movable property within the premises.

64Each Canton is divided into one or several districts, and each district has a local conciliation authority.

65See ad question 13.

66Commentary SVIT, N 14 ad art. 254 SCO.

Question 13: Requirements for Rent Increase

What are the ordinary substantive and procedural requirements for an increase in the rent? Are there rules on a maximum increase in private and criminal law (profiteering)? By whom are there rules enforced? (public ministry or national or local administrative agency etc)

The rent may be increased as of the next date at which notice can be served (i.e. as defined by local custom) (Article 269d(1) SCO). L must, however, notify T of the increase using a form approved by the Canton at least ten days before the commencement of the three month notice period (Article 269d(1) SCO).

A rent increase is not possible for tenancy agreements limited in time, because such agreements cannot be terminated by ordinary notice.67 Should L wish to raise the rent, in such a case, he has to seek to amend the agreement, which T is most likely to refuse.

The increase is null and void if L does not use the cantonal form and/or does not state a reason for the increase and/or simultaneously threatens to terminate the tenancy agreement or actually terminates the agreement (Article 269d(2) SCO).

T may challenge the increase as abusive at the conciliation authority within 30 days of notification (Article 270b(1) SCO). The increase is abusive where it leads to excessive returns from the property (Article 269 SCO). As a rule, however, rents are not abusive if:

(i) they are within the range of the rents customary in the specific neighbourhood or place in which the property is located; and/or if (ii) they are based on either an increase of L’s costs, or the costs of additional services rendered by L; and/or if (iii) they are, for newer buildings, within the scope of the cost-covering gross revenues;, and/or if (iv) they solely aim at the compensation of former abatements of the rent which had been granted based on a restructuring of the costs of financing customary in the particular market and are in a financial schedule which had been known to T in advance;, and/or if (v) they are solely based on an increase in the costs of the capital invested (as determined by the current mortgage rates); and/or if (vi) they do not exceed the amount recommended by associations of landlords, or tenants, or similar organizations (Article 269a SCO). Finally, since the rent increase must observe the three months period provided for by Article 266c SCO, it cannot take place more often than four times per year.

Question 14: “Index-clause”

a)Is it possible to contractually link the annual increase of the rent with the annual average increase of the cost of living (or a similar index) as established by official statistics?

This is possible. The increase, however, must be linked to the national index of consumer prices. In addition, this linkage is only available in respect of tenancy agreements concluded for a fixed duration of at least five years (Article 269b SCO).68

b)Is a progressive rent arrangement, providing for an annual increase of X percent, lawful?

This is lawful under the following conditions: (i) the tenancy is concluded for a fixed duration of at least three years; (ii) the rent is increased no more than once a year; (iii) the rent increase is fixed in Swiss currency (Article 269c SCO).

Question 15: Rent Increase by Contractual Amendment

By ordinary letter, L tells T that the rent will be increased by 10% in three months time to compensate for the general increase of the cost of living. No further justification is provided to support this claim. Without protesting, T pays the increased rent for 3 months without any reservation. After this time only, she gets doubts and consults a lawyer. Can T get some money back? If yes, can T off-set the sum to be repaid against future rent instalments on her own motion without judicial intervention?

The parties may mutually agree to a rent increase at any time. Where a unilateral increase by the landlord is concerned, Article 269d SCO applies. Here, the landlord must allow a period of 10 days before the next termination period begins for the tenant to consider challenging the increase. Consequentially, according to legal opinion and jurisprudence, the tenant waives the right to challenge the increase by paying the increased rent, tacitly accepting the increased rent and modifying the tenancy agreement in doing so.69

Question 16: Deposits

What are the general rules on deposits?

The landlord may, and usually does, require the tenant to provide a deposit of, at the most, of three months’ rent (Article 257e(2) SCO) (this does not apply to business premises).

In the event that the deposit is furnished in cash or securities, the landlord must lodge the deposit with a bank in the tenant’s name (Article 257e(1) SCO). The bank may release the deposit only with the landlord’s and tenant’s approval, or where a summons has been made. Where the landlord raises no claim within a year of termination, the tenant may seek a refund of the deposit from the bank.

68An initiative, supported by the Swiss Tenants’ Association, proposed to link the rents to a levelled mortgage rate on a five-year basis. This initiative has however been dismissed by the Swiss people.

69BaK-WEBER, N 1 ad art. 269d SCO, BGE 106 II 356 cons. 3.c.

Question 17: Utilities

What are the general rules on utilities? Which utilities may the landlord make the tenant pay by contractual stipulation? Is it legal to establish in the contract a monthly lump sum to cover certain or all utilities?

The tenant must pay ancillary costs (Nebenkosten) (Article 275a and 275b, SCO), i.e. the costs for heating, hot water and similar utilities, where both tenant and landlord have agreed on such a payment. Alternatively, the landlord may agree to bear such costs himself by not including such a clause in the agreement. In most cases, however, it is the tenant who bears such costs.

