Geneva and its high rents...

Geneva is unfortunately renowned for being almost perpetually in a situation of housing shortage. There are not enough homes on the market, rents are high, all this means that finding a decent apartment can sometimes resemble an obstacle course for expatriates. Add to this that it may not always be obvious for an expatriate (as for many Geneva citizens) to find his way through all the provisions and regulations applicable to a lease subject to Swiss law.

According to art. 270 §1 CO, within 30 days of taking possession of the property, the tenant may challenge the initial rent as unfair before the conciliation authority and request said authority to order a reduction of the rent:

• If the tenant felt compelled to conclude the lease agreement on account of personal or family hardship or by reason of the condition prevailing on the local market for residential and commercial premises; or

• If the initial rent required by the landlord is significantly higher than the previous rent for the same property.

In Geneva, it is mandatory to use an official form when contracting a new lease, on which the amount of rent paid under the previous lease must be indicated. This makes it much easier to verify if the new rent is significantly higher than the previous one, being specified that an increase of over 10% is generally seen as significant.

The deadline to challenge the initial rent is 30 days, starting from the reception of the keys and not from the signature of the contract. This must be done by filing a request to the conciliation authority.

According to art. 261 §1 CO, where, after concluding the contract, the landlord alienates the object or is dispossessed of it in debt collection or bankruptcy proceedings, the lease passes to the acquire together with ownership of the object.

However, the new owner may terminate the lease as of the next legally admissible termination date, if he claims an urgent need of such premises for himself, his close relatives or in-laws (art. 261 §2 let. a CO).

Such early termination of the lease agreement may be challenged in Court when the termination is given in a manner contrary to good faith (ie. if the urgent need claimed by the new owner is not real but just a pretext to end the contract).

The tenant may also seek an extension of the lease in Court. However, in practice and if the urgency claimed by the new owner is real, the extension will be granted only for a short period.

Dialogue is often the most efficient way to solve neighborhood problems. However, when these efforts fail, the law provides protection to the tenant.

According to art. 257f §2 CO, the tenant must show due consideration for others who share the building and for neighbors. The tenant must respect the privacy and tranquility of its neighbors and must refrain from undue interference.

In particular, the tenant must refrain from: making noise, generating unpleasant odors; adopting an immoral behavior; insulting his neighbors; breaking the building regulation; etc.

The rules governing leases allow the tenant to intervene only towards the landlord. If the latter fails to take appropriate action, the tenant may, depending on the particular circumstances, terminate the lease and/or seek a reduction of the rent, or even claim for damages.

The troublemaker, for his part, faces early termination of the lease by the landlord if, despite written warning from the landlord, the tenant continues to act in breach of his duty of care and consideration, in such a way that continuation of the lease becomes unconscionable for the landlord or other persons sharing the building.

The landlord may terminate the lease subject to a 30 days notice ending on the last day of a calendar month (art. 257f §3 CO).

The tenant may also act directly against his neighbor under the general rules governing neighborly relations in the Swiss Civil Code (art. 679 and 684 CC, art. 926 CC).

A distinction shall be operated between costs incurred in order to remedy a defect and those related to the renovation of the rented apartment.

According to art. 259 §1 CO, the tenant must remedy defects which can be dealt with by minor cleaning or repairs as part of regular maintenance and, depending on local custom, must do so at his/her own expense.

Defects that cannot be qualified as minor, such as water infiltration for example, are to be taken in charge by the landlord. This applies also to any costs incurred in connection with normal wear and tear.

The law gives different options to a tenant facing defects that he should not be responsible for.

He may require the landlord to repair the object, to reduce the rent proportionately, pay damages and even assume responsibility for litigation against a third party (art. 259a §1 CO).

The tenant must, in writing, set the landlord a reasonable time in order to remedy the defect and may warn him that, in the event of failure to comply, on expiry of the time limit the tenant will deposit his future rent payments with an office designated by the canton (art. 259g §1 CO).

Renovations of the premises are, in principle, charged to the tenant, generally by increasing the rent of the premises. The landlord may renovate the premises provided that the renovation works can be supported by the tenant and the lease has not been terminated. In carrying out such works, the landlord must give due consideration to the tenant’s interests (art. 260 CO).

Renovation undertaken directly by the tenant may be carried out only with the written consent of the landlord. At the end of the contract, if the object has appreciated significantly in value as a result of the renovations, the tenant may claim appropriate compensation for such appreciation (art. 260a CO).

Sub-lease an appartment

 

Sub-lease an apartment can be a very practical solution and is quite common in Geneva. However, the applicable rules should be well understood before choosing this option, as sub-letting involves by definition some risks, whether for the landlord, the main-tenant or the sub-tenant.

According to art. 262 §2 CO, sub-letting is permitted only with the property owner’s consent. He/she may refuse to give his/her consent only if:

• the tenant refuses to inform him/her of the terms of the sub-lease;
• the terms and conditions of the sub-lease are unfair in comparison with those of the principal lease;
• the sub-letting gives rise to major disadvantages for the landlord.

Sub-lease an apartment is by definition an interim solution and should not, according to the Courts; result in transferring the lease of the apartment. That is why sub-leasing an apartment is excluded when it appears clearly that the main-tenant never intends to return to the apartment.

The main-tenant may charge something to the sub-tenant when the apartment is furnished but within reasonable limits. Generally, for furnished apartments, increases of rent up to 30% more that main lease contract are regarded as acceptable.

 

If the sub-leasing is not announced to the landlord, the main-tenant is exposed to the risk of an early termination of the main lease contract, with a 30 days notice for the end of a month (art. 257f §3 CO).

It should be noted that no contractual relations exist between the landlord and the sub-tenant.

The main-tenant remains responsible towards the landlord for any risks regarding the rented property, such as late payment or damages. That is why the sub-tenant should be chosen carefully by the main-tenant.

Termination of the contract

 

Is it possible to leave your appartment without respecting the notice period?

To be released, the tenant must:
• specify clearly his intention to return the object before the end of the contract;
• propose to the landlord a new tenant solvent and willing to take on the lease under the same terms and conditions (art. 264 §1 CO); otherwise, the tenant or lessee must continue to pay the rent until such time as the lease ends or may be terminated under the contract or by law (art. 264 §2 CO).

The landlord must be in possession of all relevant information about the candidate and have sufficient time to make his decision. According to practice, this period should not exceed 20 days.

The landlord remains totally free not to accept the new candidate. However, if the applicant is objectively acceptable, the tenant is released from his obligations.

 

May a notice of termination be challenged?

In practice, tenants receiving a valid notice of termination and willing to remain in their apartment have two solutions:

Challenge the notice of termination
According to art. 271 §1 CO, notice of termination may be challenged when it contravenes the principle of good faith, such as when notices are given because the tenant is asserting claims arising under the lease in good faith (art. 271a §1 let. a CO) or for the sole purpose of inducing the tenant to purchase the leased premises (art. 271a §1 let. c CO).

Request for a lease extension
According to art. 272 §1 CO, the tenant may request the extension of a fixed-term or open-ended lease where termination of the lease would cause a degree of hardship for him or his family that cannot be justified by the interests of the landlord.
Where weighing the respective interests, the competent authority has particular regard to various aspects, such as the circumstances in which the lease was contracted and the terms of the lease, the duration of the lease or any need that the landlord might have to use the premises for himself, his family members or his in-laws and the urgency of such need.
It should be noted that the extension of the lease may not be for more than four years. However, at the end of this period, the tenant may request a second extension.

How to proceed?

Tenants willing to challenge the notice of termination or obtain a lease extension must file, within 30 days from the notice of termination, a request to the conciliation authority.

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