Buying a rented flat

Buying a rented flat

"I'm thinking of buying a flat. However, the current owner has a lease on the property in question. If I buy this flat, will the previous owner remain bound by the lease or will it be transferred to me? Will I be able to terminate the lease?

Vincent, Conches

Article 261 of the Swiss Code of Obligations stipulates that if, after a lease has been entered into, the lessor disposes of the leased property or if it is removed from the lessor's possession as a result of debt collection proceedings or bankruptcy, the contract passes to the purchaser along with ownership of the property. If ownership is transferred by sale, the current lease passes to the purchaser for the future, together with all the rights and obligations attached to the lease, as from the date on which the transfer of ownership is entered in the Land Register. This entry has no retroactive effect, so that the seller remains bound by his obligations and retains his rights for the period prior to the transfer.

If you become a party to the lease, you may terminate it at the end of the contractual term. However, this option is only available from the date of entry in the Land Register, so any termination by a future purchaser is null and void even if it is given for a date subsequent to that entry. The purchaser may also terminate the lease early by observing the standard notice period provided for by law, without having to respect the contractual deadline and notice period. This option is useful in the case of a lease of a certain duration, but it is only available to lessors of residential or commercial premises who can claim, for themselves or for their close relations, an urgent need for the leased property.

Once the property has been sold, the seller is not relieved of all his obligations to the tenant. The seller remains liable for obligations that arose prior to the transfer of the leased property, and will also be liable for any damage caused to the tenant if the purchaser terminates the contract early. In this respect, the purchaser may be required to cover the difference between the rent that the tenant would have paid and the rent that the tenant will have to pay for a new lease until the contract expires.

It should also be pointed out that, in the Canton of Geneva, prior authorisation from the Department of Housing and Energy is required for the sale of flats intended for residential use that were previously available for rent and fall into a housing category where there is a shortage.