Cancelling a lease on business premises in Switzerland requires a sound knowledge of tenancy law, deadlines and contractual provisions.
Terminating a commercial lease is one of the more complex issues in Swiss tenancy law. Different interests, specific legal regulations and a multitude of factors that both landlords and tenants have to take into account make the process more difficult. In-depth knowledge of the framework conditions is required to find a legally compliant, fair and economically sensible solution.
Time and again, it has been shown that forward-looking planning and transparent communication between the contracting parties can effectively minimise misunderstandings and conflicts. Particularly in the case of commercial space, there is often a close interaction with business processes, which is why a termination not only affects the pure contractual relationship, but also business decisions, customer contacts and supply chains. For this reason, it is advisable to clarify the contractual and legal situation at an early stage and to consider possible follow-up questions.
The law of commercial leases in Switzerland differs in some respects from residential leases, although both are subject to the general provisions of the Swiss Code of Obligations (OR). The main focus of commercial tenancy law is on issues relating to the purpose of the lease, leasehold improvements, ancillary costs and protection against competition. The statutory provisions for the protection of tenants are generally less extensive for commercial premises than for residential premises, which is particularly evident with regard to notice periods, protection against termination and rent increases.
However, Articles 253 et seq. of the Swiss Code of Obligations (OR) also apply to commercial leases. A distinction is made between fixed-term and open-ended contracts. In the case of fixed-term leases, the tenancy automatically ends at the end of the agreed period if no contract extension is negotiated. In the case of open-ended rental contracts, a formal notice of termination is required. Both the statutory minimum information and formalities (e.g. official form in certain cantons) must be observed.
In a business context, the question of whether, for example, the tenant has made structural changes that have to be reversed also plays an important role. In some cases, this is already regulated in the rental contract to avoid later disputes. The purpose of the business and any changes to it – for example, new business activities that were not initially agreed in the lease – can also affect the tenancy. At the same time, the Swiss legal system has a rather liberal approach. Business people are generally considered to be more risk-aware and informed than private tenants, which is why the legislature expects companies to freely negotiate contractual agreements to a certain extent.
Anyone dealing with commercial leases should familiarise themselves with the content requirements for commercial leases, the cantonal provisions on termination and the different protective provisions compared to residential leases. Carefully reading the existing lease and seeking professional advice can prevent conflicts and help clarify important points.
The notice period for commercial premises in Switzerland is a key point that must be carefully observed for any termination. According to Article 266a ff. of the Swiss Code of Obligations, the notice period for commercial premises differs from that for residential premises. While a notice period of three months generally applies to apartments (unless otherwise contractually agreed), the statutory notice period for commercial premises is usually six months. This longer period takes into account the special requirements for conducting business. When moving or closing a business, companies often have to inform suppliers, customers and employees, sell off inventory in a timely manner or look for new premises and adjust contracts.
However, in many cases the parties can contractually agree on longer or shorter notice periods. In certain industries in particular, a shorter period is required so that companies can remain flexible. Sometimes a longer period is preferred, for example if conversions or industry-specific permits are tied to the location. Nevertheless, any contractual deviation must comply with the legal requirements. Agreements that unreasonably disadvantage the tenant may be invalid, depending on the individual case.
Another important aspect concerns the termination dates. Unless otherwise specified, a termination can be declared in accordance with the Swiss Code of Obligations at the end of a six-month rental period. However, in many cantons (e.g. Zurich), customary termination dates (e.g. end of March or end of September) or contractually agreed dates must be observed. Anyone who is dependent on observing a specific notice period should check their rental contract carefully and calculate deadlines correctly. If there are errors in calculating the notice period, the termination may be late, which can lead to an automatic extension of the lease.
In any case, it is advisable to comply with formal requirements (e.g. registered letter, official form in certain cantons). If the notice of termination is not delivered correctly, this can lead to the declaration being invalid. The signature of all authorised parties – for example, in the case of a company with several shareholders – is also essential to make the termination legally effective.
A termination of the business premises by the landlord can have various reasons. Often, there is a personal need when the landlord needs the property for the expansion of his own business or when he wants to sell the building and terminate the lease in advance. Conflicts over rent or frequent violations of contractual obligations by the tenant (e.g. late payment, improper use of the premises) can also give rise to termination.
But even if the termination appears justified, the landlord must comply with the legal and contractual requirements. If a minimum term has been agreed in the rental contract, an ordinary termination during this period may be excluded. In this case, only an extraordinary termination for serious breaches of contract or other important reasons remains. But here, too, clear evidence of the breach of duty must be provided and the tenant must generally be given a reasonable period of time to rectify the problems.
