Type of Use for Commercial Properties: Definition and Importance
What does the type of use mean for commercial properties? Learn everything about definitions, change of use applications, and legal consequences of violations in Switzerland.
The type of use of a commercial property determines what the premises may be used for – be it as an office, retail space, or storage. This legally binding stipulation is anchored in the building permit and influences not only the drafting of your lease agreement, but also tax and insurance aspects. Violations can have severe consequences, which is why you should always check whether the intended use is permissible before renting. Although a change of use application allows for modifications, it requires official permits and can be time-consuming. |
What is the type of use for commercial properties?
The type of use defines the specific purpose for which a commercial property or real estate may be legally used. This stipulation is already made as part of the building permit and is reviewed and approved by the responsible building authorities in the municipality or canton. Thus, the type of use is not an arbitrary detail, but a legally binding framework derived from various legal foundations.
In Switzerland, the determination of the type of use is based on the Spatial Planning Act (RPG) as well as the cantonal and municipal building and zoning regulations. These regulations specify which type of use is permitted in which zone. For example, there are purely residential zones, mixed zones, commercial zones, or industrial zones. A commercial property in a residential zone is subject to different restrictions than a property in an industrial zone.
The type of use is recorded in the lease agreement as well as in official documents and is binding for you as a tenant. Therefore, when looking for a property for your business, you should always verify whether the designated type of use aligns with your planned business operations. Deviating from the approved type of use without the appropriate permit can result in legal and financial consequences.
Why is the type of use so important?
The type of use has far-reaching effects on various aspects of your tenancy and your business operations. It not only influences the legal permissibility of your activity but also tax, insurance, and tenancy law matters.
Firstly, the type of use determines whether your planned business activity may even be carried out in the rented premises. For example: You want to open a bakery with a retail area, but the property is exclusively approved for office use. In this case, you cannot simply use the rooms for your project. Such restrictions serve the purpose of orderly spatial development and are intended to ensure that different uses do not lead to conflicts – for instance, due to noise, traffic volume, or emissions.
Secondly, the type of use has a direct impact on the amount of rent and ancillary costs. Commercial properties with different types of use often have different cost factors – such as higher insurance premiums for manufacturing companies or increased heating and energy costs for retail spaces with longer opening hours.
Thirdly, the type of use plays a central role in tax matters. The taxation of business premises can vary depending on the type of use, and potential depreciations or investment deductions also depend on how the property is used.
Overview of the different types of use
In Switzerland, commercial properties are usually divided into various types of use. These categories are based on the actual utilization of the premises and are indicated accordingly in the building permits.
Office use
This type of use includes all activities typically carried out in an office – from administrative work and consulting services to IT and service companies. Office spaces are frequently located in mixed zones and are characterized by low noise pollution and moderate public traffic.
Retail spaces and shops
Retail spaces are intended for the direct sale of goods to end customers. This includes retail stores, boutiques, supermarkets, or specialty shops. This type of use is often tied to specific locations, such as shopping streets or neighborhood centers, and comes with higher demands for accessibility and visibility.
Gastronomy and hospitality
Restaurants, cafes, bars, and hotels are subject to special requirements regarding noise protection, hygiene regulations, and operating hours. This type of use often requires additional permits – such as a liquor license or operating permits from cantonal authorities.
Production and commercial
Manufacturing companies, workshops, carpentries, or printing shops fall into this category. Such uses are usually located in commercial zones, as they can be associated with noise, emissions, or increased delivery traffic. The structural requirements are often higher here, for instance regarding statics, fire protection, or ventilation.
Storage and logistics spaces
This type of use covers purely storage spaces with no or minimal public traffic. Such properties are frequently located in industrial zones and are designed to meet logistical requirements such as loading docks, large doors, or floor load capacity.
Coworking and mixed use
Coworking spaces and flexible office concepts have gained importance in recent years. These spaces can combine different forms of use – from classic office work to creative activities or smaller events. The legal classification can be complex here and requires a careful examination of the building permit.
Change of use: If you want to change the type of use
It can happen that the existing type of use of a property does not align with your planned business operations. In such cases, a change of use is required – i.e., modifying the approved type of use. This process requires official approvals and should under no circumstances be carried out independently.
For a change of use, you must submit a corresponding application to the responsible building authority of your municipality or canton. The authorities will then review whether the planned use is compatible with the applicable building and zoning regulations as well as the overarching spatial planning law. Various factors play a role here: the location of the property, the zoning affiliation, potential impacts on the neighborhood (noise, traffic, emissions), and building law requirements.
A change of use application can take several weeks to months. During this time, additional conditions such as structural adjustments, noise protection measures, or increased parking requirements may be demanded. It is also possible that neighbors can raise objections within the framework of a public display procedure.
As a tenant, you should always coordinate a change of use with the landlord. Usually, they must submit the application or at least consent to it. Additionally, the change of use can incur extra costs for structural measures or higher insurance premiums, which need to be contractually regulated. It is advisable to document such agreements in writing in the lease.
Legal consequences in case of violation of the type of use
The disregard of the approved type of use can result in serious legal and financial consequences. These range from tenancy law repercussions to building law sanctions.
From a tenancy law perspective, an unapproved change of use constitutes a breach of the lease agreement. According to Art. 257f Para. 3 of the Swiss Code of Obligations (CO), the tenant is obliged to use the object with care. An unapproved use can be considered as careless use. In severe cases, the landlord can issue an immediate termination (Art. 257f Para. 4 CO) or claim for damages, for instance, if the inadmissible use has caused damage to the property.
Furthermore, the building authorities can take action against you. In the event of violations against the building permit or zoning regulations, the following measures may be taken:
- Prohibition of use or suspension of operations
- Fines and administrative fines
- Restoration orders that demand structural dismantling
- Criminal consequences in case of severe violations
An unapproved use can also be problematic from an insurance standpoint. Insurance companies may refuse payouts if damage occurs in premises that are not being used in accordance with their building permit. This can lead to substantial financial losses, especially with liability or business interruption insurance.
Additionally, tax consequences can arise. In the case of unapproved use, the tax authorities can question the tax deductibility of business expenses or assert additional claims.
Conclusion: The type of use as the basis of your property choice
The type of use is a central element when renting commercial properties in Switzerland. It not only defines what you are legally allowed to do on the premises, but also influences the tenancy, tax, and insurance aspects of your business operations. Therefore, before signing a lease, you should absolutely check whether the designated type of use matches your planned project.
If a change of use is necessary, plan sufficient time for the official approval process and clarify the cost issue with the landlord early on. Careful preparation saves you later legal disputes and financial risks.
For complex questions regarding the type of use, change of use procedures, or in case of uncertainties about the legal permissibility of your business operations, it is advisable to seek professional advice early on – be it from specialized real estate consultants, architects, or lawyers focusing on tenancy and building law. This ensures that your business operations rest on a solid legal foundation.
Note: This article serves for general information purposes and does not constitute legal advice. For specific legal questions regarding the type of use, change of use procedures, or violations, you should consult a specialist lawyer or the responsible authorities.