The new tenant regulation for commercial leases explained simply: How Swiss law allows for early termination of long-term contracts.
A long-term commercial lease agreement for five or even ten years often feels like a milestone when it is signed. It symbolises stability, planning security and a commitment to a location. But in today's dynamic business world, this security can quickly turn into a financial burden. What happens if the company grows faster than planned and the current office space is bursting at the seams? Or if a strategic realignment requires a presence in another city? Suddenly, the long-term contract becomes a burden.
A well-thought-out exit strategy is essential for precisely such scenarios. An important, but often misunderstood tool for this is the subletting clause.
First, it is important to understand the foundation of Swiss tenancy law: pacta sunt servanda, contracts must be honoured. A commercial lease agreement concluded for a fixed term is binding on both parties until the expiry of this term. Ordinary termination before this date is not possible. This regulation protects the landlord from vacancy and secures his calculated rental income. For the tenant, however, it represents a considerable financial obligation, especially if the premises are no longer needed.
Premature withdrawal without legal basis would mean that the tenant would have to continue paying rent until the end of the contract, even if the office chairs have long since been moved to another building.
A well-formulated replacement tenant clause in the tenancy agreement regulates the conditions under which a tenant is released from their obligations if they present a suitable replacement tenant. The law (Art. 264 OR) provides for the right to early termination even without an explicit clause if a reasonable replacement tenant is found. However, a contractual clause creates clarity from the outset and can simplify the process considerably.
The core of any discussion about a new tenant revolves around one central question: what makes a potential successor reasonable and acceptable to the landlord? This is where the crucial details that determine success or failure lie.
A landlord is not obliged to accept every candidate you propose. However, the rejection must not be arbitrary. Over the years, case law has developed clear criteria that a new tenant must meet.
The most obvious and important criterion is solvency. The proposed new tenant must be able to pay the rent on time and for the remaining term of the contract without any doubt. In practice, this means that the landlord will carry out a thorough credit check. A current debt collection extract with no entries is the minimum requirement. Depending on the amount of rent, balance sheets, income statements or a business plan may also be required to prove the economic stability of the company. It therefore makes sense to only propose candidates who are certain to meet these criteria.
Equally important is the general acceptability of the new tenant. This term is flexible, but it follows a clear logic: The landlord must not be disadvantaged by the change of tenant. A key aspect here is the purpose of the rented premises. If someone has run a quiet architectural office, a drum rehearsal room is hardly reasonable for the landlord and the other parties in the building as a new tenant. The new use must be compatible with the character of the property and the existing tenant structure.
The image and reputation of the successor also play a role. In a prestigious building with law firms and trust companies, the landlord could refuse to allow a tattoo studio or esoteric shop to move in on the grounds that this could damage the positioning and attractiveness of the property. However, this refusal must be based on objective reasons and must not be discriminatory.
One point that often leads to misunderstandings in practice is the condition of contract takeover. The proposed new tenant must be willing and able to take over the existing lease unchanged. They assume all rights and obligations in full.
This means that lower rents and shorter terms cannot be negotiated. Any attempt at renegotiation on the part of the new tenant makes them unacceptable to the landlord, as this would constitute a new contract. The search must therefore focus on a prospective tenant for whom the current contract, with all its terms and conditions, is attractive and feasible.
If you are planning to move out, a structured approach is essential. Early communication and notice of termination are always advantageous. Then the active search for a new tenant begins. This process involves using property platforms, professional networks and placing targeted advertisements. Careful preliminary screening of candidates is essential. The necessary documents should be requested and creditworthiness checked before a candidate is officially proposed to the landlord.
The final step is for the tenant to submit a written presentation of one or more vetted, solvent and suitable candidates to the landlord. After a reasonable review period has been granted, the following applies: if the landlord rejects an objectively reasonable candidate without cause, the current tenant is released from their contractual obligations. The date on which the new tenant would have started the tenancy is decisive for the timing of the release.
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