In practice, when a landlord terminates a lease, disputes often arise regarding the so-called protection against dismissal, which applies in certain situations. Although the protection for business premises is less strict than for residential premises, an abusive termination can still be contested. For example, a termination is considered abusive if it is only issued to force the tenant to accept an excessive rent increase. In such cases, the tenant has 30 days in which to appeal to the arbitration authority against the termination.
It is therefore important for the landlord to find out in advance about the applicable provisions and, if necessary, to seek legal advice. In many cases, it is also advisable to find an amicable solution with the tenant, for example by helping them to find alternative premises or offering financial compensation. An amicable settlement can avoid lengthy proceedings and the associated costs.
When terminating a commercial lease, tenants usually have economic reasons for doing so. Perhaps the location is no longer profitable, the business is closing or needs more space. In these cases, the tenant can terminate the lease by observing the contractual or statutory notice period. The formal requirements must also be observed here.
It is more difficult if a tenant wishes to withdraw from the contract prematurely. In this case, the tenant has the right to find a suitable replacement tenant, provided that the tenancy agreement does not state otherwise. The replacement tenant must be willing to assume the tenancy relationship under the same conditions, for example, to accept the same rent and the same contract duration. If the proposed successor appears solvent and willing to honour the contract, the landlord must accept them as a tenant. If the landlord does not accept the proposed successor, the previous tenant's obligation to pay ends on the replacement tenant's move-in date.
However, the search for a suitable new tenant should not be taken lightly. Particularly in the case of special business premises with industry-specific requirements or high rents, it may take some time to find a suitable candidate. In addition, in certain cases a landlord may have justified doubts about the creditworthiness or business concept of a new tenant and refuse to allow the takeover. If this results in a dispute, the courts may have to decide whether the proposed replacement tenant was acceptable.
It is therefore advisable for the tenant to contact the landlord at an early stage and to be transparent about the steps planned. Open communication makes it easier to find solutions. You should also not forget the dismantling of any structural changes or the dismantling of tenant improvements. An explicit passage in the lease can clarify what needs to happen when you move out. If such a provision is missing, there are sometimes disputes about whether or not the tenant has to return the premises to their original condition.
Regardless of which party gives notice, the lease forms the basis for the legal dispute. This document should not only clearly regulate the term and rent, but also include questions regarding notice periods, renovation obligations and extensions. Since commercial tenancy law in Switzerland is relatively flexible, it is advisable to carefully include all the crucial points in the contract. This will help to avoid many conflicts later on.
The legal minimum standards and cantonal requirements should also be known. Depending on the canton, there may be certain differences in terms of formal requirements or official forms. If this is ignored, it can lead to a termination being ineffective. It is also wise to include provisions in the lease regarding the procedure for premature termination or in the event of misconduct on the part of the tenant. Clear wording makes it easier for both parties to recognise and enforce their rights. Tenants and landlords should be aware that while Swiss tenancy law encourages freedom of contract, in the event of a legal dispute, the contract will always be examined for possible abuse or lack of good faith. Unilaterally disadvantageous clauses can be contested under certain circumstances.
A termination is always an exceptional situation that can have an impact on everyone involved. Those who prepare thoroughly reduce the potential for conflict. Above all, it is important to proceed in a fair and legally compliant manner. Landlords who can prove beyond doubt that a termination is lawful strengthen their position and avoid trouble. Tenants who respect deadlines and contractual provisions stand a good chance of reaching an amicable solution and maintaining a positive working relationship with the landlord – especially if they wish to rent commercial premises again in the future.
It is advisable to collect all the necessary documents and clarify your own situation at an early stage. Tenants should know exactly whether they want to find a replacement tenant or whether they want to terminate the contract properly with effect from the next possible date. Landlords, on the other hand, should assess whether a personal need is actually legally valid, whether there could be a risk of abusive termination or whether it would be better to opt for an amicable solution. In many cases, differences of opinion can be quickly resolved if both sides clearly state their interests.
Switzerland offers a range of arbitration services where you can get legal advice. These authorities or municipal agencies are points of contact before it comes to costly legal proceedings. Particularly in the case of business premises, swift mediation can help to clarify disputes and avoid high costs and delays. If you are unsure about complex issues, it is best to consult a specialised lawyer or an expert in property law. Although this involves costs, it helps to avoid ill-considered steps that could ultimately lead to even higher expenses.
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