Withdrawal from a rental agreement Withdrawal from a rental agreement in Switzerland: everything you need to know about preliminary agreements, defects and deception. For offices and commercial properties.
A signed lease agreement for office or commercial space is generally binding in Switzerland. But what happens if circumstances change and one party – whether the tenant or the landlord – wants to withdraw from the agreement before the lease begins or shortly thereafter? Withdrawing from a lease agreement is a complex issue that often involves uncertainty. This article highlights the various aspects of withdrawal, including the situation with a preliminary rental agreement and the general options for terminating a rental agreement that has already been signed.
In the dynamic business world, unforeseen events can mean that a rental agreement that has just been concluded suddenly no longer meets the requirements for the planned expansion, new office or relocation of the business. Perhaps a round of financing has been delayed, an important order has been cancelled or a more suitable property has been found at short notice. In such moments, the question of withdrawal inevitably arises.
It is important to distinguish between withdrawal and termination of a rental agreement. Withdrawal aims to cancel the contract from the outset or prevent it from taking effect, often before the rented property has even been occupied or immediately upon handover due to serious defects. Termination, on the other hand, ends an existing tenancy for the future, either with due notice and in compliance with deadlines or extraordinarily for important reasons during the current tenancy period. The scenarios of withdrawal discussed here are borderline cases and often have similar consequences to immediate termination of the contract.
Before a detailed rental agreement is drawn up and signed, the parties sometimes conclude a preliminary rental agreement. A preliminary agreement is particularly common for larger office and commercial premises. This sets out the key points of the future tenancy, such as the rental property, the rent and the approximate start date. But how binding is such an agreement and is it possible to withdraw from the preliminary agreement without further ado?
In principle, a preliminary tenancy agreement is also considered a contract under Swiss contract law (OR) and has a certain binding effect. It aims to oblige the parties to conclude the main rental agreement. Complete and unfounded withdrawal is therefore not automatically possible if the preliminary agreement is formally valid (usually in writing, if required for the main agreement or desired by the parties) and sufficiently specific in terms of content.
However, there are also scenarios that may justify withdrawal. If certain conditions for the conclusion of the main contract were specified in the preliminary rental agreement (e.g. the granting of a building permit for specific alterations by the tenant) and these conditions are not met, a right of withdrawal may arise. Withdrawal may also be possible if one party has been fraudulently misled or if there is a fundamental error.
The consequences of an unjustified withdrawal from a preliminary rental agreement may result in claims for damages, depending on the agreement. This may include, for example, the costs incurred by the other party as a result of relying on the conclusion of the main agreement (e.g. advertising costs for a new search, planning costs). It is therefore advisable to define clear rules for possible withdrawal and its consequences when drafting a preliminary rental agreement. If such rules are not included and the preliminary agreement is binding, one party may even be able to sue for the conclusion of the main contract. In practice, however, the focus is more often on compensation.
Once the actual rental agreement has been signed by both parties – the tenant and the landlord – the situation becomes more complex. Swiss tenancy law does not provide for a general statutory right of withdrawal for rental agreements, as is the case with doorstep sales, for example. By signing the agreement, both parties confirm their intention to enter into the tenancy at the agreed terms and conditions. Unilateral withdrawal from the rental agreement by the tenant or landlord is therefore only possible under certain conditions.
The simplest option, but one that depends on the goodwill of the other party, is the mutual termination of the rental agreement. If the tenant and landlord agree that the tenancy should not go ahead after all, they can terminate the agreement by mutual consent. It is strongly recommended that such a termination agreement be set out in writing and that all relevant points be regulated, such as any compensation or the assumption of costs already incurred.
Another option provided by law for the tenant to be released from their obligations prematurely is to find a reasonable replacement tenant (Art. 264 OR). The replacement tenant must not only be willing to take over the rental agreement on exactly the same terms (rent, term of the agreement, etc.), but must also be objectively acceptable to the landlord. This means in particular that the replacement tenant must be solvent and there must be no justified concerns regarding the contractual use of the rental property. The landlord has a reasonable period of time to review the proposed replacement tenant. If the landlord rejects an objectively reasonable replacement tenant without good reason or does not respond within a reasonable period of time, the original tenant is released from their obligations. If the tenant cannot find a replacement tenant or cannot find a reasonable replacement tenant, they remain obliged to pay the rent until the next possible ordinary termination date, less any savings the landlord makes or fails to make by using the premises for other purposes.
Specific provisions may also arise from the rental agreement itself, for example if contractual rights of withdrawal have been agreed for certain scenarios, although this is rarely the case in practice.
In addition to mutual agreement and the provision of a replacement tenant, there are special circumstances that may justify withdrawal. These are often linked to narrowly defined conditions. An important reason for withdrawal may be the existence of serious defects in the rented property at the start of the tenancy. If the suitability of the office or commercial space for the intended use is significantly impaired or even eliminated (e.g. massive water damage, lack of heating in winter, serious safety defects), and if the landlord has not remedied these defects despite being requested to do so and being given a deadline, the tenant may, under certain circumstances, withdraw from the contract in accordance with the rules on default or non-performance or give notice of termination without notice (Art. 258 para. 2 OR in conjunction with Art. 107/109 OR or Art. 259b lit. a OR). It is important to document the defects precisely and to follow the correct legal steps (notification of defects, setting a deadline for rectification). A minor defect does not usually justify withdrawal, but gives the tenant other rights such as rectification of defects, a rent reduction or compensation.
Even fraudulent misrepresentation by the landlord regarding essential characteristics of the rental property may entitle the tenant to contest the contract and thus to withdraw from it (Art. 28 OR). Deception is deemed to have occurred if the landlord intentionally provides false information or conceals important facts that influenced the tenant's decision to conclude the contract (e.g. concealing an upcoming major construction site directly in front of the office windows, which would significantly restrict its use).
The tenant must be able to prove the deception and its causality for the conclusion of the contract and contest the contract within one year of discovering the deception.
Less common, but conceivable, are cases of material error (Art. 23 ff. OR). A fundamental error entitling the tenant to contest the contract exists if the tenant was mistaken about a fact which, in good faith, he could have regarded as a necessary basis for the contract in business dealings.
For the landlord, the possibilities for unilateral withdrawal after signing the contract are also very limited and are usually restricted to serious breaches of contract by the tenant prior to the start of the tenancy (e.g. if it becomes clear before handover that the tenant is insolvent and cannot pay the first rent and deposit) or to specific, contractually agreed grounds for withdrawal.
Withdrawing from a rental agreement for office and commercial space in Switzerland is not a decision to be taken lightly. Once signed, a contract must generally be honoured (‘pacta sunt servanda’). The possibilities for withdrawal are clearly defined by law and contract and usually require special circumstances.
In the case of a preliminary rental agreement, the binding nature and any withdrawal conditions should be carefully examined and, ideally, set out in writing. After conclusion of the main lease agreement, withdrawal is most likely to be achieved through mutual agreement with the other party or by finding a reasonable replacement tenant. Special reasons such as serious defects in the rental property upon handover or fraudulent misrepresentation may also justify withdrawal, but require careful documentation and compliance with legal requirements.
In view of the potential financial consequences of an unjustified withdrawal or a disputed termination of the contract, it is advisable for tenants and landlords of office and commercial space to seek legal advice at an early stage. Clear communication and the search for fair solutions can often help to avoid lengthy and costly disputes. Careful review of the lease agreement before signing and awareness of one's own rights and obligations form the best basis for a successful tenancy.
© 2025 maison (Schweiz) GmbH