In general, the tenant pays a monthly sum on account (Article 257c, SCO) to cover ancillary costs. Each year or half year, the landlord must render a statement showing the amount of actual costs, either reimbursing or claiming payment for the difference.

The parties may agree to a lump sum payment. The lump sum is calculated on the basis of the average yearly costs for the last three years (Article 4(2) Swiss Ordinance on Tenancy of Accommodation70). The tenant is not liable for a discrepancy between the lump sum and the actual costs in his favour. However, he is entitled to repayment when the difference is in the landlord’s favour, due to the mandatory nature of Article 257b(1) SCO, which prohibits payments for ancillary costs in excess of the actual costs.71

Set 4: Obligations of the Parties in the Performance of the Contract and Standard Terms

General Introduction

Swiss law has not adopted Directive 93/13/EC (OJ 1993, L 95/29) on Unfair Terms in Consumer Contracts, and provides only limited protection with regard to standard contract terms.72 According to Article 8, of the Unfair Competition Act73, contract terms are unfair if they substantially differ from statutory provisions or provide for rights and duties which are unexpected, misleading or substantially divergent given the nature of the contract.

70SR 221.213.11.

71BaK-Weber, N 9 ad art. 257b SCO.

72See ANDREAS FURRER, AGB als Stolpersteine in der Vertragsgestaltung – Die KMU-Problematik, in: Rechtsfragen rund um die KMU, Schulthess 2003.

73SR 241.

Question 18: Control of Standard Terms

What kind of control exists for clauses contained in standard contracts used by a landlord acting in a non-commercial capacity?(presupposing that the national implementation legislation of the Unfair Terms Directive applies to commercial landlords)

Because of the low level of protection provided by the Swiss rules on unfair terms and general conditions, these rules have hardly any impact on tenancy law. EC directives, as they are not directly applicable in Switzerland, provide no relief. Moreover, neither Swiss legal opinion nor Swiss case law refers to EC law in the area of tenancy law.

Question 19: Frequent Standard Terms

The terms of a standard contract used by L (acting in a non-commercial capacity) provide that:

a)The tenant must not withhold rent or off-set rent instalments against any alleged claims of her own, except if authorised by a judge.

b)The cost of small reparations, up to 100E per annum, have to be met by the tenant.

c)At the end of the tenancy, the apartment has to be repainted by a professional painter at the expense of the tenant.

d)If the tenant becomes a member of a tenants‘ association, the landlord has the right to give notice.

Are these clauses lawful? If not, may the standard terms be challenged by a tenants‘ association, too?

Clause a) is unlawful. Article 259g SCO allows the tenant to off-set instalments if L has not corrected a defect, on the expiry of a deadline set by the tenant in writing.

Clause b) is lawful, but unnecessary; statute imposes the duty on the tenant to fix minor defects up to an amount of CHF 100 (Article 259 SCO).74

Clause c) is unlawful. At the end of the tenancy, the tenant must clean and hand over the apartment in the condition it is in, having used it in accordance with the tenancy. According to the Federal Court, the tenant is not under a duty to repaint the apartment.75

Clause d) is, from a Swiss perspective, clearly abusive and immoral, and therefore null and void. The Constitution guarantees freedom of association (Article 23 Swiss Federal Constitution), though this does not prevent the tenant from entering into an agreement which prohibits him from joining a tenants’ association. Therefore, it is not so much the

74HONSELL, p. 214.

75BGE 105 II 35, cons. 4.b.

Constitution that prohibits such clauses, but, rather, considerations relating to public morality (Article 19 and 20 SCO) and the protection of personal rights (Article 27 SCC).

As to the directive, see question 18: as Switzerland is not a member state, it is not bound by the directive.

Question 20: Changes to the Building by the Tenant

T is a tenant in a building with 4 floors and 10 apartments. He asks L for the permission to install a parabolic TV antenna on his balcony. L refuses the permission by alleging that otherwise, he would have to give the permission to every tenant, which would ruin the view of the house aesthetically. In addition, he argues that 15 TV programs are already accessible via the cable TV connection of the house, which should be more than sufficient to satisfy the tenant’s demand.

As long the installation of a parabolic antenna is compatible with Swiss public law, and as long as the parties have not agreed that T must seek L’s permission in the tenancy agreement, L cannot oppose the installation.

Variant 1:

Assuming that no Turkish programs can be received through the existing cable TV connection, does it matter if T is a Turkish immigrant who does not speak the local language well?

There is no Swiss jurisprudence dealing with this question. The Turkish immigrant is protected by Article 10 ECHR, which would not, however, have any direct effect (see question 1.b; the abovementioned on the direct effect of the Constitution applies).

Variant 2:

On his balcony, T exhibits a huge poster with the slogan “Peace in Palestine and Iraq”. Can L force him to remove it?

The tenant must use the apartment with due care and consideration (Article 257f SCO); the landlord and the neighbours do not have to put up with behaviour in contravention of these duties. However, such behaviour is only evidenced if it is either a criminal offence or against public morality.76 Exhibiting a poster with the said slogan is therefore admissible (and, in fact, is quite common).

Question 21: The Landlord’s Right of Possession of the Keys

Does L have the right to keep one set of the keys of the apartment rented to T? Under which conditions is L allowed to enter the apartment without T’s previous permission? If these conditions are not fulfilled, does L commit a criminal offence when entering the apartment without T’s previous permission?

As T rents the apartment he is free to decide on whether a given person, including L, may enter the apartment. According to the Swiss Association of Real Property Owners, L may only keep a set of keys with T’s consent.77 In our opinion however, L may keep a set of keys since he may have a right to enter the apartment (in emergencies), though he may not use the keys without T’s consent. If the landlord enters the apartment without the tenant’s consent he commits a criminal offence (breach of domestic peace, under Article 186 Swiss Penal Code.

T must accept L’s entry where this is necessary for maintenance, the sale or re-letting of the apartment, provided that L gives reasonable notice.78

Question 22: The Landlord’s Liability for Personal Injury

As the stairs in the house are not well maintained and in a slippery state, C, T’s child, falls and breaks her leg. Is L liable, and if yes under which legal basis?

The landlord incurs a double contractual and tortuous liability. As far as the contractual liability is concerned, L is contractually bound to maintain the apartment in “a suitable condition for its predetermined use” (Article 256(1) SCO) which includes the maintenance of the stairs.

However, where T is the only tenant, L is not obliged to carry out all maintenance and repair work: the tenant must bear responsibility for “minor maintenance”, i.e. repair and maintenance for which the costs are marginal (kleiner Unterhalt).79 Therefore, to the extent that “minor maintenance” is involved, the sole tenant must maintain the stairs.

If, however, several tenants occupy the house and the stairs are used by all, it is the landlord who is responsible for the maintenance work. The “suitable condition for the property’s predetermined use” is difficult to define, but requires, in any event. that the property does not endanger the life and health of the tenant. 80 In the event that the condition of the stairs cause injury to the T’s child, the landlord is in breach of contract and is liable for the injury and damage as they arise, such as the costs for the child’s medical treatment (Article 97(1) in conjunction with Article 256(1) SCO). The tenant must

77Monatsschrift HEV 2/2003, p. 105.

78Commentary SVIT, N 18 ad art. 257h SCO; BaK-WEBER, N 4 ad art. 257h SCO.

79Commentary SVIT, N 13 et seq. ad art. 257 SCO.

80Commentary SVIT, N 4 ad art. 256 SCO.

establish that L is in breach of contract, and that the breach caused the damage incurred by T (L bears the costs incurred by T’s child, Article 276 SCC81), whereas the fault required on L’s part is statutorily assumed (Article 97(1) SCO) yet may be rebutted). Any degree of fault on L’s part – i.e. intention or negligence – is sufficient (Article 99(1) SCO). The fact that the child has no (direct) contractual relationship with L does not matter, since it is T who incurs the damage as the party responsible for the child.

Furthermore, L is also liable in tort (Article 41 et seq. SCO). T may invoke the double basis of contractual and tortious liability for his claim for damages. L is liable, according to Art 41 et seq. SCO, for personal injury, but generally not for financial losses, except if a particular rule forbids the specific act that caused the damage. The child, represented by T, may therefore bring a claim for damages.

Set 5: Breach of Contract

The generic term “breach of contract” covers nonor late performance, defective performance and impossibility.

In case of nonor late performance, the promise, after admonishing the promisor and setting him a time limit for performance: (i) may, on the passing of the time limit, waive his claim for performance and claim damages instead. Such a party may (ii) choose whether: (ii.a) to claim full damages (i.e. the amount which is commensurate to the worth of full and timely performance); or (ii.b) to claim only those damages which restore the situation to that as if no contract had been entered into at all (including loss of profit), (Article 107 SCO).

Defective performance is governed by Article 97(1) SCO. The party in breach of contract is liable for damages resulting from defective performance (Article 97 SCO), if: (i) financial loss resulted from the breach of contract; and (ii) the party is actually in breach of contract; and (iii) the breach is de facto and de iure the cause of the damage; and (iv) the contract was wrongfully breached (i.e. intentionally or negligently).

According to the majority of legal opinion and jurisprudence, only financial damage may be compensated (a lost opportunity - i.e. a foregone profit - does not count as damage in this sense).82 The damage must result from the breach, that is, the breach must be a conditio sine qua non of the result, i.e. the damage (causality de facto), and the breach must, in the ordinary course of events cause such damage (causality de iure). The Swiss Federal Court is rather generous in affirming such causality, excluding only particularly exceptional consequences.

81See PETER TUOR/BERNHARD SCHNYDER/JÖRG SCHMID, Das schweizerische Zivilgesetzbuch, Zurich 1995, p. 319.

82See BaK-WIEGAND, N 38 ad art. 97 SCO, but see CHRISTOPH MÜLLER, Die ärztliche Haftpflicht für die Geburt eines unerwünschten Kindes, AJP 2003, 522 pp.